Things to consider before buying a health insurance policy

A health insurance policy can be considered adequate only if coverage as well benefits are aligned to an individual’s needs. 

Parag Ved, President, and Head of Consumer Lines at Tata AIG General Insurance says, “Scope of health insurance coverage depends on one’s lifestyle, family income, life stage, existing disease (if any), family medical history, etc.”

Here are a few points to consider while analyzing if the existing or potential health insurance cover is apt for you;

Adequate Insured Sum: 

The rapid growth of medical inflation has increased operating costs for the healthcare industry. These are inevitably passed on to patients. 

Ved explains, “Sum insured should be decided considering medical cost in your city of residence existing ailments and the number of family members you wish to cover under the plan. Products with restoration and cumulative bonus should be preferred to take care of extra burden and medical inflation.”

Life stage-specific needs

Industry experts say, depending on one’s life stage, one may choose benefits that suit one’s need, like maternity, child immunization, regular health checkup, outpatient cover, cover on a family floater basis, critical illness cover etc. 

Having said that, a group medical insurance may have cover for these benefits, but be watchful of the sum insured, sub-limits, co-pays or waiting period.

Pre-existing diseases  

Disclose your pre-existing conditions, if any, while buying a policy and always understand the waiting periods, sub-limits or exclusions applicable to these conditions.

Cashless Service 

Be vigilant of the fact that the policy offers cashless service and has a network of hospitals in the vicinity. 

Claims Settlement Ratio

The claim settlement ratio also is an important concept that needs to be understood by a policyholder. Ved explains, “It is the percentage of claims that an insurance provider settles in a year out of the total claims. It acts as an indicator of their credibility.” 

Higher the ratio, the more reliable the insurer is. So, do a basic study before choosing an insurance provider.

Exclusions and Limitations

While buying a policy understand and note diseases or treatments excluded or covered with any sub-limit, co-pay etc. “One must compare the cost of premiums for plans that suit the needs and should know the list of coverage included as a part of the policy. Not being covered for the relevant needs or underinsurance can hit one’s finances,” adds Ved. 

It is always advisable to understand and keep a check on the policy benefits and terms and conditions of your existing as well as a potential health insurance policy that you plan to buy. 

Future Cost of Treatment

It is important to be well-informed about insurance needs. Just having a large cover isn’t the be-all and end-all. 

Ved says, “Policies with a steep increase across age bands would be expensive from a long-term perspective. Medical inflation would mean the cost of a procedure will increase or may double in the next 10 years.” 

Global Cover

Global cover refers to medical expenses that are incurred outside India. Experts say one must understand the cover limits, terms and conditions like proof of diagnosis in India only, etc. You might also need to look at the countries that come under such a plan and the method of payment – is it cashless or on a reimbursement basis.

Cost 

Lastly, compare not just benefits but also the cost being charged for the same. “As a health policy is a lifelong renewable, one should also compare the different plans available along with their premiums,” points out Ved.