General, Investment

10 Things to keep in mind while buying a Health Insurance Policy


Health insurance has becomes the necessity of life because health issues are the reality of present life.

A health issue doesn’t come by knocking the door and ask you “may I come in”. So, it is better to safeguard yourself before the arrival of such situations. A health insurance policy is only one solution to do this.

A health insurance policy doesn’t provide any shield against health issue but provides protection from the unbearable financial burden. In the medical emergency, a health insurance covers all your medical expenses (hospital, addiction treatment, surgery) and provides a financial cushion.
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Before buying any health insurance policy, you should know some very important facts related to health insurance which many insurance companies usually hide. Some of them are given below:

1. Individual Vs Floater Health Insurance

Floater health insurance plan covers the entire family members under a single policy. On the other side, a single person health insurance policy comes under an individual health plan. You can go with anyone.

2. Make A Requirement List & Compare With Policy

There are many health insurance companies having the same feature or having a little bit different. It becomes very difficult to decide, where you should go.

Here is the solution. Make requirements list that you are looking in an insurance policy like time period of the policy, maximum member coverage, policy premium, claim ratio, base plan, and your expected top-up cover.

Compare the requirement list with the features of your shortlisted policies. The policy who fulfill more requirements will win the race.

3. Coverage is More Important Than Premium

Some health insurance companies charge lesser premium but they have some hidden clauses like providing health insurance up to the age of 45 years.

Don’t go with any such plans because the chances of suffering from any major health issues start after the age of 45-50 years.

It is too good to have health insurance policy who cover for a longer period. No doubt, the premium of these policies is higher but will prove beneficial in long run.

4. Pre- Existing Disease

Pre-existing disease means already suffering from a disease at the time of buying a health insurance. For such a situation, there are two types of insurance policies.

First one, who don’t cover pre-existing disease at all. In this case, you can never claim for medical expenses arising due to pre-existing disease.

The Seconds one, who don’t cover pre-existing disease from the first day of the policy but accept after a waiting period, say 3-4 years. In this case, you can claim for pre-existing disease only after the completion of a waiting period.

5. Hospital Room Rent Capping

Hospital room rent capping is the most important thing that you should know. Insurance companies restrict the room rent up to a certain limit, in most of the cases, it is 1% of the sum assured of the policy.

On the other hand, the hospitals charge for the room according to the type of room selected i.e. general, private, deluxe etc. In case of costlier than the capping limit, the insurer deducts not only the additional room rent charges but also deduct a portion of other medical charges in proportion to the room rent.

6. Cashless Or Reimbursement

Insurance companies settled the medical claim in two ways. The first one, cashless claim settlement, in which insurer make direct payment to the hospital after your reporting.

The second one is reimbursement of the medical claim. In this, you need to pay the hospital bills firstly and later you get the reimbursement from the insurer.

The cashless claim policy is better because, in this, you don’t have to bother about fund raising. Bills are settled by the hospital & the insurer itself.

7. Hospital Network

Before finalizing any insurance policy you must check the insurer’s network with hospitals where you can avail cashless treatment. This hospital should be located near to your location.

In any medical emergency, it becomes difficult to reach hospitals far away from your location. Even fund arrangement is also hectic. Both these problems can be solved if the insurer has hospital network in your easily reachable location.

8. Buy Health Insurance Policy Online

Insurance companies pay a decent amount of commission to their agent for selling the policy offline. But on online, there is no need for the agents and company save commission amount. Due to this reason, insurance companies sell policies at a discounted rate on online.

You can compare the online policy premium with the offline policy. This can be a money saving tip for you.

9. Flexibility of Policy

Flexibility arises a question, can a company changes their terms at the time of emergency???

Just take an example, a person has a health insurance policy which offers only cashless claim settlement. One day he gets a heart attack and in an emergency, he has to admit in a hospital that doesn’t come under cashless network with the insurer. In such situation, whether the insurer pays reimbursement or rejected the claim.

Sometimes, in a similar case, the insurance company doesn’t pay any claim because of their terms & conditions. So, make clear all such facts at the time of buying the policy.

10. Claim Settlement

In most of the health insurance policies, the claim is settled down by TPA (third party administrative). In TPA, Health Insurance Company only sold the policy. All claim related work like claim settlement and collecting claim documents is done by TPA.

In such a case, search for the TPA and try to find out the how efficiently it works. You can find this from the old clients of the insurance company or from the hospitals that are within the network of TPA.



CA Rachit Jain

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