Buying Health Insurance, confused ? check out the important aspects

Buying a Health Insurance has been a tough task for people all over the world .. even in developed countries like the USA where literacy and awareness levels are much higher, people are generally confused on what is the need, what is the availability and what to watch out for in an Insurance Policy. 

In India, though limited in scope, we have varied designs of the Health Products which requires assistance and explanation to end customers. 

Below given are some points to be considered and some rules to be definitely followed while buying Health Insurance 

Start Early - Don't wait for a Chronic illness to strike and then look for a cover .. no one wants defective peace from day one isn't it !? Rude but true! 


Type of Policy - there are generally following 2 types of covers

• Indemnity Policies - these policies have over all Sum Insured limits and pays for the amount spent on cost of treatment. In India, you find these with most of the General Insurance companies

        

• Benefit Policies - these policies have the fixed amount per illness and a over all Sum Insured. In case of hospitalization for a covered illness, fixed amount is paid irrespective of the treatment cost.

It is recommended to have a indemnity Policy in place first 

How much Coverage - with Medical costs soaring year on year, it is recommended to have Sum Insured between 10 lacs to 25 lacs at least depending upon your life style, location and choice of hospital in case of emergency. Today a normal hospitalization in good hospital ranges anywhere between 80,000 to 150,000 for Insurance patients and if illness is chronic or severe then costs run beyond 500,000 easily.  

For high limits, You can buy a base Policy and add super top up cover to that. it is cheaper to buy base cover + Super top up rather than buying one big Sum Insured Policy. 

Super top up policies do not cover certain base amount and trigger only when expenses cross a specified threshold limits. Make sure not to confuse Super top up cover with top up cover. 

Coverage

This is the most confusing task for a non insurance person to understand what is covered and not covered under the Policy. 

In India, most of the Policies follow the order in manner given below. Below given are the ones which should be carefully examined while making a purchase.

Hospitalization expenses - must be covered upto Sum Insured. If there are any diseases specific limits - it will charge you less premium comparatively however policies with sub limits should be avoided 

Room Rent/ICU limits - these are capped in some policies in return for a reduced premium however policies which such limits should be avoided. Policy ideally should be without any room rent/ICU cap. 

Maternity coverage - check for the waiting period. Claims are payable upto certain limits only and not upto the main Sum Insured. if the limits are below 50,000 it is of no use as most of the hospitals charge more than 50,000 for delivery. Also note that your new born will also be covered with in this limit only. Babies are generally added in the Policies after 90 days only.

Pre-existing diseases (PED) - trickiest of all ! - As mentioned above, Policy should be purchased when one is hail and hearty .. in that scenario, there is no need to worry about PED. In India Policies do not cover hospitalization triggered due to PED for 1 to 4 years depending on the Product. One should carefully watch no. of years for this exclusion while making a comparison.

Cumulative Bonus - This is a bonus Sum Insured which is added in the Policy if you have not made any claim. if the Claim is made, it is reduced by the same amount it accrued. it doesn't affect the basic Sum Insured 

There are lot of other coverage like Hospital cash, health check up etc which are simple in nature. 

One should definitely look out of Critical illness rider in optional coverage. This rider doubles the Sum Insured in case person is detected with one of the listed critical illness like Cancer, Kidney failure, multiple sclerosis. 

What is excluded 

List of around 30 to 40 exclusions can be found in a Health Insurance Policy. Key ones as given below. One should carefully go through the whole list.

• Pre existing diseases upto some number of years as per your chosen product. maximum being 4 years
• There will be waiting period of at least 2 years before you can claim for illness like Hernia, knee joint replacement, Varicose veins and some others.
• Circumcision, birth control procedure, Cosmetic treatments, OPD expenses (unless specifically covered) 
• HIV and related treatment 
• Weight loss or obesity related procedure, treatment of mental illness, etc

Know your rights

There are some Customer centric regulations which are applicable across all companies in India

• If you don't like, You can cancel your Policy with in 15 days of receipt and get the premium refund.
• Your Policy is renewable for life time 
• Insurance company can not charge additional loading at renewal 
• There is a grace period of 30 days for renewal and Your Policy can be renewed with continuity if premium is paid with in 30 days of due date 
• You get tax exemption under section 80D upto Premium amount paid 

Important Rules

While buying any type of Insurance, some rules you should always always always follow

• Fill up your own proposal form. Do not make anybody else fill it and regret it later. At the time of Claim, your intermediary might not be able to help 
• Answer all the questions truthfully. Do not make false declarations. In case of any PED, declare them right away or you may have to regret later 
• If the Product you have chosen requires you to go for Health check up, go and do so 
• Don't forget to add your newly married spouse or new born asap. 
• Renew/Pay your premium in time. In case of break, your PED count down starts afresh which you may not want 
• There are many sites giving comparisons of the Product which can be referred
• it is better to stick to one insurance company instead of transferring your policy every year to a new Insurance company. of course not in case if you had a very bad experience. 

Disclaimer - The information and views given above are my personal.