Today, with medical costs at all-time high, emergencies such as sickness, disease and accidents which may result in prolonged hospitalisation, can leave you in severe financial crisis unless you have a comprehensive medical insurance policy which takes care of all your required expenses. So how do you choose a plan that’s perfectly suitable for you and your family?
There are a lot of factors to consider when choosing an insurance plan, most importantly: what your health care needs are, and what you can afford to spend? Once you are aware of your financial strength, the next step is to identify the “ought-to-have” with anticipating certain medical needs. With the right insurance, you could save thousands, perhaps even tens of thousands, if you or a family member gets sick.
Here are some critical clauses that needs your attention to detail while buying a health insurance policy:
• Sum insured limits
The main limit in health insurance is the sum insured. Any medical expenses incurred over and above the sum insured are not payable. It is advisable to take adequate cover from an early age, particularly because it may not be easy to increase the sum insured after a claim occurs or when the age increases.
• Individual/floater policies
Most buyers often struggle to make a decision on whether to buy an “individual” policy for each family member or a “family floater policies”. While an individual policy works best in all situations, it can be an expensive option. The family floater plan on the other hand offers flexibility in terms of utilising the overall insurance coverage among the family as a group. While an individual opts for a family floater cover, the sum insured opted should be sufficiently high considering a situation where more than one person in a family needs hospitalization in the same year.
• Extent of coverage
When you are paying for a comprehensive cover, it is important to make sure that the risk covered is comprehensive as well. One should not buy a plan just because it’s cheaper than the rest but should be measured in terms of premium versus benefit comparison. Benefits such as pre and post hospitalization, day care procedures, OPD cover, maternity extensions or ambulance service, should be taken into consideration.
• Waiting period for pre-existing disease exclusions
Many individuals have health related problems that exist before you apply for a health insurance policy or enroll in a new health plan. Pre-existing condition imposes a waiting period which is also called the cooling period. Therefore, apart from the insurance premium being charged by various insurers, you also need to compare the waiting periods stipulated in the policies for covering pre-existing ailments. Some policies specify a waiting period of two years, while in case of some, it could extend to four years. Similarly, there are waiting periods for certain listed conditions like hysterectomies, cataract, kidney stones and knee replacement surgeries which may vary from one year to four years and these also need to be compared.
• Any internal sub-limits like room rent curbs, sub-limits on specific procedures
In order to avoid inflated charges that hospitals levy on patients with an insurance cover, some policies have sub-limits on room rents or certain procedures and this becomes the most critical feature when evaluating a health insurance policy. Typically the insurer places two kinds of limits, on the hospital room rent and the liability for specific diseases. Classically the room rent expenses are capped at 1% of the sum assured for a day, while ICU charges have a ceiling of 2% of the sum assured. Plans free of sub-limits are preferred as it prevents surprises at the time of claims. These sub-limits are generally seen in plans with lower overall sums insured.
• Deductibles/co-payments
Sub-limits can also take the form of co-payments, where the insurer will be asked to pay a predetermined percentage of the claim amount or deductibles, where the insurer will have a cut-off cost which you will have to bear and the insurer will come into the picture only when the bill goes beyond this limit. It is advisable to go for plans that come devoid of restrictive options, such as co-payments, limits on room rents and treatment-specific limits. They may cost a little more but evade financial risk during emergencies.
• List of exclusions
While your health insurance policy can provide relief in times of emergencies, there may also be times of trouble in case you are not aware about the ailments that are covered and those that aren’t. It is important to know the list of exclusions in your health insurance policy to avoid instances when you end up paying additionally for a service already covered in your policy or in worst case scenario, post treatment you realise that your policy did not cover the treatment of that particular illness.
• In-house claims servicing or use of TPA and service levels/market feedback
It is important to know whether the insurance company has its own in-house servicing unit or uses a TPA for servicing the policies.
Insurance companies having their in-house servicing units have a better turnaround time for claims servicing and cashless processing.
A hospital or medical institution which has an agreement with the insurance company or TPA (Third Party Administrator) to provide cashless treatment is a network hospital. While buying a health plan, make sure of the proximity of the network hospital from your place of residence or work. Opt for an insurer who has more network hospitals in geographical locations where you are likely to need medical care.
Ensure that the facilities and repute of the hospitals in the network are worthy.
• Reputation of the insurer
Traditionally, we all are inclined to go for plans that our friends and family suggest as we trust their experience and judgment.
But the market is flooded with products and marketing gimmicks to lure customers. While deciding on a health plan, it’s important to conduct a due diligence on the insurance company — keeping track of how smooth their claim settlement is, how many claims have been settled, time efficiency and network.