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Your Checklist To Buying The Right Health Insurance - Forbes

It is important for people to understand and embrace that health insurance has become a necessity that needs utmost attention. The rising costs of medical treatments and the sheer scramble to avail best possible treatment at your choice of hospital are a few important reasons that make health insurance a clear winner in the quest to stay financially secured while availing the best healthcare services.

Since the outbreak of the Covid-19 pandemic, people have become more cautious when it comes to their health. They are aware of the fact that if someone is hospitalized and does not have health insurance cover, there is no other option than foregoing a significant amount from one’s personal savings. To be precise, this is exactly why health insurance is necessary for everyone. 

Things To Look For When Buying A Health Insurance

There are some common myths relating to health insurance that need to be busted. Many consumers have this false perception that “any” health insurance policy is sufficient or good to take care of the medical expenses emerging from a hospitalization. However, this is not correct. 

Often, individuals have health insurance plans that are cheap or have a lower premium in comparison to other plans. When buying a plan with lower premiums and inadequate coverage, individuals are losing on a plethora of benefits. Some primary reasons for people to choose lower premium health insurance plans are lower coverage and fewer benefits.

Check sub-limits and co-payments

For instance, many plans have a mandatory co-payment clause (wherein customers need to pay a certain percentage of the hospital bill) or capping on room rent and certain procedures, due to which the premiums are low in comparison to other plans that do not have any limitations. The entire purpose of having health insurance is nullified when you have to pay a portion of the bill from your own pocket. In fact, several times, it has been witnessed that co-payment charges cross INR 2 lakh to INR 3 lakh when hospitalized for major surgery. The same goes for room-rent capping as well. 

Often, people are unable to find accommodation in rooms allowed in their health insurance plans and they have to move to a higher category. Under such situations, customers need to pay the extra charges of room from their own pocket and this can turn out to be a major expense when hospitalized for a longer duration.

Lower sum insured plans miss primary objective of health insurance

When you choose a health insurance plan with a lower sum insured, the premium of the plan will come low, as the risk covered is limited. Apart from this, cheap/lower-priced health insurance plans also miss on some major advantages that have become a must-have over the last few years. Some of these advantages include: 

  • Cover for hospitalization at home
  • Cover for Out Patient Department (OPD)
  • Day 1 coverage for pre-existing illnesses
  • Wellness benefits

Lower sum insured health insurance plans miss the primary objective of health insurance – adequate financial coverage against hospitalization expenses. Several times, health insurance plans with limited coverage fall short to cover the entire hospital bill and the family members of the patient have to pay the remaining bill. 

For this, while many people need to break into their savings, several others ask for financial help from family and friends. While an INR 5 lakh sum insured family-floater health plan might have been adequate five to seven years back; it may not be adequate today especially if you live in a metropolitan city where the healthcare is exponentially high.

In addition, a lower sum insured is mostly adequate for people staying in smaller cities – Tier 3 cities – where the cost of treatment is considerably low. Today, a four to five day hospitalization for any common ailments costs INR 70,000 – INR 80,000 while the treatment cost for bigger ailments can run into several lakhs of rupees. 

Moreover, during the first and second wave of Covid-19, we saw how hospitalization bills for treatment of infection due to novel coronavirus crossed several lakhs for 12 – 14 days of hospitalization. During such scenarios, a health insurance cover with inadequate sum insured always falls short.

Buy a comprehensive health insurance plan

When buying a health insurance plan to cover yourself and family members, it is important to understand that a cheap or low-priced health cover may not be adequate to provide comprehensive coverage to the lives insured. This is because it may lack the required sum insured and some key features and benefits that are very important given the current scenario. Lower premium must not be the only criteria when buying a health insurance plan to cover the healthcare needs of you and your family members. 

Invest in a plan that is well equipped to meet all your healthcare needs. In fact, over the last decade, with an increase in the number of insurers and the introduction of new-age health insurance plans, the overall pricing of products has fallen massively. For instance, while a INR 5 lakh sum insured plan used to cost between INR 1,500 – INR 1,700 per month until a decade ago, today you can buy a INR 1 crore sum insured plan at a monthly premium as low as INR 800 – INR 1,000. All these premiums are for a 30-year-old individual living in a metro city.

Equated Monthly Instalments (EMIs) to the rescue for affordable health insurance

Moreover, to ease the burden off the consumers, the insurance regular, Insurance Regulatory and Development Authority of India, issued a circular in 2020 directing all general and specialized health insurers to allow customers to pay the health insurance premium in easy monthly instalments. This means, instead of paying the entire insurance premium as a lump sum, customers can now pay the premium in monthly instalments. 

The facility of paying insurance premiums in EMI has increased the affordability by multiple folds across the entire country. Earlier, people used to buy plans with a lower sum insured as paying the entire premium, as a lump sum (all at one go) was difficult for many as low sum insured meant lower premium. However, over the last few months, there has been a drastic change in the buying behavior of people. The share of higher sum insurance health insurance plans in the last 18 months has come up significantly.

People are buying health plans with a higher cover amount in elevated numbers not just because the plans can be bought through EMI but also because the plans are available at affordable prices and are flooded with numerous features and benefits. Comprehensive plans with higher sum insured usually cover all possible ailments and promise to provide adequate coverage. In such plans, you do not have to pay any co-payment charges during hospitalization and the insurer pays for everything. 

Moreover, there is no room-rent capping or sub-limits on specific procedures. You have the prerogative of selecting the room of your choice during hospitalization. Some other added features of comprehensive health plans include Day 1 cover for pre-existing ailments (varies from plan to plan) like diabetes, asthma, and hypertension, exclusive wellness benefits like gym and yoga centre memberships, and discounts on renewals on staying fit and healthy.

It is always advised that when buying a health insurance policy to cover yourself and your family members: 

  • Do not solely look at the premium and buy a policy. Insurance is a cautious purchase that must be given utmost consideration. 
  • Keep in mind your family size, the age of the family members, and your family’s medical history. 
  • Ideally, it is always suggested to buy at least INR 10 lakh – INR 15 lakh sum insured for every individual in your family. 
  • Look for a plan that offers maximum features that can be of your use whenever needed. 

Bottom Line

While a majority of people are aware of the various benefits of comprehensive health insurance, a large percentage still looks at health insurance as a merely tax-saving tool. Many people accept that their primary reason behind buying a health insurance plan is a tax rebate on health insurance premiums under Section 80D of the Income Tax Act. 

In fact, many are actually unaware of the various benefits that health insurance has to offer. Yet, there is still a majority of the population that does have health insurance even after being well aware of its numerous benefits. People are oblivious of the high-risk illnesses they are exposed to by not buying a health insurance cover. Little wonder, as per the the insurance regulator’s report, over 80% of healthcare expenses in India are paid from one’s own pocket.

A cheap health insurance plan may fail to cover all your healthcare needs and requirements. So, purchase wisely.