With the improvement of technology and latest machinery in the medical world, the cost of hospitalization or even OPD expenses are very high and makes a dent in our budget. Even the medicines costs have increased by the day. Hence having adequate family floater or individual health insurance is an absolutely critical aspect of your financial plan. A single medical emergency can push your Financial Planning back by several years.
Unfortunately, very few of us make the effort to actually understand the features of our Health Insurance plans before making an informed decision. Here’s a list of a few important things you need to learn about the Health Insurance Policy you’re about to sign up for.
A pre-existing condition is a health problem that existed before you applied for your health insurance policy. Examples include heart disease, high blood pressure, asthma or even something as minor as a previous accidental injury. Check with your health insurance plan provider for their list of pre-existing conditions, as they wouldn’t be covered for 48 months after you purchase the first policy.
What is it going to cost you?
While browsing for the best Health Insurance plans for your family, you may notice that there are significant price differentials between policies of different companies, offering the exact same coverage. This could be an outcome of differences in underwriting processes or even brokerage structures, but in case the features are more or less the same, why should you pay more?
In case of young families where the eldest member is under 40, it may make sense to take a family floater plan rather than individual insurance plan. After evaluating what’s best for your unique situation, check the difference between taking one family floater plan of say 20 Lacs, versus four individual plans of 5 Lacs each.
Though you may have purchased a policy with a cover of Rs. 5 Lacs, your insurer may have incorporated a feature called ‘disease wise capping’ which might restrict the maximum payout for a specific set of illnesses to say, 1 Lac. Make sure you know which ones these are. The higher the cap, the better it is for you.
The waiting period for preexisting conditions is usually four years. In addition, many policies will incorporate an additional ‘waiting period’ for specific diseases (for instance, cataract). Needless to say, it’s best if this waiting period clause doesn’t exist in the policy you’re about to purchase. In the event that it does exist, it’s best if the waiting period is extremely short.
Many health insurers will issue ‘sub limits’ on things like lodging, thereby capping the proportion of expenses payable towards it. Make sure yours doesn’t.
Some Health Plans will mandate that the policyholder bears a percentage of the total expenses. This feature is known as ‘co-pay’, and is a clear disadvantage. Make sure yours doesn’t require a co-payment. If it does – it’s best that it isn’t more than 10%.
Claim settlement ratio
We saved the best for last! It’s vital to know what percentage of claims for a particular policy gets declined and what percentage goes through. Needless to say, a high claim settlement ratio is preferred. You should look for a ratio of at least 90 to 95%. Anything less than 80% is a no-go.
All Health Policies do not cover expenses related to maternity. Check back to see if yours does. Some policies may cover maternity, but with a pre-specified waiting period.
Medical Check-Up Facility
Some Health policies have an inbuilt preventive health check facility. This can be very useful for diagnosing lifestyle diseases early on in their cycle.
Check back to see if your Health Insurance policy provides for a fixed sum of money annually for wellness or fitness services such as a gym membership. That’s not a bad feature at all – provided you make use of it regularly.