Don’t Let Premium Decide Your Health Insurance

Just recently I came across with one of my old friend and while talking he has told me about the mediclaim policy he has purchased. He told me that it is very cheap and providing high coverage without knowing the other sub limits which is inbuilt in the policy. While talking I asked him about the various ifs and buts of the policy, I found that he is unaware about all the pros and cons. He has just bought it with an attraction of cheap premium. After that I told him that policies with lowest premium or with a basket of benefits will not be always the best option for you.

When it comes to selecting a health insurance policy, buyers often forget to keep the crucial facts in mind. So, here is the check list you need to tick before you buy health insurance.

Your Requirement: The type of your policy which you need may not be the same as of your neighbour or friend. Your policy should be determine by your family’s need. The number of family members and their age is very crucial in identifying a policy. For instance, a young family of four can do with a basic cover of Rs. 5 lakhs while a family with senior citizen should opt for a large floater cover. If the parents are too old then it is prudent to have a seperate cover for them an do not include them in a floater plan. Then you need to be careful while calculating premium which one is cheper viz a viz benefits. You also need to be careful while taking a maternity cover. If you are planning to have a baby within a year or two then you have to check the waiting period for enjoying the maternity benefit. Mostly the policy which provides the maternity cover with a long waiting period and almost doubles the policy premium.

Limitations and Exclusions: Once you have the short listed the policy base on your family, go through the fine print to understand the limitation and exclusion of plans. Most of the basic plans carry sub limits of room rent cover of 1% and specific treatment for the ailments which are now treated under package deal in the hospitals. For instance, bypass surgery of heart are done in a package model of normal, delux and super delux. So you have to find out that your chosen policy provides which package model for different ailments. However, if you prefer to high end hospitals with better rooms, then plans with room rent sub limit will not work for you. All other expenses are also linked with the room rent eligibility. If you prefer high end hospitals then other expenses which are linked with room rent may not be eligible for the claim. So you have to understand minutely the limitations and exclusion which are inbuilt in the policy.

Premiums and Plans: One should neither focus on buying the cheapest policy or a policy which offers a plethora of benefits. The emphasis should simply be on whether a policy fulfils your requirements. Several health insurance have come out with premium variants that offers services of doctor’s second opinion, vaccination cover for new born baby, wellness benefits etc. Paying higher premium for the other benefits which you may never use is not advisable. Some insurers have also come out with the international cover benefit also. So check the extention of international cover benefits they are providing . And it is not also advisable to buy high end coverage for availing tax benefits.

Cashless Hospital Network: According to the Insurance Regulatory and Development authority of India, the average claim payout in case of reimbursement settlement is just half that of cashless claim disbursal for the same ailment category. You must find out an insurer’s network hospitals that offer cashless claim settlement. The information is usually available on the insurer’s website. Taking the reimbursement route could strain your finance and in extreme case, even impact the quality of treatment you choose. Opting for the cashless facility also saves you the trouble of collating all the documents, submitting them to insurer and following it up.

Insurer’s Track Record: An insurer’s experience, financial strength and service erecord is also crucial. An insurer with lower claim settlement ratio may spell troble. If possible you also need to take account the solvency margins- an ionsurer’s ability to pay out claims- and premium growth registered by insurer The number of years an insurance company is in business is also worth considering. Its expertise in business will be reflected in the types of policies. An insurance with a wide range of products may be a better choice.

Know More: SEBI Registered Investment Advisor l Insurance Planning l Planning for Early Retirement