Health Insurance plans come in many variants. The extent of coverage across two health insurances can vary on many parameters. One plan will have cap on room rent while the other covers alternative treatments. One offers lower waiting period while the other covers domiciliary hospitalization. In fact that’s what makes the comparison of features and premium of health insurance plans so difficult.
One of such parameters is the maternity benefit, where the insurance company covers the expenses incurred during delivery of child. This is not a common feature but some policies offering comprehensive coverage offer this benefit.
Health Insurance plans with maternity benefit are quite expensive. In this post, I will discuss the maternity benefit in detail, what makes such plans so expensive and whether you should purchase health plans with maternity benefit.
What is Maternity Benefit?
If your health insurance plan provides Maternity benefit, any expenses incurred during the delivery of your child will be covered under the plan. Both normal and cesarean deliveries are covered.
Under most plans though, the extent of coverage is limited (capped).
For instance, under Max Bupa Heart Beat Gold policy, if you have a family floater with Sum Insured of Rs 5 lacs, the maternity expenses will be covered only to the extent of Rs 40,000 per policy year.
Why are Health Insurance Plans with Maternity Benefit expensive?
If you research health insurance plans, you will find that the plans with maternity benefits are quite expensive (as compared to those without maternity benefits). To find out more, refer to an old post on my website comparing health insurance
Additional Read: Health Insurance Plans: A Comparison
You will realize that the plans with maternity benefits are quite expensive.
But what makes the plans with maternity benefits so expensive?
What makes Health Insurance Plans with Maternity Benefit expensive?
Typically, the occurrence of the insured event affects the insured adversely. For instance, under life insurance, the policy holder has to die before the insurance company pays the nominee. Under motor insurance, your car or vehicle has to get damaged before you file for claim. Similarly, even under health insurance, you must get hospitalized before the insurance company makes the claim. All the aforesaid events affect you adversely.
This ensures that the policy holders do not want the insured event to happen. This, in a way, keeps a check on payouts from insurance companies.
The same cannot be said for Maternity Benefit. You (and your spouse) are not affected adversely by maternity benefit (having a baby). In fact, you will be rejoiced at having a baby.
From the perspective of insurance company, this is one hospitalization expense that they will have to foot for sure. And to account for this almost certain expense, insurance companies hike the premium for plans with maternity benefits.
How expensive are the plans with Maternity benefits?
For the purpose of comparison, I will pick up plans (one with maternity benefits and one without maternity benefits) from the insurance companies. The health insurance plans (and respective premium) cannot be compared so easily. There are so many parameters (waiting period, room rent sub-limits, treatment sub-limits etc) that can be used to compare health plans. However, you will get some idea about the difference in premium.
I have considered the premium for a couple (both 30 years old) residing in Mumbai.
I have relied on information from PolicyBazaar and policy wordings from some of these insurance plans. PolicyBazaar is an excellent site for insurance product comparison. You can visit the website for your health insurance research.
As mentioned above, the entire difference in premium cannot be attributed to only maternity benefit. You can expect the plans with maternity plans to be expensive by up to Rs 5,000-7,000 per year.
A point to note is the waiting period associated with maternity benefit. If the excess premium is Rs 6,000 and the waiting period is 3 years, you would have to pay excess premium of Rs 18,000 at least before you avail the benefit. Add Rs 6,000 more since you will have to pay excess premium in the fourth year to avail the benefit. Compare this with the cap on maternity expenses. In two of the three plans discussed above, the benefit for normal delivery is only Rs 15,000 (amount is higher for Caesarean delivery). If the mother happens to have normal delivery, you would have paid Rs 24,000 for a benefit that is capped at Rs 15,000.
Please note I have discussed the best case scenario. Think of a case when you make a claim for maternity expenses after 6 years. You would have paid Rs 36,000 of extra premium for cover of Rs 15,000.
Conditions to be met to avail Maternity Benefit
- A few plans require the mother to be covered under the plan for a continuous period of 2/3/4 years before she can avail maternity benefit. You can consider this as Waiting period for Maternity Benefit.
- Under some plans, the benefit is available only under Family Floater policies. A few plans require the couple (both mother and father) to be covered under the plan for a period of 2/3/4 years before they can avail maternity benefit.
- You can claim this benefit for only a limited number of deliveries (typically 2).
- Maternity benefit has sublimit i.e. you cannot claim maternity benefit for the entire Sum Insured. For instance, if you and your spouse are covered under Max Bupa HeartBeat Gold plan for Rs 5 lacs, maternity benefit will be limited to Rs 40,000 (after 2 years of continuous coverage) and not entire Rs 5 lacs.
Those who should never purchase health insurance with maternity benefit
- Senior Citizens, elderly or those who do not plan to have children in the near future
- If the cost of child delivery in your city is not high, it may not make sense to pay additional premium for maternity benefit. As mentioned before, a waiting period of 3 years and excess premium of Rs 6,000 per year makes it extra premium of Rs 24,000. Two of the three plans discussed above provide only Rs 15,000 for normal delivery.
- If you are single and do not plan to marry in the near future, do not purchase a plan with maternity benefit.
Points to Note
- Health Insurance plans from employers (employer group health plans) typically cover delivery expenses (maternity benefits). In fact, under those employer plans, the expense may not even be capped. Hence, you can utilize the entire Sum Insured for medical expenses related to child’s delivery.
- You can bank on employer group health plan for hospitalization expenses related to maternity. And purchase a personal health plan without maternity benefits. Talk to your company HR for more details about the employer health plan.
Who can consider Health Insurance Plans with Maternity Benefits?
If you are self-employed (or your employer health plan does not cover maternity expenses) and are planning to start a family soon, you can consider these plans. Do ensure that the difference in premium between maternity and non-maternity plans is not too high and the waiting period (for maternity benefit) is not too long.
Consider the cost of delivery in your city (or your hospital of preference) too. If it is on the higher side, you will be able to utilize the entire cover amount (if you have a plan with maternity benefit).
What about New Born Baby Cover?
Typically, health insurance plans do not cover new born babies until they are 90 days old. However, insurance plans with maternity benefit cover the new born babies from day 1. Please understand not all plans with maternity benefit may offer this facility. Some even offer to cover vaccination charges for the new born baby.
In some of the policies, the new born baby is covered till the end of policy year without any additional cost. This is an advantage of health plans with maternity benefits.
I already have a plan with maternity benefits. What should I do?
If you have a plan with maternity benefits (and are NOT planning kids in the very near future) and are paying a high premium, you can port to a different plan. You will retain continuity benefits (credit for waiting period served) while porting to a new plan.
Do not pay the additional premium for maternity benefit. Maternity (child delivery) is a non-recurring expense. Pay it happily. There is no need to pay extra premium every year.
Since the maternity benefit is likely to be capped, the numbers don’t add up. Waiting periods add up the overall cost of maternity benefit.
Rely on the group health cover by your employer to cover maternity expenses. For the personal plan, pick up a plan without maternity benefit and save on premium cost.
Disclosure: I have purchased a health plan that provides maternity benefits. In fact, I made a claim under the plan for maternity expenses recently. J I had purchased the plan quite some time back when I could not comprehend the differences as well. I have continued with the plan (despite a higher premium) partly because of inertia and partly because I am quite satisfied with the services of the insurance company. Moreover, my wife and I were planning for a baby and were expecting this expense. So, didn’t think of porting it to a different plan. I will consider porting it to a different plan (without maternity benefits) at the time of renewal this year.
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