Top 12 Things to Consider Before Purchasing Health Insurance

Last week we have discussed Why Purchasing Health Insurance is the Right investment and this week also we will understand more about Health Insurance. I am quite sure this article will help you to become a more aware person in terms of selecting the right health insurance for yourself and your family.

There are lots of health insurance plans available by multiple companies in India and selecting the right plan for yourself is a daunting task. Sometimes we ignore purchasing the health insurance while checking the terms and conditions even though we have already made a mind to purchase it. If you are one of those people who are struggling to understand the terminology then don't worry in this article I will help you to understand the terminology in a simple manner.

So we will be understanding the Top 12 things to Consider Before Purchasing Health Insurance.

1. Family Floater or Individual Plan: Family Floater provides an option to purchase single health insurance for your family. An individual can purchase Family Floater for his wife and dependent children (up to 25 years of age), and dependent parents. Family Floater mostly considers the eldest member of the plan while calculating the premium. Let say in a family of three, the age of the father, mother, and child is 36, 35, and 4 years respectively than in this case the age of father which is 36 will be considered for calculating the premium. One can purchase the family floater until his children are dependent or not earning any remuneration, once they start earning they can purchase individual plans for themselves. In Family Floater, the provided sum insured is for all the members of the policy. So if in case one individual utilizes the whole sum insured for that year other members will not be able to claim for the treatment.
2. Sum Insured: Sum Insured is the maximum amount that you can claim for the treatments in a year. In the case of the Family Floater policy, it is the maximum amount that all the members of a policy can claim cumulatively. At the time of purchasing health insurance, one should select the appropriate amount so that it covers the medical expenses for a year. Take your age into account, the younger you are the lower the sum insured you need. Sum Insured also affects the premium you need to pay, more the sum insured more the premium. So select the sum insured wisely otherwise you will need to pay a huge premium and it is not for one year, every year you need to renew as well.
3. Premium: Premium is the amount you need to pay to insurance companies to purchase health insurance. Premium also consists of taxes like GST that you need to pay. Make sure to check the premium without affecting the sum insured and the benefits you are looking for. So if two health insurance companies are providing the same Sum Insured but the first company is asking for a low premium then do consider buying from the first one, but also check other services and benefits it is providing. Sometimes it may happen that a company is providing health insurance at a low premium but services of the company are very poor then in that case there is no use of purchasing health insurance from it.
4. Co-payment: Insurance companies have introduced Co-payment to prevent customers from spending unnecessarily in treatment. Co-payment is the percentage of the amount the customer has to pay at the time of claim and rest will be paid by the insurer. For example, if the Co-payment in health policy is 10% and the customer is claiming ?1,00,000 for treatment then in that case customer will have to pay 10% of the claim which is ?10000 from his pocket. So, while purchasing the health insurance make sure that Co-payment should not be there, or if it is there it should be as less as possible.
5. Waiting Period: Health Insurance policies come with the waiting period for pre-existing diseases and some specified diseases mentioned in the document. Insurance companies will not accept the claims arising out of pre-existing or specified diseases in a waiting period. The waiting period may range from 28 to 48 months depends on the company and plan you are looking for. So, you can compare and choose a plan that comes with a minimum waiting period to be able to claim for such diseases.
6. Network Hospital and Cashless Treatment: Most of the health insurance companies have a tie-up with many hospitals which is termed as Network Hospitals, which would help you to avail cashless treatment in case of a medical emergency. It saves you from tedious paperwork that you need to do while claiming for the amount that you paid for the treatment and also insurer pay the amount directly to the hospital and you don't need to spend from your pocket. While purchasing health insurance do check if the Insurer is providing the Cashless Treatment facility or not and also the number of network hospitals there in the country and the city you are living in. One personal suggestion from my side, even though insurance companies provide the facility of cashless treatment but still keep some emergency amount with yourself, as sometimes insurance companies may reject cashless treatment. It happened with my family while having the treatment for my father, although later they paid the amount when we have claimed.
7. No Claim Bonus (NCB): No Claim Bonus referred to as the increase in Coverage or Sum Insured provided in subsequent renewals by the Insurance company for every claim-free year. For example, if you have purchased health insurance of ?10,00,000 and the insurer offers 10% NCB for every claim-free year up to a maximum of 50%. Then, in that case, in every single claim free year when you renew your policy, your sum insured increases by ?1,00,000 maximum up to ?15,00,000. Also, if you have a claim then they will reduce ?1,00,000 on your sum insured in next renewal but your minimum sum insured can not be reduced less then ?10,00,000. So, while purchasing the health insurance policy make sure that the company is providing sufficient NCB benefits.
8. Claim Process: Go through the policy wordings to understand the health insurance claim process that is followed by the insurance company. A smooth claim procedure is beneficial at the time of settling health claims. You can do some research, read customer reviews online, and select a health insurance provider that is known for its seamless claim settlement services.
9. Free Medical Checkups: You should look for the policy that provided free medical checkups for the insured every year. It will help you to be free minded every year and save yourself from potential diseases.
10. Restoration Benefit: Restoration Benefits will help you to reinstate the sum insured provided in the policy in case you have already utilized it for a particular disease or ailment. You need to understand that your Sum Insured will be restored for other diseases or ailment for which you have not claimed so far in a year. So, while purchasing the health insurance make sure to check if the plan provides the restoration benefit or not.
11. Pre and Post Hospitalization Expenses: Pre and Post Hospitalization are the expenses that you will incur for the consultation, checkup, medicines, etc. before and after hospitalization. For such expenses, you need to claim from the Insurance company. Generally in India, Insurance companies provide Pre and Post Hospitalization of 30 to 120 days before and after the hospitalization. So, while purchasing the health insurance, do check the number of days before and after the hospitalization which is being covered by Insurance companies. One personal advice from my side, make sure to have at least 60 days before and 90 days after the hospitalization in your policy and also keep all the bills for every single medicine you purchase who knows you may need to hospitalize for any disease and if you have bills you may claim for pre and post-hospitalization.
12. Critical Illness: Critical Illness are those diseases for which you might not be able to work for some time until you get proper treatment and also to treat such diseases, you may need to spend lots of money. Generally, most insurance companies cover the Critical Illness but sometimes Sum Insured provided by Health Insurance policy is not enough. Many Insurance Companies provide the additional benefit of covering critical illness by paying the additional premium which will pay you an additional amount when you are diagnosed with such diseases. So you may consider purchasing such add on with your health insurance policy.

I hope all the above points will help you to select a better health insurance plan for yourself and your family. If you have any feedback or anything you want to add, I would love to know. Thanks for reading :-)

Disclaimer: Before making any decision do think twice and if required take the help of a financial advisor, I am not responsible for any loss being occurred to you although I have shared the best of my knowledge.