Health insurance is an essential tool for protecting your financial well-being in the face of unexpected medical expenses. While one comprehensive health insurance plan may suffice for many individuals and families, having multiple health insurance plans can provide additional coverage and financial protection. In certain situations, it can help reduce out-of-pocket expenses and offer more extensive protection for specific medical needs.
In this article, we will explore the benefits of having multiple health insurance plans, including the added security, flexibility, and coverage it can bring.
What Are Multiple Health Insurance Plans?
Having multiple health insurance plans means being covered by more than one insurance policy, either from different insurers or a combination of a group insurance plan and an individual policy. This could be achieved through:
- Individual Health Insurance: A person purchases their own private health insurance plan.
- Group Health Insurance: Provided by an employer or a professional organization.
- Family Floater Plan: A single policy that covers the entire family, often with higher sum insured limits.
- Top-Up or Super Top-Up Plans: Additional coverage taken on top of an existing policy.
- Critical Illness Riders: These are specialized policies that provide financial protection in case of major health crises like cancer, heart attack, or stroke.
Having multiple plans doesn’t necessarily mean buying several policies for the same purpose, but rather using different plans to cover different health needs or enhance existing coverage.
1. Increased Coverage and Higher Sum Insured
One of the primary reasons people opt for multiple health insurance plans is to increase the total coverage and sum insured.
- Higher Coverage: While a single policy may have a limited sum insured, multiple policies can combine to provide a much higher coverage. This can be especially beneficial in the event of critical illnesses or long-term treatments, which can become extremely expensive.
- More Comprehensive Coverage: A top-up policy, for example, can add additional coverage to your existing plan, covering medical expenses above your primary policy’s limit.
Example: Let’s say you have a health insurance plan with a sum insured of ₹5 Lakhs. If you purchase a top-up plan with a ₹10 Lakh sum insured, your total coverage becomes ₹15 Lakhs. This means that even if your medical expenses exceed your original sum insured, the top-up plan will kick in, minimizing the financial strain.
2. Reduces Financial Burden on a Single Plan
By having multiple health insurance policies, the financial burden of a medical crisis can be spread across different plans. Each policy may cover different aspects of healthcare, from routine treatments to emergency services, hospitalization, pre and post-hospitalization, and critical illnesses.
If one plan covers hospitalization costs, another can cover specialized treatments, reducing the chances of exhausting the entire coverage in one go.
3. Access to a Wider Network of Hospitals
Different insurance companies have their own networks of partner hospitals. If you have more than one insurance plan, you have access to a larger number of hospitals, both for cashless treatments and for emergency care. This is particularly beneficial if you live in a city with a limited number of hospitals under your insurer’s network, or if you’re traveling.
Example: If one plan offers a strong network in your home city, but another plan has a good presence in another city where you might travel for work or vacation, having both can save you the hassle of searching for hospitals that are covered under your existing policy.
4. Reduces Waiting Period for Pre-Existing Diseases
Most health insurance plans impose a waiting period of 2 to 4 years for coverage of pre-existing conditions. If you are managing a pre-existing health condition, having multiple plans can help mitigate the waiting period.
- If you have one plan that doesn’t cover pre-existing conditions yet, but another plan does (or covers them after a shorter waiting period), you can use both to get partial coverage for your condition.
- Similarly, some insurers may have lower waiting periods for conditions like diabetes or hypertension, whereas others may take longer. With multiple plans, you can maximize the benefits by tapping into the plan with the shortest waiting period for your specific health condition.
5. Additional Benefits and Riders
Health insurance policies often come with optional riders or add-ons that can be customized to suit your needs. By holding multiple plans, you can access different riders, such as:
- Critical illness rider: Provides a lump sum payment in case of a diagnosis of life-threatening illnesses like cancer, heart attack, etc.
- Maternity benefits rider: Covers delivery and related expenses.
- Personal accident rider: Covers injuries or disabilities caused due to accidents.
- Hospital cash rider: Provides daily allowances during hospitalization.
By holding multiple policies, you can choose the best add-ons across plans and tailor your coverage according to your needs.
6. Better Claims Settlement
If your primary health insurance plan has limited hospitalization or treatment coverage, the secondary plan can come to the rescue, offering additional assistance and a smoother claims process. If one insurer offers a poor experience with claims settlement, the other insurer may have a more efficient process, ensuring you don’t have to deal with delays or denials.
Having multiple health plans can also minimize claim exhaustion in case of large medical bills, allowing you to split the costs and get reimbursements from different sources.
7. Health Insurance Tax Benefits
Health insurance premiums are eligible for tax deductions under Section 80D of the Income Tax Act in India. If you have multiple health insurance plans, you can avail tax benefits on all of them, subject to the maximum limit defined by the law.
- For example, the tax benefit for premiums paid for your own health insurance plan is up to ₹25,000 for individuals below 60 years of age, and up to ₹50,000 for senior citizens. If you are paying premiums for multiple plans, you can claim deductions on the premiums paid for each policy.
8. Reduces Risk of Exhausting Policy Limits
Healthcare costs, especially in case of serious illnesses or accidents, can quickly exceed your policy’s sum insured. With multiple policies, you reduce the risk of exhausting the coverage of your primary health insurance policy.
This ensures that if you incur high medical expenses, the additional policy (whether it’s a top-up plan or critical illness policy) can provide the needed coverage.
9. More Flexibility in Plan Options
With more than one health insurance plan, you can pick and choose plans that cater to different aspects of your health needs. For example:
- One plan could offer extensive hospitalization coverage, while another could be more suited for critical illness or wellness services.
- You may want a family floater plan for routine medical needs and a dedicated policy for senior citizens to cover older parents with additional features like ambulance services or post-hospitalization care.
This level of customization and flexibility ensures you get the right amount of protection for each aspect of your healthcare needs.
10. Avoid Gaps in Coverage
By having multiple health insurance policies, you reduce the chances of gaps in coverage. If your primary plan has exclusions for certain treatments, conditions, or hospitals, your secondary insurance can fill those gaps. Similarly, if you need specialized care or have an unusual medical requirement, having multiple plans can ensure fuller protection.
Things to Keep in Mind
While there are clear advantages to having multiple health insurance plans, there are some things to keep in mind:
- Premium Costs: Multiple policies mean you’ll pay more in premiums. Consider whether the benefits outweigh the extra cost.
- Coordination of Claims: Managing multiple claims can be complicated, especially if you have to file with multiple insurers. You’ll need to coordinate with each insurer to ensure the claims process goes smoothly.
- Overlapping Coverage: Make sure the policies complement each other. Overlapping coverage may not offer additional benefits and could be an unnecessary expense.
- Maximum Claim Limit: Understand the claim limits of each plan, as you’ll need to adhere to the individual caps of each policy.
Conclusion
Having multiple health insurance plans offers enhanced protection, flexibility, and security, especially in a world where healthcare costs are rising and medical emergencies can happen at any time. It provides a way to maximize coverage, reduce out-of-pocket expenses, and minimize financial risks from medical crises.
However, it’s essential to carefully consider the type of policies you hold, their premiums, and their specific benefits to ensure that the combination of plans actually meets your healthcare needs and adds value. Always review your options and consult with an insurance expert if necessary before deciding to take out additional policies.
