Health Insurance Checklist

Tip #1: Check for sub-limits

Sub-limits in your policy can reduce the total claim amount proportionately. For example, if you have a health plan of 5 lakhs with a 1% room rent sub-limit. It means that your claim amount would be paid only up to 5K. So, if you stay in a room of 7.5K, you would have to pay the additional 2.5K per day. Also, all other charges, like doctors fee, surgery cost, etc. would also be reduced proportionately.

So, health plans with Sub-Limits could be cheaper, but they would be more expensive at the time of claim!

Pro Tip: Opt for plans without sub-limits

Tip #2: Compare apples to apples and not apples to oranges

All health plans that you see do not have the same benefit. So, a premium is not the only determinant factor while choosing a health plan. For example, if you are planning to have a family soon, you must have maternity coverage.

Pro Tip: Plans without these fringe benefits would be cheaper, but avoidable.

Tip #3: Waiting Period

Most plans have 2 years a waiting period for illnesses like gall bladder stone, angioplasty, etc. and a 4 years waiting period for pre-existing illnesses. If you have any illness BEFORE the plan begins like hypertension, diabetes, etc. you need to look for plans which offer coverage for these critical treatments as early as possible. In fact, some plans do not provide pre-existing illness coverage and can permanently exclude it.

Pro Tip: If you do not have any PED, then cool. Don’t worry. But if do, opt for a plan with the least waiting period!

Tip #4: Co-payment

Some plans have a co-pay clause of say 10% and reduce the overall premium. It means even if you have a 1 lakh claim for a 5 lakh plan, you will still have to pay 10%, i.e. 10k from your pocket even if the total amount is way lesser than the coverage amount. Now imagine how much you need to pay for a 5 lakh claim! Co-pay usually exists for pre-existing illnesses, higher age or treatment at a more expensive location.

Pro Tip: Co-pay makes the plan cheaper but turns out to be super bad when you make a claim! So, avoid!!

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Tip #5: Right Policy Type

Choosing the right type of HI for your family is of utmost importance. Indemnity health insurance plan, i.e. a health plan which pays the cost of hospitalisation, on actuals, + Critical Illness coverage + Personal Accident Coverage is your ideal coverage. This could be in 1 or more plans.

Pro Tip: If you cannot buy all the plans at the same time, you can always keep taking different plans at different points in time to increase your coverage!

Tip #6: Ideal Sum Insured Thumb Rule

Health Insurance coverage = 50% of your Annual Income + Last 3 years’ Hospitalisation expenses

For example, if your Annual Income is 10 lakhs and in the last 3 years you have spent approx 2 lakhs (total) in the hospital, then your Ideal Health Insurance coverage should be 5 + 2 = 7 lakhs (minimum).

Pro Tip: With the rise in income, your health insurance coverage should also rise!