We cannot insist enough on the importance of having a health insurance coverage. The scenario has improved in the past few years, and the acceptability of health insurance, at least in the metropolitan cities, has increased. However, the fear of an insurer rejecting a claim in future still prevails. That could easily be mitigated, if one pays a little more attention while buying the health cover in the first place. So, if you are planning to buy health insurance or to upgrade to a better plan, here is a 5-point checklist you must go through.
1. Plan long-term with respect to the sum assured
While assessing the amount of sum assured that one could opt in a health insurance cover, most individuals do not factor in inflation. We decide our health insurance coverage based on the prevailing hospitalization and treatment costs, when the need to claim on health insurance for a healthy 30-year-old wouldn’t arise until a decade or if you are lucky, when you are retiring.
To put things in perspective, hospitalization and treatment costs in an India metropolitan city, such as Mumbai, could cost anywhere between Rs. 15,000 for a day to Rs. 4,00,000 for five days. While pacemaker implant could go up to of Rs. 2,00,000 a prostate cancer surgery could cost upwards of Rs. 6,00,000. At average inflation rate of 6 percent, hospitalization bills would sky-rocket to Rs. 13,00,000 in 20 years’ time.
Do remember that a health cover of large sum assured might seem unnecessary at a younger age, but it will pay off when you’d need the most.
2. Assess the health status of those you wish to cover
Whether you are buying health insurance for the first time or not, it’s important to cover as many dependent family members as possible. Do not buy a single health insurance plan for the sole purpose of saving tax; include your dependent parents, if you can. You must include your spouse and children.
Your health status and that of your family members will determine your choice of plan and coverage. A family member of over 50 years of age and / or having a medical condition could call for higher premiums. It is possible that certain features of the policy would be activated after a waiting period.
The lifestyle that you and your family lead should also give you a clearer picture of how large your sum assured should be.
3. Choose the coverage option wisely
Naturally, a single person would prefer to buy an individual health insurance plan. One could choose a family-floater to include her dependent parents. A family floater plan is also suitable for married individuals looking to insure their spouse and kids. It is efficient and offers a large sum assured that could be shared among the insured family members for claiming. In fact, it is better than buying separate individual health covers for every member of the family.
However, if you have a member in your family who is above the age of 50 or has specific health issues, it is best to buy a separate health insurance cover for them. Not including them in the family floater ensures that the other members are not affected by the frequent claims arising on account of one person.
4. Keep an eye for the room rent limit
Many health insurance plans have a capping on room selection based on the room charges or room category. This means that you can claim hospital expenses only up to a room costing this limit. Hospitals usually charge differentially depending on the room you choose. Hence, if you choose to be admitted to a room above this room eligibility cap, you not only pay the differential rent, but also the (proportionate) difference on all charges that are higher as a function of you choosing a higher category room.
This concept would be clear with the following situation:
You chose a health policy with room rent limit of Rs. 5,000. At the time of hospitalization, you ended being admitted to a hospital room with Rs. 15,000 rent.
How you think it works: Your insurance company pays you Rs. 5,000 for the room rent, and the rest of the costs in the hospital bill, such as doctor’s visit, surgery etc, will be paid off completely.
How it actually works: Your insurance company pays you Rs. 5,000 for the room rent. Rest of the costs will be proportionally deducted and then paid off. The proportion is worked out like this – the room you chose with a rent of Rs. 15000, is around 67% higher than the eligibility defined in your policy (Rs. 5000). This means that the rest of the expenses apart from the room rent in the hospital bill will also get a deduction of 67% before the claim is paid off.
All in all, that would be massive loss.
Now, had you adhered to the room rent limit in the policy, and chose a room with Rs. 5,000 rent, your insurance company would not have deducted anything out of the rest of the expenses.
What does this mean?
Choose a policy either with a no room rent limit,or a private room category capping. Keeping an eye this detail is extremely important. Ask your health insurance advisor as many questions as possible to understand this condition of your plan.
5. Lookout for other capping on payouts
Insurers may apply some other capping into health insurance plans such as capping on specific treatments like cataract, knee replacement etc. As per this condition, in case of such listed treatments, the policy will limit the claims payout to the capping mentioned in the policy. Apart from these health insurance plans may also have a copay condition. As per this condition, you need to bear a specific percentage share in the claim amount approved by the insurance company.
It is important to be aware and compare such capping and conditions before you sign up with the policy.
If you have still not insured yourself under a health insurance plan, it is best to start now than to end up settling for a non-satisfactory cover later on. Do not keep this decision for the last minute and make a prudent choice with respect to this important risk cover.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of the publication