6 Things You Must Know Before Buying a Health Insurance Policy

Introduction

In today's unpredictable world, health insurance has become more of a necessity than a luxury. With rising healthcare costs and the growing prevalence of lifestyle-related illnesses, securing adequate health insurance coverage is crucial. A good policy can protect you and your family from financial stress during medical emergencies. However, selecting the best health insurance plan can be challenging due to the variety of options available in the market.

Before you purchase a health insurance policy, here are a few critical things you need to know to make an informed decision and maximise the benefits.

6 Things You Need to Know Before Purchasing a Health Insurance Plan

1. Understand Your Health Insurance Needs

The first step in purchasing health insurance is understanding your specific needs. Health insurance is not a one-size-fits-all product. Each individual or family has unique medical and financial needs, which means the right plan for you might not be the same as for someone else.

• Individual or Family: If you're young and single, an individual plan with a basic sum insured might be sufficient. However, if you have a family, a family floater plan may be a better option, as it covers all family members under one policy.
• Medical History: Consider your medical history and any pre-existing conditions. If you or any family members have a history of chronic illnesses, you may need a plan with a higher sum insured and coverage for specific treatments.
• Age and Dependents: The age of the policyholder and dependents plays a vital role in choosing the right plan. Older individuals may require more comprehensive coverage due to the higher likelihood of medical issues, while younger people can opt for plans with lower premiums and higher deductibles.

Taking the time to evaluate these factors will help you select a plan that provides the appropriate coverage and avoids unnecessary expenses.

2. Look for Adequate Sum Insured

The sum insured is the maximum amount that the insurer will pay in the event of a claim. This amount is crucial, as it determines the extent of your coverage. Inadequate coverage can leave you financially vulnerable, while too much coverage may result in unnecessarily high premiums.

When choosing the sum insured, consider the following factors:

• Location: Healthcare costs in metropolitan cities tend to be higher compared to smaller towns or rural areas. A ₹5 lakh sum insured may suffice in smaller cities, but you might need ₹10-15 lakhs for metro areas.
• Family Size: If you're opting for a family floater plan, ensure the sum insured is enough to cover multiple family members, especially in the event of simultaneous or multiple hospitalizations.
• Lifestyle and Risk Factors: Take into account lifestyle factors such as smoking, alcohol consumption, and pre-existing conditions, which may increase the likelihood of hospitalisation and, therefore, the need for higher coverage.

Ensure that the sum insured is adequate to cover major medical expenses like surgeries, critical illnesses, and long-term treatments.

3. Understand the Waiting Period Clause

Health insurance policies come with a waiting period for certain benefits, particularly for pre-existing diseases, maternity coverage, and certain specific treatments. During this period, the policyholder cannot claim those particular conditions.

There are different types of waiting periods you should be aware of:

• Initial Waiting Period: Most policies have an initial waiting period of 30 to 90 days, during which no claims (except for accidental hospitalisation) are covered.
• Pre-existing Diseases Waiting Period: If you have any pre-existing conditions like diabetes or hypertension, you may have to wait for 2-4 years before your insurance covers any treatment related to these conditions.
• Maternity Waiting Period: Maternity benefits often come with a waiting period of 2-4 years. If you are planning to start a family soon, choose a policy with a shorter waiting period for maternity benefits.

Understanding the waiting period is essential to avoid claim rejections, especially if you are purchasing health insurance to cover specific medical conditions.

4. Check Network Hospitals and Cashless Facilities

One of the key advantages of health insurance is the cashless hospitalisation facility, where the insurer directly settles the hospital bills. This feature saves you from paying out-of-pocket and then waiting for reimbursement. However, this service is only available at hospitals within the insurer's network.

Before buying a health insurance plan, verify the insurer's network hospitals in your area. Ensure that these hospitals are reputable and easily accessible in case of emergencies. It's also beneficial to check if the insurance company has tie-ups with top-tier hospitals for specialised treatments.

A strong network of hospitals and cashless facilities can make a huge difference during emergencies by simplifying the claim process and ensuring quicker access to medical care.

5. Understand the Inclusions and Exclusions

All health insurance policies have certain inclusions (what they cover) and exclusions (what they don't cover). Understanding these can help you avoid unpleasant surprises at the time of filing a claim.

Some common inclusions are:

• In-patient hospitalisation
• Pre- and post-hospitalization expenses
• Daycare procedures (surgeries or treatments that do not require 24-hour hospitalisation)
• Ambulance charges

Exclusions, on the other hand, typically include:

• Pre-existing diseases (until the waiting period is over)
• Certain critical illnesses or treatments
• Cosmetic or elective surgeries (e.g., plastic surgery, dental treatments)
• Treatment for drug and alcohol abuse

Always read the policy document carefully to understand the full list of inclusions and exclusions, and choose a plan that offers comprehensive coverage tailored to your needs.

6. Review the Claim Settlement Ratio (CSR)

The Claim Settlement Ratio (CSR) is an important indicator of an insurance company's reliability. It refers to the percentage of claims settled by the insurer compared to the total claims received in a financial year.

A high CSR (above 95%) reflects the insurer's efficiency in settling claims and provides reassurance that your claims are more likely to be honoured without unnecessary delays or hassles. Before purchasing a health insurance policy, review the insurer's CSR and check online reviews to gauge customer satisfaction.

Additionally, consider the claim process itself. Look for an insurer that offers a smooth, hassle-free claim process with minimal documentation and quick turnaround times.

Conclusion

Purchasing a health insurance policy is a crucial decision that requires careful consideration. By understanding your specific needs, ensuring adequate coverage, being aware of the waiting period, checking the network hospitals, reviewing inclusions and exclusions, and evaluating the insurer's claim settlement ratio, you can make an informed choice. The right health insurance plan will not only provide financial security but also peace of mind during challenging times.

Always remember to review the policy document in detail, ask questions, and seek advice if needed. With a well-chosen health insurance policy, you can rest assured that your health and finances are adequately protected.