The best health insurance policy for you is the one that meets your medical needs. In this article, we will see which factors you should consider before buying a health insurance policy.
With the increasing medical costs due to rising cost of medicines and procedures,living without a health insurance might be the biggest risk in your life. Many people are covered for their health costs by their employer but the cover is usually not sufficient to cover medical emergencies.
As medical insurance is relatively complex products with lots of “fine print”, it becomes very confusing for consumers to select the right term insurance plan. I have tried to capture some of the things that will help you buy the best health insurance plan, especially family floaters..
1. Do not go by price alone
Health insurance is not a simple product like term insurance where one can do a simple price comparison and decide to go ahead. As health insurance products come in various shapes and sizes, choosing the best health insurance plan for your needs is important. So if you decide to pick a health insurance purely on the basis of price, you might end up comparing apples to oranges. Just be aware of this problem!
2. Keep it simple.
Do not go for policies that are difficult to understand and have too many features or “ifs and buts”. Your basic objective to buy a health insurance is to cover large unexpected medical emergencies. No need to bother about regular medical bills.
3. Look for maximum entry age and renewal age
While government owned insurance companies like Oriental or United India Insurance allow a maximum entry age of 70-80 years, most private health insurance companies stop at 65.
4. Check maximum sum insured
Carefully look at maximum sum insured. Religare Health insures up to Rs.60 lakhs while companies like Apollo Munich and Star health provide highest sum assured (up to Rs.15 lakhs). Most of them insure up to Rs.10 lakhs.
5. Pre and Post Hospitalization expenses
Most companies cover 30 days of pre hospitalization expenses. Apollo Munich covers up to 60 days of pre hospitalization and 180 days of post hospitalization period.
6. Pre existing disease coverage
Most companies will cover existing illness after 4 years. Not much choice here!
7. Medical Checkup Requirement
It is always recommended that you get a medical checkup done so as to identify and declare any existing illnesses. Most companies make medical checkup mandatory for people with 45+ years of age. Oriental insurance looks to be most lenient as it required medical examination above 60 years.
8. Waiting period for claiming expenses
Many companies keep an initial waiting period before you can claim any expenses. Most companies have a 30 day waiting period ( Apollo Munich, Star health etc.) whereas Max Bupa has a 90 day waiting period! Government companies( Oriental etc.) have zero waiting period.
9. Examine expense Limits
Many insurers have sub limits on the medical expenses. For example Oriental insurance will restrict room rent to 1% of sum assured. Then some have limits on ambulance expenses, ICU expenses or some ask for a 20% payment contribution from your side. At the same time there are insurers like Apollo Munich, Reliance, Religare and ICICI Lombard( Complete Health Insurance) that work with no co payments or sub limits.
10. Study major exclusions
Most of the times, consumers are confused by the major exclusions in the policy. Sometimes it feels like exclusions are larger than what is included in the policy! Many insurers offer cheaper policies with tons of exclusions. Be careful about such policies as they are not going to give you the benefit you need at the time of hospitalization.
11. Know claim settlement ratio
Since claim settlement ratio can be a tricky metric to judge health insurance, it is nevertheless important not to pick insurers with below average claim settlement ratio. Oriental insurance scores with 90%+
12. Additional Benefits
Companies like Apollo Munich or Religare provide nice additional benefits like “no claim” or auto recharge / Restore benefit that can help you cover increased cost of medical expenses. Some also give day care treatments as well as maternity benefits. Carefully study these extras before taking the final call.
In subsequent posts, I will try to review some of health insurance products in the market which provide value for money.
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