Life and uncertainties cannot be separated. Although we cannot prevent medical contingencies, we can be prepared for them by including health insurance in our financial portfolio. But how will you know which policy is right for you? With the myriad of health insurance providers and plans available, selecting the right one may be overwhelming. The number of choices, the policy wordings and complex rules makes the task even more daunting for the buyer. Here, we discuss the top factors to consider before choosing a policy and signing on the dotted line.
Why is Choosing the Right Policy Important?
Health insurance is probably one of the most judicial investments that you will ever make. A policy with adequate coverage, the high sum assured can help you avail the best treatment at times of need. Health insurance acts as a safety net for you and your loved ones during an unexpected medical emergency. With insurance, your family will not be financially drained or left helpless. Choosing the right health insurance policy with optimal offerings ensures that you and your family get maximum protection at affordable rates. Before you make the decision to buy an insurance policy, researching certain factors is vital.
Factors to Consider Before Buying Health Insurance
Here is a rundown to different factors that must be taken into consideration before buying a health insurance policy:
Choosing to buy an insurance policy as early in life as possible is a prudential decision. Scouting for health insurance policies after middle age is risky as age-related disorders begin to show up. The older you are, the less insurable you become and greater the premium amounts are. By buying health insurance at an early age, the buyer doesn’t need medical check-ups, there are lesser chances of rejection, coverage for more diseases are provided, policy renewal is quick and hassle-free.
The sum assured is the maximum coverage amount of the policy the insured can get in a year. It is the base amount for all the claims. Before choosing the sum assured, you must consider the increasing costs of treatment and hospitalization. You must strike the right balance between coverage amount and premium depending on the needs of the primary holder and dependent family members. Although it is good to go for a higher cover, it must come with an affordable premium amount.
Claim Settlement Ratio and Process
The claim settlement ratio is proof of the legitimacy of an insurance provider. It is important to research the claim settlement ratio and the number of claims settled by the insurance company on time from their official website before choosing their health insurance policy.
When you or your loved ones fall sick, the last thing you need is a delay in claim settlement. Simpler the claim process, faster the settlement of the claims. Therefore, the claims settlement process is a crucial factor in choosing the insurance company.
Premium, Co-pay and Deductible Amounts
The premiums for health insurance policies are decided based on several factors such as age and number of insured members, add-on riders opted for, medical history, existing ailments and so on. Before signing on the dotted line, you must compare plans and choose the one that has the best coverage with the most affordable premium.
Generally, the policy coverage amount determines the premium, co-pay amount and the deductible. Co-payment is the share of the claim amount that the insured must pay from his pocket.
A deductible is an amount that the policyholder pays for healthcare before the insurer begins to pay.
One of the most important factors to consider before zeroing on a health insurance policy is to check if the insurance provider is offering a cashless mediclaim facility. With cashless treatment, the policyholder can undergo medical treatment in any of the network hospitals of the insurance company without incurring out-of-pocket expenses.
Pre and Post Hospitalization Cover
Pre and post hospitalization expenses coverage may include treatments, tests, doctor visits and other expenses incurred before or after hospitalization. Different insurance providers have different rules concerning pre and post-hospitalization coverage. You must check if your policy covers it.
There is a possibility that you buy an insurance policy for health but do not fall ill or get hospitalized and end up not claiming the sum assured. In this event, most health insurance companies offer a no-claim bonus for each claim-free year. You must read the policy document exhaustively to understand the no-claim bonus clause of the insurance company. Typically, no claim bonuses range between 5% and 100% of the sum assured. A good no-claim bonus can cover you from medical costs inflation and increase of yearly coverage.
Health insurance provider ties-up with several hospitals where customers can avail cashless reimbursement of expenses. These are known as network hospitals. At a network hospital, you can concentrate on getting treatment rather than worry about expense reimbursement, and the insurance representative will take care of expenses. You need to pay only the sum of money exceeding your coverage amount. Before signing up for a policy, it is important to check the network hospitals affiliated with the provider and if the hospital of your choice is covered or not.
Maternity and Day-care Benefits
Like other medical expenses, pregnancy-related expenses have also skyrocketed in recent years. You must check if the health insurance policy chosen offers maternity benefits. Under maternity benefits, factors such as waiting period, sub-limits, emergency procedures, out-patient expenses and exclusions related to the coverage must be researched.
Many healthcare policies now extend coverage for day-care procedures. But before buying the policy, check the number of procedures covered under it that doesn’t require overnight hospitalization.
Inclusions and Exclusions
A common mistake made by an insurance buyer is not reading the fine print of the insurance policy, namely the inclusions and exclusions. For instance, diseases such as AIDS, HIV and STDs are excluded from coverage. Similarly, cataract surgeries, dental and cosmetic treatment expensed are not covered. On the other hand, some policies cover personal injury as an in-built feature in their policy coverage, where it can be bought separately as well as add-on. The policyholder needs to understand what treatments are covered and what are not covered to ensure a smooth claim filing process.
Critical Illness coverage
Most comprehensive health insurance policies cover critical illnesses. A basic health insurance policy will not cover treatment for cancer, kidney failures, and tumours and so on. The treatment expenses for these diseases will drain away from your life savings. Hence it is better to opt for a comprehensive health care plan and top it up with an accidental rider for optimal coverage.
All health insurance plans have waiting periods for coverage of certain illnesses and pre-existing diseases. This means that if you are suffering from an ailment at the time of policy purchase, the insurance provider is not liable to cover hospitalization expenses until a certain period as specified in the policy document. It is prudent to choose an insurance policy with the minimum waiting period to avoid trouble later on.
You must decide if you want to buy individual health insurance or a family floater policy. The coverage and the premium for the family floater plan will be higher than the individual policy.
The family floater plan will be a good choice if all the family members have no major health issues. But if a member has any serious ailment, it is better to opt for an individual health insurance policy to keep the premium level low.
Before you buy…
Declaring your complete medical history and critical information to the health insurance provider is as important as going over the fine print of the policy documents. Once you strike the right balance between your requirements and offerings of the provider, you can make an informed and judicious decision to buy the insurance policy.