Why Maternity Insurance is Important before Planning to Start a Family

November 3, 2021 Mutual Fund

Parenthood is one of the most important chapters of many people’s lives. Bringing a child into the world brings with it both joy and responsibilities. With so many things to prepare for while taking care of yourself during pregnancy, the one thing that you must definitely not worry about is the cost of medical support during pregnancy and childbirth. In this article, we are going to explain how you can prepare for that.

Your budget must account for maternity-related expenses from the initial phase of pregnancy. With the skyrocketing medical cost across the world, the expenses of a normal delivery in a decent private hospital in India can range anywhere from Rs 40,000 to Rs 2,00,000, depending upon your location and the facilities offered by the hospital. Moreover, C-section deliveries can cost up to Rs 3,00,000. Savings and investments are two ways you can financially build a nest egg for maternity and after. However, without Maternity Insurance, medical expenses can up a dent in your finances.

What is Maternity Insurance?

Maternity Insurance is a type of health insurance that provides financial coverage during pregnancy and childbirth up to the sum insured under the policy term. It typically includes medical expenses listed below:

• Pre and post hospitalisation expenses

• Pre and post natal expenses

• Delivery expenses (normal as well as C-section)

• Ambulance charges

• Hospitalisation charges (including room rent)

• Cover to the newborn baby for up to 90 days

• Medically required pregnancy termination

• Infertility expenses

• Pregnancy complications

• Doctor and anaesthetic consultation

Here are a few things you must know about Maternity Insurance:

• Many insurers offer maternity benefits as an add-on with their standard health insurance policy, which is a quite easy and affordable way to get maternity cover.

• In case you could not buy it well in advance, you can buy a separate maternity insurance plan, which will be slightly expensive than buying a standard policy with add-on cover. However, you need to do proper research before buying exclusive maternity policies as not many insurers offer them in India.

• Maternity Insurance without a waiting period is not easily available in India. It usually has 1 year to 4 years of a waiting period, depending upon the plan.

• Generally, 30 days pre-hospitalisation and 60 days post-hospitalisation expenses are covered under the policy.

• The list of inclusions and the list of exclusions play an important role in a maternity insurance plan as they can largely vary from insurer to insurer. Therefore, it is advisable to carefully check these lists before buying the policy.

• The maternity coverage is not unlimited under the plan. For the premium you pay, you can claim up to the sum insured that you had chosen at the time of purchasing/renewing the policy.

• Most maternity insurers in India cover up to only two childbirths.

Why is it important to have maternity coverage before planning to start a family?

Here are some of the reasons why everyone should have maternity insurance coverage before planning to start a family in India:

1. The cost of delivery is very high:

Nowadays, everyone wants the best for their child, right from the child’s birth. As we already discussed, the cost of a caesarean/C-Section as well as normal/natural delivery in a decent private hospital is very high. The total expenses can range anywhere from Rs 50,000 to Rs 3,00,000, depending on the type of delivery, facilities provided by the hospital, and your location. Having maternity insurance gives you financial relief and you can enter into parenthood without unnecessary financial stress.

2. It provides maximum coverage:

Pregnancy and childbirth themselves can be very stressful and in many cases, there are some extreme pregnancy complications that can lead to a miscarriage or medically required pregnancy termination. In some cases, the mother’s life can be in a danger. The cost of the treatments in such cases can be exorbitant. The maternity insurance policy extends its coverage to almost all pregnancy and childbirth-related expenses. Moreover, it also provides cover to a newborn baby for up to 90 days from birth.

3. Extends its coverage to the newborn:

Premature birth is not a rare condition. The babies that are born prematurely need to be placed in the incubators at the hospital’s Neonatal Intensive Care Unit (NICU) for a certain period of time. The average cost of NICU for babies that weigh less than 1000 grams is Rs 1,68,000. But, fortunately, a maternity insurance plan covers the new-born baby from day one to up to 90 days. All the expenses arising out of any complications with new-born babies are covered by the insurer. Moreover, some policies also cover the vaccination costs for the babies until the end of the policy.

4. Cashless hospitalisation:

Most maternity insurances come with a cashless hospitalisation benefit. A cashless hospitalisation feature lets you pay only the deductible amount (if any) and the insurer pays the bills directly to the hospital. So, you do not have to worry about paying the hospital bills through cash or credit and then wait for the claim settlement. To take the advantage of this facility, you must visit the network hospital of the insurer and provide the hospital with your cashless insurance card or the original insurance policy.

5. No claim bonus:

If you do not file a claim during the policy year, the insurer rewards you with a ‘no-claim bonus’. The no claim bonus can be rewarded in a form of a discount in the next policy premium or a 10% increased sum insured for the next policy year. These bonuses can be accumulated over the years and even transferred to the new insurer if and when you want to change your current insurer.

6. Tax benefits:

Like any normal health insurance, you can avail of tax benefits against the premiums paid of maternity insurance under section 80D of the Income Tax Act, 1961.

7. Flexible policy terms:

You can choose any amount of a sum insured as per your requirements, within the policy terms. Your premium largely depends upon the sum insured you have chosen. Moreover, if you think you might require additional coverage, you can top up the existing plan at any time. Furthermore, if you are not satisfied with the insurer, you can change your insurer, without losing the accumulated no-claim bonus and serving the waiting period for the pre-existing diseases.

To Conclude:

Buying a maternity insurance policy is advisable for all couples who are family planning or intend to extend their families within the next few years. Since most insurers have listed maternity under the pre-existing disease category, it becomes mandatory to serve the waiting period until you take the benefit of the insurance. The premiums can significantly vary from insurer to insurer. Hence, it is essential to do a comparison of various plans and choose the right plan. Also, make sure you thoroughly read the policy document and ensure the benefits you are looking for are included in the list of inclusions.

This article first appeared on PersonalFN here