And here comes the much awaited article on health insurance. A big thanks to all those who have suggested this topic to me.
Health Insurance is neither an unknown term for us nor is the need for it. The growing costs of health-care and increased vulnerability to diseases have automatically induced the need for health insurance. Even if our employer provides a group health cover, it is advisable to have one of our own so that it helps us in event of job-change, job-loss or job-quit.
However, the problem is, many of us just go ahead with buying any health insurance plan without doing any home-work. This results in delayed / declined claims and disputes / regrets later on. The better idea would be to do a check of some key points before we go in for buying a health insurance plan for ourselves.
1. Prefer Floater over individual policies
Although the benefits of a floater are more or less known to everyone, it is not uncommon to see people going for individual plans. In addition to lower costs, the floater is also more beneficial in terms of providing a higher health cover to all the family members.
Another good idea could be buying separate floater plans for you + Spouse and your parents. This would reduce the overall premium costs and would still give you a sufficient health cover.
2. Check for exclusions
This comes as one of most important factors when evaluating across health insurance plans. Many of us select a health insurance plan merely on the basis of lowest premium. I agree that, premium amount should be one of the major factors to arrive at a decision. However, it cannot possibly be the sole factor for sure.
Check for exclusions. There would be few exclusions which are permanent in nature and common across plans. However, there would be few which can vary from plan to plan and Company to Company. These are the tricky ones which deserve a closer look. Also, there are a few illnesses which could either have a waiting period or a limit on claims. We also need to check if we are comfortable with those.
3. Check for Sub-Limits and “Caps”
It is one of the most favourite areas of the insurers to play around. Plans that sound cheaper than others could have a sub-limit / cap on room –rent, specific claims, ambulance charges etc. Having a careful look at those gives us an additional factor to do a compare among plans.
4. Check for Co-Payments
There are a few plans available for the elderly (60+ , 65+ etc) which come with a Co-Pay feature. As the name suggests, the feature basically means that in case of a claim, the insurance company will pay (say) 70-80% of the claim amount and the balance needs to be paid by the proposer. Now the good news is, even if it is Co-pay, health insurance plans are available for those who need it the most.
The Check-point is the ratio of Co-Pay. Also, read the fine print for cases in which the company would not Co-pay.
5. Check for No-Claim Bonus
Generally, all plans would offer us a no-claim bonus. However, the way of offer might differ. Some might reduce the premium and some might enhance the sum insured. We also need to have a look at what is more suitable to us. Although a reducing premium looks tempting, I would also suggest considering a higher sum insured given that our age would also be increasing and thereby the need for a bigger sum insured.
6. Check for Cashless Facility
This is probably one of the most controversial features of health plans in the last few months. Now that the nationalised insurance companies have restricted the cashless facility to a few hospitals, private insurers are still offering cashless facilities at their network hospitals. While checking for cashless, we would be choosing the widest network of hospitals and also see if the nearest hospital from our place appears in the list. Even if they have a wide network and we can’t find a network hospital in our vicinity, the plan might be useless for us.
7. Check for In-Patient and Out-Patient Benefits
Health plans have started coming in multiple variants. Some of them just offer in-patient benefits (claims arising due to 24 Hour hospitalisation) while other also cover us for out-patient benefits (Consultation, Pharmacy Bills, Diagnostic Tests etc). Also, some plans come with a complimentary (though it is not actually complimentary) annual health check-up. This health check-up works out to be a good feature as it helps in early detection of any irregularities in the body.
The flipside could be, the in-patient + out-patient combo plans are relatively expensive than the plain in-patient plans. Thus, the out-patient benefits could be evaluated and then compared to see which one suits our needs better.
8. Check for Lifetime Renewals
As you are reading this blog, there is a high chance of you being well under 60 and can thus get a good health cover today. But this won’t be the story once you cross 60. You may either not get a health cover, or you would get it with a compulsory Co-Pay feature. So just make sure, you buy health insurance at an early age and then never think of discontinuing it. There are few companies who offer lifetime renewals of health covers. They would come really handy to you when you cross 60 and would be in greater need of health insurance.
9. Go For Medical Tests before buying
Our advisor might sound to be our well-wisher when he advises us to give a clean health declaration and prevents us from the “trouble” of going for a medical test. But I would sincerely advise you to go in for a medical test (even if it involves some cost) before buying a health insurance. This would reduce the chances of denial of claim by the company under the excuse of, any material health issues being “hidden” from them.
10. Check for Hassle Free Processes
Last, but not the least, this point would be amongst the chief factors to decide a plan. Check if the processes to settle claims are hassle free. Specialist health insurers could be a better choice as compared to general insurers as far as the claim related hassles are concerned. “No-TPA” models can act as a double edged sword. Thus, make sure your advisor provides you service for claim settlement as well.
In a Nutshell …..
Buying insurance after doing a thorough study of above points might not be a cakewalk; but trust me friends, it would be worth it. Going merely by, what one company tele-caller / salesperson convinces us about, might not be a good idea. Also check if the person advising has the complete boutique of companies and products with him and also has thorough knowledge about them.
Lastly, I would like to re-iterate, buy health insurance with an intention of not needing to use it. Remember, its an insurance to cover our financial losses, not to give us returns. So, lets take good care of our health and be happy with the tax saved (u/s 80D). And let the Sum insured become bigger and bigger with the no-claim bonus, so that it could be used when we grow old.
We look forward to your feedback and comments on the above article. Please feel free to contact us on firstname.lastname@example.org if you have any questions.
(The views mentioned in the article are personal opinion of the author. The readers are advised to use their own judgement and consult their investment advisor before making any investment decisions.)