How to select a student insurance policy

Student insurance policy is a must as students are very likely to stay abroad for a long period of time. So to protect them against any kind of accident we have devised a student policy, says Tata AIG, Travel Insurance Chief, Khalid Suhel. "It even protects the sponsors against an accident," he adds.
"As more and more people are going abroad to study, the number of students taking the student insurance cover is going up. As per the estimates available with us, 1.5-1.75 lakh (150,000-175,000) students go abroad and about 40% students buy the policy in India. While those who go to neighboring countries don't buy the policy, some prefer to take the policy from the same university they are studying in and in many cases, the universities insist that students buy their policy, says Suhel.
Suhel lets you know how to choose cheap and a good insurance policy in an interview with CNBC-TV18.
How to select a student (insurance) policy? What are the things that should be covered under the student policy?
Prerna Shahne, employee
Depending on the medical price index, first decide your optimal requirement of medical sickness. Also, see if the policy covers benefits like study interruption (in case you fall ill and discontinue your study), sponsor protection (when you are abroad and your parents meet with an accident), two way compassionate visit and personal liability (if you are abroad for a long time and you cause damage to a public property).
It all depends on the size of the personal liability cover. So you have to keep these things in mind and the country you are in. The country you are living in has a medical price index.
While you can get a heart operation done for Rs 1.5 lakh (Rs 150,000) in India, abroad that kind of money may not mean anything. In Singapore, $50,000 (US) is quite a bit, but in US it is quite less. In a nutshell, if you take the policy cover in India, you pay in Indian rupees while the cover is given to you as per the currency of the country.
Which are the insurance covers that are available in the market for students and how beneficial are these insurance policies? As I am going to Singapore for studies I want to know what these policies offer to students?
Hetal, Surat, Student
The product that we have designed has three components. First component is related to accident and sickness. Second component is related to travel and covers loss of baggage and any such travel convenience that you face when you are abroad. Last part is sponsor-related -- like sponsor protection and study interruption. For example, if you have met with some sort of accident that your studies are in danger or there is some sort of break in the studies. And I think a student policy should have all these components.
As far as Singapore is concerned, luckily its medical price index is not as high as that of the United States. So I will recommend that you don't take a cover worth Rs 2 lakh (Rs 200,000), while Rs 50,000 policy will be enough. Medical pricing in India is very different from other countries.
I will be doing a two-year MS program in Australia. Is the country covered under your insurance scheme?
Kabir Sayyad, student, Chennai
Yes, Australia is covered. Sickness and accident covers are available for US$50,000, US$200,000 and US$100,000. This plan is divided into two parts -- for students going to America and those who are going to other countries (excluding America and including America). So Kabir falls under the latter category and policy cover worth US$100,000 is available.
Besides this, emergency evacuation and repartition of remains are included in the standard terms. Kabir also gets a cover for baggage loss and personal liability cover. Study interruption is for US$7,500, sponsor protection is for US$10,000, etc.
What are the study interruptions that are covered under the insurance policy? Will the insurance company accept my claim when I fall sick abroad in case I take a student insurance policy before going to America?
XYZ, Student
Every insurance policy has a system to settle claims. Normally, insurance companies work through assistant companies and these companies have their presence all through. If an insured person meets with some kind of accident, he has to call a toll free.
The companies have the idea of the medical map of that country. These companies guide you to the best specialty hospital of that area and also seek an appointment for you. In case of hospitalization, you can have cashless insurance where the student doesn't need to pay the hospital.
I plan to go to US for studies. So should I take student insurance in India or in the US?
Abbas Kolkatawala, Student, Mumbai
You can do either way. The only difference is here you pay US$300 as compared to US$12,000 in the US. Many universities include insurance in their tuition fee. The cover may include many things that an Indian student may not need like drug addiction protection and pregnancy protection.
Our socio-cultural background is such that we don't need these benefits. But if I take the insurance product from the university, these things are included in the products abroad by default. You will have to negotiate with the universities abroad and get the benefits you require.
Can I take the student insurance policy before admission to a university abroad? Will it have validity there?
Chinmayi, professional, Bangalore
There are some typical benefits your policy should include like compassionate visit. Normally insurance companies abroad don't provide it, while Indian insurance companies do it. Many universities don't give sponsor protection in their policy whereas it is quite important for an Indian student. However, many universities abroad demand a certain type of policy and no variation in the benefits.
Therefore, a lot of people don't take the policy from the country and prefer to take it from the foreign university. Some are able to negotiate with their university and save up to US$900.
Claim wouldn't get passed in the following conditions -- a suicide instead of accidental death or if the student is suffering a disease before taking the policy. So it is very important to go through the policy wordings before you take a policy cover and understand its finer points and conditions under which you get the claim. Generally the bills are reimbursed in two-three months, while hospitalization is totally cashless as per our company policy.
Important points
First you find out about the important covers from the university where you are seeking admission. Normally foreign companies ask for drug and pregnancy cover which Indian insurance companies don't provide it.
Find out about how the claim is settled. It is better that you take a cashless policy. Don't take a policy where you have to pay the bills and then courier the bills for reimbursement. Also find out about the facilities that you get under the insurance policy.
For example, some companies also bear travel expenses for the relative in case of the policyholder gets hospitalized. Before taking the insurance, find out from the university whether the cover is valid there or not.