The decision to go for health insurance is usually something most of us are not willing to do until it is too late. Choosing the right insurance to safeguard your health can be challenging and confusing at the same time. Health insurance is still not seen as a priority unless we need the policy to save on taxes.
Even if you and your loved ones are in perfect health, your health insurance should play a critical role in your financial planning. If you were to get sick and in need of treatment and hospitalization, not having an insurance plan, could dent your pocket significantly. A good health insurance plan can reduce the financial blow that is associated with doctor’s visits, tests, medicines, and other procedures.
The escalating cost of healthcare is just one of the reasons why health insurance is important. Your health insurance also covers medical Inflation as healthcare is likely to become more expensive in the future and ensures cashless treatments, especially in an emergency situation, where you may be strapped for funds or resources.
Another common misconception is that health insurance should be purchased when you are older since the possibility of falling ill is higher. Nothing could be further away from the truth. The regulations in India have ensured an extremely customer friendly construct for the product and therefore buying it young, makes an immense sense. You can not only start your health insurance at a very affordable premium, but you are also guaranteed renewability for life. This means that an insurance company cannot refuse to renew a policy once issued, irrespective of any number of claims made. Further, most policies will have waiting periods for specific types of claims so, if you start early, by the time you really need those facilities, all the wait periods are over.
However, choosing the best health insurance policy for your or your family’s health is a decision that cannot be taken lightly or in haste. There are several things you must consider when opting for a comprehensive health insurance policy. Here are some pointers to get you started –
The comprehensiveness of cover – You should choose a policy that covers not just hospitalization but also allied medical costs including outpatient treatments and check-ups. Also, select the amount of coverage or ‘Sum Insured’ carefully keeping in mind the cost of today’s medical treatments or about an average cost of hospitalization.
Consider what is included – When opting for a health insurance policy, remember to check what all are included in the policy, there are many procedures that do not require hospitalization, so the number of daycare procedures included should be important. Depending on your life stage, you may also need some specific benefits as maternity included.
Sub-limits – Some policies will have sub-limits on the room rents, you should consider if these fit your requirements in terms of the type of room and kind of hospital you might go to. Some policies may also have procedure wise sub-limits, it is advisable to be mindful of that. Policies without sub-limits are likely to be more expensive and that is a choice that should be made with careful consideration.
Hospitals network - Check for network of hospitals available under the policy that provide cashless facility and how close they are to your neighbourhood. Global hospital networks in case you travel frequently.
Co-pay - Most health policies have a voluntary co-pay clause. This means that you can choose to reduce your premium at the time of purchasing the policy by offering to pay a fixed percentage of whatever claims have been made throughout the year. If you wish to co-pay, you can select the percentage you would like to commit to the right at the start.
Waiting periods - Different policies have different waiting periods outlined. The waiting period is basically a defined time span during which claims are not entertained. Generally, if the claim is related to a pre-existing illness, the waiting period is likely to be longer. When looking for a policy, try to find one that has the least possible waiting period.
Critical illness cover – It is an unfortunate fact that the incidence of illnesses like cancer is increasing. So it is always advisable to choose a health policy that could help cover easily the areas. However, this comes with a cost and you need to make the decision based on its affordability.
No claim bonus – Most insurance providers will provide you with something known as a cumulative or loyalty benefit. Essentially, if you do not make a claim during a policy year, they will consider a discount on your insurance premium for the following year. Alternatively, they may also offer you a higher sum insured without increasing your premium. Always choose which benefit wisely.
Premium – Generally, the premium that you pay will depend on factors such as the amount of cover you have opted for, your age, your medical history, and the type of plan you have picked. Given the competition in the market, you should be able to find yourself a provider who will offer you exactly what you are looking for at the best possible rate. However, this should not be the primary decision making factor.
This is a list that should help you do your homework based on what your needs are and then invest in a health insurance plan that is comprehensive and best suited for your family and you. While you may seek recommendations from friends and family, make the choice consciously, keeping in mind, what your needs are and what services you expect.
At the same time, while it is advisable to not make this decision in a hurry, I would recommend that you do not wait too long either. Often, customers wait just a tad bit too long for their perfect health insurance plan and gradually miss out on buying the health insurance. As a thumb rule, any plan that matches around 75 per cent of your requirements is the plan you should go for.
Finally, while health insurance will always act as an effective fall back for medical expenses, it is equally important that we take steps to prevent illness by focusing on nutrition, exercise, and sleep. While the financial expense of a medical emergency can be covered by insurance, emotional expense will still take its toll.
After all, prevention is better than cure!
The author is the ED and CEO of Edelweiss General Insurance