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19 things to consider before buying health insurance

Team AckoNov 8, 2024

Health insurance is one of the best solutions to cope with the expenses of medical issues. But people may avoid buying health insurance unless they need financial backup for medical treatment. Instead of buying insurance at the last minute, be prepared with adequate coverage to ensure a smooth sail through the medical emergency. Let us help you get started with health insurance before a medical contingency hits. Here are things to consider before buying health insurance.

Contents

Which things to consider before buying health insurance?

A health insurance document is a contract between you and the insurance company. Here, the insurer is agreeing to bear a part of your financial burden when you face a medical emergency. Thus, it is important that you choose a health insurance plan and the company wisely.

Inclusions and exclusions of the plan

The coverage of the health insurance plan (inclusions) and the conditions against which a claim cannot be made (exclusions) determine the scope of the policy. You must have total clarity about both before purchasing health insurance. Being unaware of the coverages can lead to an increase in out-of-pocket expenses. And being unaware of the exclusions can lead to claim rejection.

Opting for health insurance at the earliest

Buying health insurance early in your life is good. You don’t want to go scouting for ideal health policies when you have crossed a certain age. It is likely that you will make fewer claims now as compared to when you are older. Remember that now is the right time to buy health insurance if you have not done so yet.

Choosing the right health insurance company

The insurance company plays an important part when it comes to health insurance. The speed of the claim processing varies from insurer to insurer, and thus you must select only the best one. Thanks to the internet, nowadays, it is easy to go online and search for a reliable health insurance company. Go through their customer reviews to know more about the services offered.

The waiting period

The waiting period is the time when you cannot raise a claim against the health insurance plan. It is usually applicable to pre-existing diseases and maternity benefits. It can stretch from 9 months to a few years, depending upon the insurance company and the plan that you are looking to purchase. Do check the applicable waiting period on your health insurance plan before buying.

Policy premium and sum insured

You pay premium to purchase a health insurance policy with a certain coverage. The higher and more comprehensive the coverage, the higher the premium amount. Understand the details pertaining to the coverage and the premium amount thoroughly while buying health policies.

Day care procedures

Nowadays, certain medical treatments are completed within a day. Thus, it is important to ensure if such treatments are covered under your health insurance plan. These are small medical procedures like cataracts, tonsillectomy, etc.

Specific treatments and diseases

Medical insurance plans list some specific illnesses and treatments for which coverage is available after a specified duration. For instance, in many plans, coverage for piles, fistula, hernia, etc., is available only after the first 2 policy years. These ailments are called specific diseases. Reach out to the insurance company if you are unsure about this coverage being offered.

Alternative treatments

These are non-allopathic treatments like Ayurveda, Yoga, Unani, Siddha and Homeopathy (AYUSH). Many health plans allow these non-allopathic treatments’ coverage up to a specified limit. AYUSH treatments have gained importance during the COVID-19 pandemic, and many people prefer these over standard allopathic medicines.

Room rent limit on the health insurance plan

A hospital’s room rent may sound like a trivial charge, but it can be exorbitant depending upon the type of hospital. The treatment cost can go high if the patient is admitted to a room that costs more than the allowed limit. The room rent limit in health insurance specifies the maximum room rent coverage allowed under the policy. If the policyholder chooses a hospital room with a higher rent, he would have to proportionately share the load of the entire hospital bill.

Coverage for new-age treatments

These are advanced medical treatments that are more accurate and can result in better outcomes as compared to traditional treatments. Check if your health insurance policy covers such modern procedures. Some examples of new-age treatments are CyberKnife, robotic surgery, and stem cell therapy.

The availability of add-on covers

Add-ons are optional coverages available with health plans for increasing the scope of coverage. You can choose any suitable add-on to customise your health insurance plan. Note that every add-on cover requires an additional premium which is added to the premium of the base policy.

Pre/post-hospitalisation coverage

Pre and post-hospitalisation include any tests, treatment, doctor visits, etc., conducted before or after the hospitalisation. Different insurance companies have different terms and conditions regarding pre and post-hospitalisation. Check if your policy offers this coverage.

The co-payment clause

As per copay clause, the policyholder is bound to pay a predefined percentage amount of the hospital bill. Such policies cost less but also offer less compensation as you have to pay a considerable part of the hospital bill. Make it a point to study this clause in detail if you decide to opt for it.

The abundance of network hospitals

Consider the company’s claim settlement approach before buying a policy. Check if the insurer has a wide network of hospitals where you can avail of cashless treatment. This will allow you to spend much less money during medical treatment.

Group health insurance from the employer

Employer's Health Insurance Policy does not have lifetime validity. It ends with the end of employment. This leaves you and your dependents exposed to financial liabilities in case of a medical emergency. Thus, it is important that you purchase a separate health insurance plan to get comprehensive coverage.

The Age criteria

Age is one of the most important criteria for buying health insurance. The premiums differ based on the age of the individuals. In a family floater plan, the age of the family members (eldest) will determine the premium amount to be paid.

No Claim Bonus/No Claim Discount

NCB refers to the discount the insurance company provides to you for every claim-free year. The discount amount limit is usually set by the insurance provider. The discount is usually given as an increase in the coverage amount.

Coverage for preventive health checkup

Most health insurance policies now cover preventive health checkups. It is important to check if these tests are covered in your policy. Preventive health checkups for cardiovascular diseases, cancer, lifestyle diseases etc. are very high, it’s key to ensure your policy pays for all these checkups.

Claim Process

Understand the claim process beforehand. Find insurance providers who make it easy and fast for claims to be settled.

Things to remember while buying health insurance

Do not hide any critical information from your insurance company.

Declare your medical history correctly while purchasing a health insurance plan.

Go through the policy wordings in detail and get your doubts clarified from the insurance company before you buy the policy.

Choose the most reliable health insurance company.

Select a plan that suits the needs of you and your dependents.

Frequently asked questions

Here are some common questions that you may have after reading the above article. Do get in touch with us in case of more queries by sending an email to [email protected].

What is the difference between cashless and reimbursement claims?

The mode of payment is the main difference between cashless and reimbursement claims. In a cashless claim, the insurance company pays most of the hospital bills during hospitalisation. In a reimbursement claim, the policyholder pays the entire bill and then raises a claim with the insurance company.

What are network and non-network hospitals?

Network hospitals are empanelled or have a tie-up with the insurance company, whereas non-network hospitals do not have a tie-up with them. A network hospital can provide a cashless claim, whereas the policyholder will have to follow the reimbursement claim process if admitted to a non-network hospital.

What is meant by the No Claim Bonus?

Medical insurance plans are usually annual policies. Health insurance companies offer a No Claim Bonus if there has been no claim during the policy period. This bonus is allowed as an increase in the sum insured or a premium discount, depending on the plan’s features.

How is room rent calculated in health insurance?

The room rent is calculated as per the principle of Proportionate Deductions. The insurance company bears the hospital bill after applying this formula.

Proportionate Deductions = Room Rent Allowed / Actual Room Rent * 100

Thus, your entire hospital bill gets affected if you opt for a room that costs more than the allowed room rent limit.

What is the Maternity Benefit Add-on?

Some insurance companies do not offer maternity benefits as a part of the base plan. The policyholder can choose to opt-in and buy the additional coverage for maternity expenses. This additional coverage is called the Maternity Benefit Add-on.

Disclaimer: *Except for exclusions like maternity benefits, undisclosed diseases, etc. Please check policy wordings for more details.

**The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.