Tanvi has been a full-time personal finance journalist and now leads a multi-faceted existence as a wife & mum, and now a Certified Financial Planner and wine sommelier.

Health Insurance: Checklist before buying a policy

How many boxes can you tick before buying that health insurance policy?

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It is clear that a health insurance policy is the first and most important policy you need to buy as soon as you start working.
Any medical illness or a disease can cause huge financial loss for you and in turn, your family.
First, your earnings would stop and then, you would have to foot the medical bills.

Why not play it safe and let the health insurance company take care of the latter?

There is no ball park figure on the amount of insurance you must take; it would depend on you and your family’s medical history. According to Sanjay Datta, Chief Underwriting & Claims at ICICI Lombard General Insurance Company, earlier the average sum insured for a health insurance policy was about Rs 2 lakh to Rs 3 lakhs, now, people even opt for coverage beyond Rs 5 lakhs. However, there is a certain norm on what you should look at before buying a policy.

Is it well networked?
Health insurance companies provide you with a list of network hospitals, it may be wise to check if there are those that you often visit and if they are in your vicinity. It is also an important factor to consider if you travel or move cities, because your health insurance should travel with you. Further, cashless facilities can only be availed in network hospitals.

Does it cover day care procedures?
Most health insurance plans do not cover day-care procedures; hospitalisation of 24 hours is a must in most cases. Owing to the advancement in technology, a large number of procedures today do not require you to get admitted into the hospital. Hence, it may be worth your while to research which plans cover the maximum number of day-care procedures.

How efficient are their claims process?
There are two numbers that matter here. One is the claim settlement time, which is the number of days the insurance company takes to settle the claim. The other is the claim settlement ratio, which is a ratio of the number of claims the insurance company settles to the number of claims it receives. So if a company receives 100 claims and settles 98, the ratio is 98%. Clearly, a higher settlement ratio and faster settlement time is a good indicator of the efficiency and genuineness of the insurance provider.

What is the policy on no claim bonus?
A large number of insurance companies offer a no claim bonus in case you, as a policy holder do not lodge any claim. In such a case, either the sum insured increases or the premium decreases, or both. It may be wise to check on this clause so that it brings some addition to your health plan.

What is the plan’s renewal policy?
The renewal age or limit is the age till which you can keep renewing your policy by paying the required premium. This age varies from insurer to insurer, so it makes sense to opt for the ones that consider your needs and requirements. A health insurance policy that can be renewed lifelong, therefore, it doesn’t have any age limit for the renewal would be preferred. 

Does the plan cover any pre-existing diseases?
These are diseases which you may be suffering from before opting for a health insurance plan, and hence insurers do not cover them from day 1 of your policy. However, there is a waiting period, typically 2 to 4 years, after which they might cover pre-existing diseases. Therefore, look for plans that cover your existing disease and have the least number of years of waiting period.

What about co-payment?
A co-payment clause requires you to pay or share the costs of the claim amount, which is typically expressed as a percentage of the admissible claim amount, which the insurer states that you must bear. To save yourself the financial drain, ideally look for a plan that does not include or has the minimal co-payment clause at any stage.

The number of critical illnesses and surgical procedures covered.
If you have a family history of certain diseases, it makes more sense for you to choose a plan that covers the maximum number of critical illnesses.  For instance, certain health plans cover as many as 30 critical illnesses and over 80 surgical procedures. Payment towards illness is disbursed regardless of actual medical expenses. Ideally buy a policy that provides you with a comprehensive coverage.

If you haven’t got a health insurance policy as yet, what are you waiting for? Go get one now.

Disclaimer: The views and opinions expressed in this article are for informational purposes only. The authors and publishers are not responsible or liable in any manner for any actions you might take relying on the contents of this article.


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