In India and the rest of the world, the medical inflation rate is much higher than general inflation. And hence, having medical insurance is becoming increasingly important. Having a health insurance policy will help you be ready for any unforeseen and unfortunate event.

The insurance market is flooded with several policies, and all of them claim to the best at what they do. However, it is crucial for you to pick a plan that will best suit your requirements. While picking up the right policy, you must keep in mind your family’s future, more than the present. Here are some tips to consider when you zero down on the policies.

Deciding the kind:

There are two kinds of medical insurances available in the market- indemnity plans and defined-benefit plans. An indemnity plan will reimburse the entire hospital expense, whereas, the defined-benefit plan will pay a lump-sum amount of the total expenditure made.

To understand this better, insurances for individuals or families are examples of indemnity plans. In most cases, indemnity plans are the preferred choice of individuals. On the other hand, insurances for critical illnesses are defined-benefit plans.

If you plan on taking indemnity plan for your family, and someone in the family suffers from a critical illness or is above 50 years of age, an individual plan or defined-benefit plan for that individual should be beneficial.

Check the sub-limit

Some policies come with a sub-limit in the plan. This refers to limiting the pay out of the claim. For instance, if the room-rent is capped at 1% of the policy amount, if you do not stay in the limit and spend more than the decided amount, you may have to shell extra money out of pocket. Look for a policy that doesn't include sub-limits, or even if it does, they should be higher/doable.

Other points to check:

  • Co-pay: If a policy has a co-pay clause, you will have to pay a certain percentage of the total expenditure from your pocket. Look for a policy with no co-pay clause.
  • Exclusions: Most policies have standard exclusions. Even then, it is essential to discuss this with the insurance provider, so you maintain transparency.
  • Terms and conditions: Before you buy health insurance, make sure to read everything mentioned in the terms and conditions. It is a time taking time, but you will be thankful later.
Health insurance plans are portable, thanks to IRDA. But, this does not mean you can do this now and then. Choosing a policy wisely is very important and is an equally important step towards careful financial planning. Take your time and pick a plan that best suits your needs.

Learn more about different Health Insurance Plans here.

DISCLAIMER

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.



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