Things to consider before buying your next health insurance policy

When purchasing health insurance, consider the following mentioned points to ensure that you are getting your money's worth.

Written by Amit Chhabra

Given the disastrous impact of the COVID-19 pandemic, more and more people have started to understand the importance of having a good health insurance plan. The virus has not spared anyone, furthermore, with the rising cost of healthcare services, access to quality medical facilities and hospitalisation costs can be financially challenging.

Thus, investing in an adequate health plan that would provide monetary relief to you and your family has been the need of the hour. Therefore, when purchasing health insurance, consider the following mentioned points to ensure that you are getting your money’s worth.

1. Skyrocketing medical cost

Due to the advancement in medical technology, diseases that were once considered incurable can now be cured. However, this gave rise to high medical costs as well. For example, the exorbitant cost of cancer treatment, including surgery and chemo sessions, frequently exceeds Rs 20-25 lakhs. In addition, the treatment cost of covid-19 for 14-day treatment at a private hospital can run into lakhs.

Considering this, make sure to buy a health plan with adequate coverage so that you can keep yourself and your family financially safe. Furthermore, you need to analyze the future requirements and health concerns of your family. For instance, if any person in your family is suffering from a critical illness or if you’re planning to expand your family etc. These factors therefore should be considered so that you can invest in a health plan which would cover all these requirements and keep you financially protected in the future.

2. Cashless hospitalization

Another important factor you need to consider while buying your next policy is to check if your preferred hospitals are part of their network hospital’s list. You need to make sure that the insurance company has tie-ups with the network hospitals which are easily accessible to you. Also, this should be taken into serious consideration when you are based in a non-metro city.

While receiving treatment from a network hospital, there is no need to worry about making financial arrangements at the last minute. The health insurer pays the hospital bills directly, relieving the Policyholder of the financial burden. Especially if the treatment is unplanned, the primary focus should be on saving time and effort in order to achieve greater and greater efficiency.

3. Exclusion of co-payments and sub-limits

One of the most significant factors while picking up a policy is to take note of clauses like copayments and sub-limits. As per the copayment clause, the insured has to pay some portion of the total hospital bill and the rest is paid by the insurer.

For instance, Mr, Rakesh bought a health insurance policy with a copayment of 10 per cent. Now, while making the claim of Rs 1.5 lakhs for his heart surgery. He had to bear Rs 15,000 i.e 10 per cent of Rs 1.5 lakhs from his own pocket. Further, the remaining 90 per cent was paid by the insurance company. These policies might have lower premiums but, during an emergency, paying even a small amount can be difficult. Thus, investing in a health plan with a no-copayment clause is advisable.

Another clause that needs attention is the sub-limit clause. In case your policy has a sub-limit clause of 50 per cent on knee surgery your sum insured is Rs 5 lakhs, you won’t be able to claim more than Rs 2.5 lakhs because of the co-pay feature. Therefore, it is important to go for a policy without sub-limits feature as these medical procedures can dig a hole in your pocket putting you in a financially difficult situation.

4. Type of health insurance

There are various types of health plans available in the market -individual health plans, family floater plans, critical illness plans, senior citizen plans, etc. However, the two broad categories of health plans include individual and family floater plans. Under an individual health insurance plan, only one person can be covered in each plan. This means, both the health insurance premium, sum insured and additional benefits can only be used by the insured person solely.

On the other hand, in a family floater plan, you and other family members share one plan. This means, the sum insured, premium and benefits have to be shared amongst all the members involved. In addition to that, the coverage amount will keep coming down as and when a member makes any claim. Thus, one should keep in mind their needs and requirements and invest in a plan accordingly.

5. High claim settlement ratio

Claim settlement ratio shows the company’s potential to handle the claims. It is highly recommended to check the claim settlement ratio before investing in your next health insurance policy. This factor will help you determine if the policy you are investing in is an apt choice for you. Having a high claim settlement ratio will ensure that at the time of emergency, you and your dependents don’t have to run from place to place to get the claim settled. The process of the claim settlement ratio should be hassle-free and transparent to the customer.

The author is Head-Health Insurance at Policybazaar.com. Views expressed are that of the author.

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