Updated on: 16 Jan 2020.
Health insurance becomes the necessity of life because health issues are the reality of present life.
A health issue doesn’t come by knocking the door and ask you “May I come in”. And when it comes, it wipes away all the hard-earned money. So, it’s better to safeguard yourself in advance. Health insurance policy is only one solution that protects you from the unbearable financial burden during a medical emergency. Health insurance covers all your medical expenses (hospital, treatment, surgery) and provides a financial cushion.
Before buying any health insurance policy, you should know some very important facts related to health insurance. In this article, I will talk about these facts.
13 Points To Consider Before Taking Health Insurance Policy
#1. Individual Vs Floater Health Insurance
Floater health insurance plan covers the entire family members under a single policy. On the other side, a single person health insurance policy comes under an individual health plan. You can go with anyone as per your requirement.
I found many people have confusion to decide whether they should go for a floater plan or individual plan. In such situations, they need practical advice.
Here is my advice– If all the members are young, healthy and below 50 years then buy a floater health insurance policy. In case any member is above 50 years, then buy an individual policy for him and buy a joint policy for the rest members. Because, at a higher age the chances of suffering from any critical disease are more and need higher coverage.
#2. Make A Requirement List & Compare With Policy
There are many health insurance companies in India having similar-looking plans with minor differences. That makes it difficult to decide, with whom you should go.
Here’s the solution- Make requirements list that you are looking in an insurance policy like the time period of the policy, maximum member coverage, policy premium, claim ratio, base plan, and your expected top-up cover.
Compare the requirement list with the features of your shortlisted policies. The policy who fulfill more requirements is the winner.
#3. Coverage is More Important Than Premium
Some health insurance charges lesser premium but they have some hidden clause like providing health insurance up to the age of 40-45 years.
Don’t go with any such plans because the chances of suffering from any major health issues start after the age of 45-50 years.
Let’s discuss this with the example below.
You have ‘ABCD’ health insurance that insures up to the age of 45. During the insurance, you got some heart problem. When reaching the age of 45, you buy new ‘XYZ’ health insurance that covers pre-existing disease after 3 years. Now if you suffer from any heart problem (pre-existing) during those 3 years, you will get no claim.
So it is too good to have health insurance policy who cover for a longer period. No doubt, the premium of these policies is higher but will prove beneficial in the long run.
#4. Pre- Existing Disease
Pre-existing disease means already suffering from any disease at the time of buying health insurance. For such a situation, there are two types of insurance policies.
The first one, that doesn’t cover pre-existing disease at all. In this case, you can never claim for medical expenses arising due to pre-existing disease.
The second one, that doesn’t cover pre-existing disease from the first day of the policy but accept after a waiting period, say 3-4 years. In this case, you can claim for pre-existing disease only after the completion of a waiting period.
My advice is, in such a case, go for a policy with a lesser waiting period for the pre-existing disease.
#5. Hospital Room Rent Capping (most important)
Hospital room rent capping is the most important thing that you should know. Insurance companies restrict the room rent up to a certain limit, in most of the cases, it is 1% of the sum assured of the policy.
On the other hand, the hospitals charge for the room according to the type of room selected i.e. general, private, or deluxe. In case of costlier than the capping limit, the insurer deducts not only the additional room rent charges but also deduct a portion of other medical charges in proportion to the room rent.
For example, Mr. X admitted to a hospital having a health insurance form ABC Pvt. Ltd. The company restricts room rent at Rs 1500 per day but he chooses a room cost Rs 3000 per day. On discharge, his total medical bill figures Rs 1,00,000. The room rent capping is Rs 1500 which is 50% of the original room rent i.e. 3000. So the insurance company only passes the claim of 50% of another medical bill that is Rs 50,000 to Mr. X. He has to pay Rs 50,000 from his pocket.
#6. Cashless Or Reimbursement
Insurance companies settled the medical claim in two ways. The first one, cashless claim settlement, in which insurer make direct payment to the hospital after your reporting.
The second one is reimbursement of the medical claim. In this, you need to pay the hospital bills firstly and later you get the reimbursement from the insurer.
The cashless claim policy is better because, in this, you don’t have to bother about fund raising. Bills are settled by the hospital & the insurer itself.
I have also written an article on things you should know before buying life insurance. I hope you would like this as well.
#7. Hospital Network
Before finalizing any insurance policy you must check the insurer’s network with hospitals where you can avail cashless treatment. This hospital should be located near your location.
In any medical emergency, it becomes difficult to reach hospitals far away from your location. Even fund arrangement is also hectic. Both these problems can be solved if the insurer has a hospital network in your easily reachable location.
#8. Buy Health Insurance Policy Online
Insurance companies pay a decent amount of commission to their agent for selling the policy offline. But online, there is no need for the agents and companies save the commission amount. Due to this reason, insurance companies sell policies at a discounted rate online.
You can compare the online policy premium with the offline policy. This is a money saving tip for you.
#9. Choose Policy Broker Carefully
If you still want to buy health insurance offline, then don’t blindly trust any broker. There are always some hidden terms about the policy that you have to know but a broker may hide to sell the policy.
So make sure the broker is fair enough that he would reveal all the hidden facts about the policy (practically difficult to find such a broker ). With all that my advice is, you must also read all the related documents once.
#10. Flexibility of Policy
Flexibility arises a question, can a company changes its terms at the time of emergency???
Just take an example, a person has a health insurance policy that offers only cashless claim settlement. One day he gets a heart attack and in an emergency, he has to admit in a hospital that doesn’t come under a cashless network with the insurer. In such a situation, whether the insurer pays reimbursement or rejects the claim.
Sometimes, in a similar case, the insurance company doesn’t pay any claim because of their terms & conditions. So, make clear all such facts at the time of buying the policy.
#11. Claim Settlement
In most of the health insurance policies, the claim is settled down by TPA (third party administrative). In TPA, Health Insurance Company only sold the policy. All claim related work like claim settlement and collecting claim documents is done by TPA.
In such a case, search for the TPA and try to find out how efficiently it works. You can find this from the old clients of the insurance company or from the hospitals that are within the network of TPA.
Even still there are some health insurance brands available that settle themselves, you can prefer these companies.
#12. Buy a health insurance policy as earlier as possible
It is often seen that people finding their dream policy that has less premium, high cover, less claim settlement time, no further processing & so on.
But sometimes they become too late. They might cross-age limit or get suffered from some disease which will never be covered. So it’s my suggestion to buy a health insurance policy at an early age.
#13. Top-Up Health Plan
Anytime you feel that your current sum assured limit is falling short, you will have an option to a top-up health plan. A top-up health policy provides additional coverage. It is for reimbursement of expenditure which arises out of single illness beyond the limit of the existing cover.
For Example, your health insurance provides a cover of Rs.5 lakh rupees and you buy a top-up plan that provides you the cover of Rs. 4 lakh. The top-up amount comes in use only after the threshold limit is crossed. So, if you have a claim of Rs. 8 lakh then first of all base policy of Rs. 5 lakh will be used and the left Rs.3 lakhs are given from the top-up plan.
The top-up plans are advisable in need of increasing the health insurance coverage because the top-up plans are cheaper than the basic health insurance.
In conclusion, I want to share a small conversation. Once, a person asked me very interest question.
Question- I am unmarried & no other one is dependent on me. Then why I should buy health insurance?
My Simple Answer was – if no one is dependent on you, it doesn’t mean that you will not go to the hospital for treatment for any medical problem. You will definitely go to the hospital and will also pay the treatment bills. Health insurance is about to save you from such financial burden not for providing financial security to your family
In the end, I just want to say you to keep all these points in your mind while buying a health insurance policy.
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