With the recent COVID-19 pandemic, health and health insurance subject are most discussed after. 7 important things that one must pay attention before taking a health insurance plan.
Having adequate health insurance is crucial, because in the absence of it, any medical emergency can burn a hole in your pocket and eat up your savings. This is even more important because health inflation is higher than normal inflation and the cost of treatment has gone up substantially in the recent years. In this article we will look at top 7 things you need to know before you buy health insurance.
It is important to be adequately insured. A sum insured of minimum Rs 5 lakh is recommended for a nuclear family with young children. In major cities where the medical costs are higher, it should be Rs 10 lakh. For family floater plans, the premium will depend on the age of the eldest family member.
Families which consist of elderly parents should have a higher coverage. It is important that you take insurance for the highest amount possible. Remember, an inadequate coverage may lead to major out of pocket expenses in case of a medical emergency.
Health insurers have tie-up with network hospitals. Such tie-ups mean that you will be eligible for cashless treatment and do not need to pay upfront or do paperwork. The insurer will foot your bill. Check that your insurer has a tie-up with the major hospitals, especially the ones near you.
Health insurance plans will have a waiting period for pre-existing diseases like hypertension, diabetes etc which would range from 24-48 months depending on the insurer and the plan chosen. You should choose a plan which has the minimum waiting period.
Though these are standard, it is important to be aware of what the health insurance policy does not cover. For example, health insurance policies do not cover sexually transmitted diseases and plastic surgeries. It is important to read the fine print and check for exclusions before buying a health insurance policy.
Health insurance plans give you a no-claim bonus in the years in which you do not make a claim, and this increases your coverage. However, there is an NCB limit which caps the coverage amount.
Let us take an example. Suppose you have a health insurance policy of Rs 10 lakh. The insurer offers an NCB of 10% with a maximum of 50%. Here, your sum assured will go up every claim free year till it reaches Rs 15 lakh. Before buying a policy, you should check the NCB clauses.
This is of course an important consideration. You should compare different health insurance plans and choose the one with the most reasonable premiums. However, remember that when doing so, you need to consider plans with similar features. Blindly choosing a plan just because the premium is low could be a mistake.
Some insurance plans may have a co-pay option that keeps your premiums low. Co-payment means that the insured agrees to pay a part of the medical expense out of his or her own pocket.
For example, if you have a health policy which has a co-payment of 10 per cent and your total hospital bills is Rs 4 lakh, you have to pay Rs 40,000 while the insurer pays the rest. On the other hand, a deductible clause is a fixed amount that the insured needs to pay irrespective of the total claim. If your policy has a deductible of Rs 10,000, you need to pay that from your own pocket and the insurer takes care of the rest.
Knowing the above before buying a health insurance plan will help you buy health insurance that fulfils the need of your and your family.