Beginner's Guide to Purchasing Health Insurance

Beginner's Guide to Purchasing Health Insurance

Health insurance policy is like a safety net for your health.

Think about it this way: imagine you're walking on a tightrope high above the ground. You don't know when you might slip and fall, but if you have a safety net, you'll be protected if it does happen. A health insurance policy is like that safety net for your health.

Imagine you have a health insurance policy that covers doctor visits, hospital stays, and prescription drugs. If you get a cold and need to see a doctor, your insurance policy will help cover the cost of the visit. If your cold ends up being pneumonia and you end up needing to be hospitalized, your insurance will help pay for the hospital stay and any treatment you receive. And if you need medication, your insurance will also help cover the cost of your prescription drugs.

Let's explore some additional benefits that come with health insurance

What are the benefits of Health Insurance?

Having health insurance offers more than just peace of mind, it can provide financial protection during unexpected health events. Here are some benefits of having health insurance:

1. Covering Hospitalization Costs : Your health insurance policy can help you pay for hospital stays related to illnesses or injuries, even those that may require immediate attention. Reputable insurance companies often cover costs associated with:

2. Treating Critical Illnesses: Some insurance companies will pay for all medical expenses, including hospitalization, diagnoses, and medications, for the treatment of acute diseases like cancer, heart attacks etc..

3. Hospitalization for Accidents and Diseases: These costs include medical expenses incurred during hospitalization for illnesses or unexpected injuries, and some insurance companies offer to pay the entire amount or more. Having these expenses covered offers significant security in case of unforeseen health events.

Checklist to buy insurance policies:

We believe you have understood that health insurance is a critical component for protecting your financial well-being and ensuring you have access to quality healthcare when you need it. With so many options and variables to consider, buying a health insurance policy can seem overwhelming. But with a clear understanding of what you need and what you're looking for, the process can be manageable. To help make the process easier, we've created a comprehensive checklist for buying health insurance policies. This checklist will cover all the essential elements to consider and help you make an informed decision when choosing a policy that meets your unique needs and budget. Whether you're a first-time buyer or are looking to switch policies, this checklist will ensure you don't miss any important details.

1. No Claim Bonus

How happy would you be if the insurance company told you that they will increase your cover if you stay healthy and don't make any claims? No claim bonus is an insurer's way of rewarding you for not making any claim.

For example, let's say if your insurer promises to increase your cover by 50% each year, above the original sum insured, if you don't make any claims. For instance, starting with a coverage of ₹5 lakhs, the next year it could increase to ₹7.5 lakhs, and then to ₹10 lakhs the following year. The No Claim Bonus is a good feature, but make sure it is substantial, with a minimum of 10% increase to be meaningful.

2. Restoration Benefit

Have you ever been in a situation where you've exhausted all of your health insurance coverage and still needed medical attention? That's where restoration benefits come in! Some insurance policies offer unlimited restoration for any illness, while others have restrictions. For example, let's say you have a health insurance of 5 lakhs and you spend the entire amount on hospitalization. If you suddenly need medical attention again after three months and the bill comes to 3 lakhs, your original health plan won't cover it. But, if you have a restoration benefit, your insurance company will automatically refill your coverage back to 5 lakhs, giving you the chance to make a claim again within the same policy year. Just be aware, some policies may not allow you to claim the restoration benefit if you have the same illness once again. It's important to carefully read the fine print!

3) Disease wise sublimit

Beware of disease-wise sublimit in health insurance policies! These sneaky clauses limit the amount you can get back for specific diseases or treatments, regardless of your overall coverage. For instance, a cheaper policy might only cover up to Rs 2 lakhs for a heart disease, even though the policy advertises a total coverage of Rs 10 lakhs. Don't be a victim of these unfair practices. Do your due diligence and make sure there are no disease-wise sublimits in your policy, because you never know what the future holds and it's always better to be on the safe side.

4) Opt for low waiting periods

Have you heard of waiting periods in insurance policies? It's when the insurance company won't pay out for certain pre-existing or critical illnesses during the first few years of your policy. And the wait can be a long one - sometimes as much as 3 years! The only way to avoid this is to choose a policy with the shortest waiting period possible. Unfortunately, some common illnesses like diabetes, hypertension, and osteoporosis come with a built-in wait time. But don't worry, by doing your research and choosing wisely, you can find a policy that works for you.

5) No room rent cap

Some insurance policies come with a limit on how much they'll cover for room rent. For example, if you buy a policy with a sum insured of Rs 5 Lakh and a room rent limit of 1%, your room rent is capped at Rs 5000. Any amount above this will come out of your own pocket. The catch is that all other expenses, like the surgeon's fee and medical tests, are tied to this room rent limit. So, if your room rent is below Rs 5,000, you'll be compensated for these expenses. But if it goes above Rs 5,000, your total claim will be reduced in proportion to how much you exceeded the room rent limit. To avoid these restrictions, it's best to opt for a policy that doesn't cap room rent.

6) Do you mind chipping in?

"Co-payment" means your insurance only covers part of your medical expenses and you have to chip in and pay the rest, usually 10-20%. The insurance company might offer a lower premium as a trade-off. However, it's not always worth it as you could end up paying lakhs in hospitalization expenses in the long run while trying to saving just a few thousand rupees in premiums. It makes more sense for senior citizens because they can save money this way.

7) Check for cashless hospital network

Want to make your hospital visits stress-free? Look for a health insurance plan that offers cashless services. With this feature, the insurance company pays for your medical treatment directly, so you don't have to dip into your own pockets. Just double check the policy document to see if the hospitals near you are part of the insurance company's network. That's it, you're all set for a hassle-free hospital visit!