Things To Consider Before Buying A Health Insurance Policy
Having the right insurance cover at the right time can make a huge difference during a medical emergency. But health insurance policies come with pre-set rules, some are made for seniors, others are custom-made for specific diseases, etc. That’s why, you cannot take a blind aim while choosing a health insurance policy. Thankfully, this article lists 8 things to consider before purchasing health insurance to help you zero in on the best policy for you and your family. Read on to make the right decision.
8 Things to Consider Before Purchasing a Health Insurance
While there is no perfect formula, here are a few tips to help you make the best choice for you:
1. Claim Process
A seamless claim settlement process is a real blessing at the time of settling medical claims. Go through the website of the insurer, the agreement and the customer reviews as well to know about the efficiency of the insurance provider.
2. Insured Amount
Your health insurance premiums are breakups of the insured or coverage amount. The higher the insured amount, the more the premiums. With the inclusion of the add-on services, you might have to pay a little extra, but it will be worth it in case you face a medical emergency. Go through and understand the details of the total insured amount before signing the agreement.
3. Network Hospitals
Many insurance companies now provide the facility of cashless claim settlement. This option might seem attractive; however, you should know that this facility is only available at the network hospitals of the insurer. Check with your insurer to see if those hospitals are in close proximity to your location. You won’t have to travel long distances during times of emergency if your insurer provides a vast chain of network hospitals.
4. Renewal
Ideally, you should purchase a health insurance policy which provides a renewal facility. Every insurance policy comes with a validity period, and policyholders are advised to renew their policies to continue availing their benefits even after their expiry. You can also review your coverage amount during renewal.
5. Free Check-Ups
Costs for medical check-ups have gone sky high and are getting more expensive with each passing day. A regular check-up is necessary, and it should be included in your health insurance plan. Check with your insurer if there is a preventive health check-up plan included in your policy.
6. Inclusions and Exclusions
It is advisable to read the inclusions and exclusions of your health insurance policy. Health policies can be illness-specific too. Not knowing all the details of your policy can lead to claim rejection and unexpected expenses.
7. Add-On Covers
Every health insurance provider has some add-on facilities to choose from. Check with your provider and see if the add-ons are suitable for you and whether they can be availed by your family members. For example, if you have a spouse, you might want to get a maternity add-on.
8. The Co-Payment Clause
For a sweet discount, an insurer may ask you to consider a policy with a 20% co-payment. This will look attractive today but every time you make a claim, you’ll be out of pocket.
Once you’ve considered all of the above and taken into account your own financial situation, pick a policy that gives you the best possible coverage. A few tips:
- A good baseline is picking a percentage – say 3% or 5% – of your annual income when determining how much premium you’re willing to pay.
- When thinking about your coverage or “sum insured” you should try and obtain a cover that is between 50 to 100% of your annual income;
- Make sure you’re thinking about sudden contingencies and their financial impact on rising health care costs.
What to Avoid While Buying Health Insurance?
One should carefully read the terms and conditions of a health insurance policy before going ahead with the purchase. There are a few things that you should avoid while buying a health insurance policy. Some of them have been discussed below:
- Insufficient Research: There are multiple health insurance companies available in the market that offer various types of policies. Be sure to do thorough research and choose the one best suited to your situation and needs. Also, compare the premiums and coverage amounts of different health insurance policies to get the one that suits you financially.
- Inadequate Coverage: Health insurance coverage is one of the most significant factors to consider while purchasing a policy. But it should not be the only factor. Insufficient coverage amount may not be useful during medical emergencies. It is always advisable to contribute a considerable amount rather than selecting a low-cost health insurance policy that covers a limited amount of expenses.
- Hiding Medical Records: Policyholders are advised not to hide certain illnesses or habits while purchasing health insurance. An insurer has the right to reject any claim on the basis of non-disclosure of medical history. To avoid such instances, one should be upfront and clear about his/her medical history and habits from the get-go.
- Misreading the Co-Payment Clause: The co-payment clause of health insurance is mostly available for senior citizens and expensive treatments. This also cuts down the premium amount as compared to an insurance policy without a co-payer. This clause mentions that certain expenses are to be shared between the insurer and the insured. One should carefully go through the terms and conditions of co-payment clauses and the percentage ratio of the shared amount while opting for this facility.
- Not Paying Attention to the Sub-Limits: The insurance provider mentions maximum limits for certain expenses, which is known as a sub-limit of a policy. It is recommended that you review the sub-limit conditions carefully and have a discussion with your insurer before opting for the insurance.
Final Word
Investing a little more today can be vital tomorrow! Health insurance policies are absolutely necessary to tackle any unforeseen medical emergencies. However, one should be well informed about the dos and don’ts while purchasing a policy from the plethora of options available in the market.
FAQs on Things to Consider Before Purchasing Health Insurance
Ans: There can be multiple illnesses and treatments excluded from a health insurance policy. It usually depends on the terms and conditions of the policy. The list may include dental treatments which do not require hospitalisation, intoxicant abuse, general debility, AIDS, self-inflicted injuries, infertility treatment, convalescence and many more.
Ans: There is no such maximum number specified on a health insurance policy. There might be a scenario where your insured sum amount gets exhausted after one or two claims. Most insurance providers offer a restoration option for such circumstances.
Ans: The waiting period of your health insurance policy depends on your insurer, and no charges are payable by the insurer during that period. However, most insurance providers exclude accidents from such clauses. Hospital expenses due to accidents during the waiting period are usually covered by the insurer.
Ans: The age criteria for adults range between 18 and 65 years, whereas, for children, this varies from 90 days to 18 years of age.
Ans: As per Section 80D of the Income Tax Act, policyholders can avail of a tax deduction of up to Rs. 1 lakh on health insurance premiums.
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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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