Mediclaim policies are a great way of insuring against unexpected hospitalization due to illness or accidents. The health insurance policies offer to cover hospital expenses anywhere in India but you may see your eligibility varying from place to place. You may be frustrated with the insurance company's refusal to pay up the full amount you are entitled to.
This anomaly results from the fact that the premium you pay is determined on the basis of the area you live in. This would reflect in the refunds too.
Healthcare expenses in metro cities would be higher than in smaller cities or towns, prompting most of the insurance companies to divide India into three or four regional zones for the purpose of issuing mediclaim policies. Though each company has its own demarcation, the broad division is into four zones.
Mumbai is usually zone 1. The other big cities such as Delhi, Kolkata, Bengaluru and Hyderabad comprise zone 2. The rest of the country makes up zone 3, though some companies bundle Bihar, Odisha and the northeastern states into an additional zone.
Premium payable on medical policies are determined on the insured person's present health conditions and age. The premiums also vary depending on the location of the insured. Hospitals bills in big cities, including the room rent, would be significantly higher than hills in small towns. Insurance companies have to pay only modest amounts on claims from small cities and towns.
The policy premium in small cities and towns stay low partly because residents of these areas are supposed to be less vulnerable to lifestyle diseases than their counterparts in fast-paced and polluted metros.
Two persons of the same age and health conditions would be required to pay different premiums on the same sum assured if they happen to live in different zones. Residents of zone 1 would be paying much more than those from zone 2. Zone 3 would be paying even less.
Most of the companies, including New India Assurance Company, ACI General Insurance and Star Health Insurance have different premium rates for different companies. As a customer, it is in your interest to have an idea about the differences in zones before you buy a policy.
When an insurance holder from a lower zone seeks medical care in a pricier zone, his bills are expected to be higher. They will have to bear a share of the medical bill. A company would only pay 90 per cent of the claim for a customer from zone 2 who had sought medical treatment in zone 1. The cover would reduce to 80 percent if the customer is from zone 3.
Read up on the company's policies on zone differences and its effect on claim realization before buying a policy.
You can change your mediclaim policy when you shift from a zone to another. If you are moving from zone 3 to zone 2 or from zone 2 to zone 1, you can top up the policy to ensure full cover. Similarly, you can ask for a refund of the excess amount when you shift from zone 1 to zone 2 or from zone 2 to zone
Does it matter?
If you live in a cheaper zone and has no reason to think that you would require hospitalization in a big city, you can stick to a policy with a lower premium. In case the disease is severe enough to warrant treatment in specialized hospitals in big cities, you might have to cough up a share of the bill.
If you are shifting to a big city to a small town, consider your options before tweaking the policy. If you think you would be still going to a bigger city for medical treatment, it is better to leave the policy as it is.