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Buying a Health Insurance policy may seem like an uphill task because of the misconceptions around insurance in understanding the technical terms or navigating complex policy documents.The wide array of insurance products available along with the vast choice of insurers can also overwhelm you, especially if you are a first-time insurance buyer.If you have been considering buying Health Insurance but are unsure of where to begin, this guide will answer all your questions. It will help you make informed decisions on the right coverage amount, the apt policy type depending on your needs, policy terms and conditions to look out for, etc. Also Read: How should you plan Health Insurance for your parents?
Why Health Insurance is important
Sedentary lifestyles and deteriorating environmental conditions contribute to various health complications, such as arthritis, diabetes, hypertension, certain types of cancer, etc. Although technological advancements have made it possible to treat many health issues, paying for such treatments can take a massive toll on your savings. A Health Insurance policy provides both a financial cushion and mental peace when dealing with any such health emergency.The way Health Insurance works is simple. You pay regular premiums to your insurer; in return, your insurer promises to cover your medical expenses up to your coverage amount.
Types of Health Insurance plans available
The Indian Health Insurance sector has evolved tremendously over the years, and private Health Insurance companies now offer various plans to suit your specific needs. Being aware of the different types of Health Insurance policies available can help you make the right choice. Some of the most common types of insurance policies are:
- Individual Health Insurance covers the healthcare expenses of only the policyholder.
- Family Floater Health Insurance covers all your family members under a single policy.
- Senior Citizen Health Insurance plans are for people above 60 years. They offer preventive health check-ups, pre-existing disease coverage, critical illness coverage, etc.
- Maternity plans that cover expenses you may incur for pre-natal and post-natal care of the mother and the newborn baby.
- Critical Illness Insurance that you can either purchase as a standalone policy or as a rider with your base policy. They provide a lump sum payout or coverage of treatment costs on diagnosing critical illnesses such as cancer, kidney failure, Parkinson’s, Alzheimer’s, etc.
- Group Health Insurance that companies offer to their employees.
- Pre-Existing Diseases Health Insurance covers your existing health conditions such as diabetes, hypertension, thyroid, etc.
Steps to follow to get the best Health Insurance plan
Now that you know the importance of having Health Insurance and your options, let’s look at how to buy a health plan.
Assess your Health Insurance needs
Assessing your medical needs is the first step. List down the age of all family members, any pre-existing health conditions, the potential risks of a member’s recurring medical expenses or hospitalisation, etc. Keep in mind the size and composition of your family. It will help in deciding the type of policy you require. For instance, a Family Floater plan may be cost-effective and easy to manage if your family has many dependents.
Evaluate your premium payment capability
Next, assess your income, expenses, and ability to pay the premiums for the duration of the policy, as it will help you decide the coverage amount.
Compare policy features and quotes
Finally, compare plans from different insurers to pick the one that best suits your needs. Review the coverage benefits, policy exclusions, waiting periods, sub-limits, co-payment clauses, etc. Choose a financially stable and reputed insurer with satisfied customers and a good claim settlement track record.
Identify practical riders
Riders or add-on covers are options you can obtain by paying an additional premium. For example, if your family has a history of cancer, you should consider purchasing critical illness insurance to cover cancer-related treatment costs. It is a significantly less expensive choice than getting a separate cancer policy. The rider will assist you in obtaining additional coverage above and beyond the amount insured by your standard policy.
Read the fine print of your policy
Before you sign the policy papers, read the terms and conditions properly. Pay close attention to the following components of the coverage:
- Room rent: Check if there are any limits on the rent or category of room you can opt for in case of hospitalisation.
- Daycare treatment: A daycare treatment does not require hospitalisation or gets completed in less than 24 hours. Cataract surgery, chemotherapy, etc., are examples of daycare treatments. Look for a plan that covers the maximum number of daycare treatments.
- Pre-hospitalisation and post-hospitalisation expenses: These are costs incurred before and after hospital admission. Generally, insurers cover these expenses for 30-90 days. However, some plans may have a limitation on the coverage amount. Look for a plan that provides maximum coverage.
- Exclusions: Health policies may exclude coverage for pre-existing diseases such as diabetes, hypertension, etc. There may be a waiting period during which you cannot make any claims. The policies also usually do not cover cosmetic procedures, self-inflicted injuries, alternative therapies, etc. Also, carefully check if there are any sub-limits , which might mean a part of the expenses is to be borne by you. Exclusions are the most crucial part of your policy document, stating what you can and cannot claim.
Understand the claim process
Look for an insurance policy that offers flexibility to choose between cashless and reimbursement claims.Cashless claim: Insurance companies that offer cashless claim facilities have a hospital network. You can choose a network hospital for any treatment. Following the treatment, you must fill out a cashless claim form. The hospital will then forward it to the insurer for verification. After auditing the bills and the claim amount, the insurer settles the amount directly with the hospital. It is a hassle-free method, and you need not bear any cost from your pocket. Remember, you can only avail of a cashless claim facility if you get treatment at the insurer's network hospital.Reimbursement claim: If you get treatment at a hospital outside the insurer's network or opt for a reimbursement claim method, you must initially pay the treatment expenses from your pocket. After the discharge process, you can file a claim by submitting the reimbursement form and the necessary bills and receipts of the expenses to back your claim. Your insurer will verify the bills and notify you about the claim approval or rejection. If the insurer approves your claim, the money will be reimbursed to your bank account.
Know the renewal rules and processes
Health policies come with a specific renewal period, usually one year. It is good to be aware of the renewal terms of your policy. Pay attention to the following points.Premium changes and renewal period: Understand how much your premiums could increase during renewal due to changes in age, health conditions, etc. Also, find out when to renew the policy before it lapses. Waiting period: Ensure the renewal does not reset the waiting period for pre-existing diseases, etc. No Claim Bonus: Check if you can become eligible for specific discounts or higher coverage when you renew if you do not make any claims during the year. Benefits review: Find out if your policy allows changes in your riders, coverage, etc., during renewal.
Submit the application form and documents, and pay the premium
Do not miss out on or exclude important information about pre-existing health conditions, past medical history, etc. Submit all proofs relating to age, income, address, etc. Pay your first premium through your chosen payment mode, i.e., online or offline. Retain the payment receipt and a copy of all submitted documents. Also Read: How to file claims if you have multiple Health Insurance plans?
Key Takeaway
- There are multiple types of health plans such as Individual Health Insurance, Family Floater plans, Senior Citizen Health Insurance, Maternity plans, Critical Illness Insurance, etc.
- Buying Health Insurance provides additional benefits such as cashless treatment, No-Claim Bonuses (NCB), free health check-ups, and tax concessions.
- Assess your family size and composition, insurance needs, and affordability on premium payments to identify the right policy.
- Comparing various plans from different insurers will help you make informed decisions.
- Reading the policy fine print is extremely important. It gives you a clear picture of what medical expenses your policy covers and those you will incur out of your pocket.
- It is best to choose a health policy that provides cashless claims.
- Understanding policy renewal terms can save a lot of hassles.
- Hiding any health-related information from the insurer can prove risky when making claims. Be truthful.
FAQS - FREQUENTLY ASKED QUESTIONS
What does Health Insurance cover ?
Health Insurance plans generally cover hospitalisation expenses, including room charges, doctor fees, surgeries, medicines, and diagnostic tests. Some policies may offer other benefits, such as maternity coverage, preventive care, and alternative treatments.
What is the ideal sum insured for Health Insurance ?
The ideal sum insured for Health Insurance depends on factors such as age, health condition, city of residence, and affordability. Choose a sum insured that covers potential medical expenses, including hospitalisation costs and treatments. These days, experts recommend that the coverage amount be at least six times the salary. For example, if your monthly salary is ₹50,000, you must get coverage for at least ₹3-5 lakhs.
What is the waiting period for Health Insurance ?
A waiting period is when your Health Insurance policy does not cover certain specific illnesses or treatments. There are usually two types of waiting periods: initial waiting period (usually 30 days) and pre-existing conditions waiting period (ranging from 1 to 4 years). Understanding the waiting periods associated with a policy before purchasing it is essential.
How long should I buy Health Insurance for ?
The duration you should buy Health Insurance depends on your circumstances and preferences. Generally, it is advisable to purchase Health Insurance for the long term to ensure continuous coverage and lock in benefits at a younger age. Many insurers offer policies with one or two years or even longer renewable terms. Consider factors, such as your current health condition, age, financial stability, and future healthcare needs when deciding the duration of your Health Insurance coverage. Remember that as you age, the likelihood of developing health issues increases, so having uninterrupted coverage can be beneficial.
Should I buy private Health Insurance if my employer has provided me with an existing Health Insurance plan ?
If you are working in a government or private sector organisation, the employer may cover you and your family (mostly only spouse) under the Corporate Group Health Insurance plan. However, you must know that the same has limited coverage, and the sum assured may not be enough to address your health issues adequately. Hence, many financial experts recommend people buy an individual healthcare policy from a private Health Insurance company.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
