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Don't buy a health plan for maternity cover

It comes with long waiting period, cap on charges and does not cover pre- and post-hospitalisation expenses

Tinesh Bhasin 

When buying a health insurance cover from his bank, Antriksh Hooda, 30, was told about a family floater plan that also has a maternity cover. That was tempting to Antriksh, married for two years and planning for a child. However, the executive informed him, the maternity benefit would be only available from the fourth year on. Antriksh opted for a plan without a maternity benefit, also comparatively cheaper.

Nikhil Apte, a chief product officer at Royal Sundaram Alliance Insurance, explains that if companies don't insist on a waiting period, there is a chance of misuse. In Mumbai, a caesarean procedure can cost upwards of Rs 50,000 and go as high as Rs 1.5 lakh. The annual premium for a family floater of a healthy couple below 35 years of age is around Rs 10,000. If there are no restrictions, the insured can claim maternity charges in the first two to three years and then discontinue the policy.

Insurance companies say they have started introducing a maternity benefit because the average age for maternity is rising in metropolitan cities. Some years earlier, the average age was 26-27 years; it is now 30-31. The later a woman conceives, the more the chances of a complication in pregnancy. Companies, therefore, target a working couple focused on their jobs and planning to have a child later.

S Prakash, executive director, Star Health and Allied, says maternity benefit plans are also introduced because of high demand from customers. Many people are not comfortable with the idea of paying for insurance without getting back anything tangible. Maternity plans help to sell the policy to a customer who might otherwise remain uninsured.

Waiting period, cost

After a person takes the policy, the coverage for maternity does not start instantly. The minimum waiting period for such plans is two years and the maximum is four.

Health insurance with maternity benefit is always more expensive than those without. Insurers look at maternity cover as a high risk product, as the claim ratio is high and can even be 100 per cent, unlike other insurance products.

Most insurers bundle it with premium policies. To sweeten the deal, they offer features such as no restriction on room rent, cover for outpatient department consultation, payment for dental procedures, and so on. Royal Sundaram Lifeline Elite, which offers maternity benefits, has a minimum sum insured of Rs 25 lakh. It offers coverage for 11 critical illnesses in international hospitals.

HDFC ERGO offers it as an add-on. Mukesh Kumar, its executive director, says customers beyond 40 do not care about a maternity benefit. Customers can opt for it depending on the health plan they choose by paying slightly more.

A general insurance company that offers only health-related products offers a policy with maternity cover for Rs 26,804 for a 30-year-old who has a 26-year-old wife. This plan has a waiting period of two years, offers cover for the new-born from day one and also takes care of the pre- and post-pregnancy costs. Most of these expenses are capped at Rs 50,000. It sells a basic health insurance for the same couple for Rs 5,800.

Restrictions, exclusions


The exclusions and restrictions are designed depending on the sum insured. Insurers, however, do not usually cover pre and post-hospitalisation charges. This means all visits to gynaecologists, ultrasound procedures, and other illnesses due to pregnancy cannot be claimed. None of the plans cover voluntary abortion or in-vitro fertilisation procedures. Very few insurers cover pregnancy termination, due to complications.

Policies with maternity benefit also have caps on expenses. For example, HDFC ERGO pays a maximum of Rs 40,000 for a caesarean procedure. In its premium policy that has a Rs 25 lakh sum insured, Royal Sundaram offers a cap of Rs 2-2.5 lakh. Star Health has a cap depending on the city. Prakash of Star Health says as the cost of the procedure depends on the city, the company has restricted it accordingly. For example, in Mumbai and Delhi, the payout is a maximum of Rs 65,000; it falls to Rs 45,000 in Chennai.

Should you buy?

If choosing a health insurance plan only for a maternity benefit, it is not viable, as you will continue to pay a higher premium as long as you stick to the insurer. There are also chances that your entire treatment cost won't be covered, due to the cap on charges. In metros, hospitalisation charges for a woman who had a caesarean procedure can be upward of Rs 1 lakh. It makes sense only if you want to opt for the policy due to other benefits offered such as dental procedures, no sub-limit for rooms, and so on.

There are also chances that employers might offer the maternity benefit in their group insurance. The waiting period in group plans is usually restricted to nine months. It could also come with sub-limits for the hospitalisation. Shreeraj Deshpande, head, health insurance, Future Generali India, says companies in certain sectors, such as information technology, even offer pre- and post-maternity charges, visits to gynaecologist and diagnostics. "The risk in a group plan gets distributed and, therefore, insurers can give more facilities," he says.


COVERAGE
  • Hospitalisation charges but with a cap
  • Applicable after a waiting period of two to four years
  • Premia are higher than basic policies
EXCLUSIONS
  • Caesarean section procedure
  • Pre- and post-hospitalisation charges
  • Pregnancy termination
  • Actual charges incurred as there's a sub-limit
  • In vitro fertilisation procedures

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First Published: Sun, August 30 2015. 22:24 IST
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