Planning to buy a Health Insurance: Some pointers

Buying the right health insurance policy for yourself and your family is a critical decision. Ignorance of the simple factors can lead to a big hit on your pocket despite you holding a health insurance plan, and paying regular premiums. So, one needs to be careful while zeroing down on the right plan.

In India, health insurance is a growing segment. The ratio of the population which are covered with health insurance is fairly low. However, with the increasing awareness and the current covid breakout, the demand for health insurance in India has gone up. Often while buying a health insurance plan, one gets attracted towards a low premium without understanding the terms and conditions and the underlying implications. If you plan to buy insurance through an agent, don’t hesitate to throw your queries at him. Read the terms and conditions carefully and discuss everything in detail.

However, if you plan to buy it online go for a website that states the terms and conditions clearly. There are a few websites that list down everything in detail, including the pros and cons of each plan. Remember transparency from your Insurance provider is a key factor and if you have the slightest doubt w.r.t the policy terms offered, it’s better to revisit your decision, rather than hanging on to it.

Here are a few factors which you can keep in mind while buying the health insurance plan:

• Claim and settlement process: Before buying health insurance, always ask the service provider about the claim settlement ratio and compare it with the peers. An insurance plan with a poor claim settlement ratio is not worth buying even if the company is willing to offer a customized plan at an affordable premium. Further, try to understand the process involved in claims and settlement.  Simpler the process, the better it is for the Insured.
• Riders: Check for the riders that accompany your policy. A rider is an additional benefit that can be included in your basic health insurance plan. By adding a rider you will be able to expand your insurance coverage at a lower cost.
• Renewability option: Choose a policy that gives you a lifetime renewability option. Some policies give you coverage only up to a specified age. The main aim while buying health insurance is to have coverage during old age. Hence, try and choose a plan which offers lifetime renewability.
• Co-payment Clause: Check if your policy has a co-payment clause. A co-payment clause mandates that the policyholder will bear a certain amount and the rest will be settled by the insurance company. It is very important to assess this clause to understand what claims will be settled by the insurance company and what burden is being loaded on you. In the co-payment option companies lure you by offering discounts up to 25% on the premium amount. Initially, it looks lucrative, but eventually, when it comes to actual expenses, it will be a big hit on your pocket.
• Declaring existing health conditions: Sometimes, people who are buying health insurance prefer not to share existing health conditions to avoid any additional premium burden. However, it’s best to declare all your existing health conditions to avoid any kind of confusion/hassle in the future.
• Waiting Period: Some insurance plans cover existing ailments, but specify a mandatory waiting period during which you cannot claim the benefits of your health insurance. Hence, get a plan which provides you coverage for the existing ailments, with a minimum waiting period.
• Sub-limit on expenses: Try and look for a policy that does not have any sub-limits on the expense/diseases. Sub-limit means that any expense above a certain amount has to be borne by the policyholder. There can be sub-limits on room rent, doctor consultation, medical procedures, etc. The policy document specifies the sub-limits of various expenses. One can opt for a comprehensive plan with no sub-limit, but the premium amount is usually higher in such policies. In case you opt for a health insurance plan with some sub-limits, do verify the list of expenses/procedures that are covered under this sub-limit.
• Capping of room rent: Avoid a policy that has a cap on the room-rent. If you take a policy with room rent capping then the company might compensate only a portion of the total insurance claim and the balance might have to be borne by you. For example, if you have taken a policy in which the room rent is capped at Rs. 15,000/- and your actual room rent is Rs. 20,000/-, then all other expenses will be reimbursed in the ratio of the Capped Rent to Actual Rent. So, in this example, the insurance company will reimburse only 75% of the total expenses.
• No claim bonus/discounts: Many insurance companies offer no claim bonus/discounts to policyholders. In such cases, you have the option either to increase the sum assured or decrease the premium amount. It’s better to go for an increase in the sum assured so that it will take care of increased expenses in future.
• Pre/Post hospitalization expenses: See that the insurance policy offers coverage on pre/post-hospitalization expenses like follow-up with the doctor, medication, follow-up investigations, etc. Also, check if the day-care procedure/out-patient procedure is covered. Proper coverage for these expenses will help you save money.
• Cashless Mediclaim: There are several health insurers in India that provide cashless Mediclaim. A cashless facility is an important factor as the payment will be made directly by the insurance company to the hospital. Always analyze the network of hospitals that are attached to the policy and their accessibility w.r.t. your location to avoid any last-minute hassles.
• With skyrocketing medical expenses, maternity expenses have also gone up. One should consider the waiting period applicable for claiming maternity expenses and any sub-limits attached to it. Maternity health insurance plans are accompanied by a waiting period ranging from 9 months up to 6 years. Most insurance companies do not provide maternity Insurance if you are already pregnant.

Other factors to consider:

• Check for the health insurance plan that your company is offering. If your dependents are not included in it, then you can consider buying a policy for them.
• Ensure that the Insurance form is filled by you. If you are taking the agent’s help to fill the form, see that you have checked it thoroughly. Basic mistakes in the form can hamper your claim/settlement process. Further, if possible, keep a copy of the form submitted as your backup, in case of any discrepancy in the future.
• Even though your insurance agent might have explained everything in detail, it is advisable to go through the terms and conditions once the policy is issued. If you are not satisfied with the policy conditions, you can surrender the policy within the timeframe given by the service provider.

In case you already hold a health insurance plan, revisit your policy to check if you have missed any of the above points. If you are planning to buy one now, keep in mind the above pointers to buy a plan that secures your finances against unforeseen medical expenses.