Buying a Health Insurance Policy? Read This First!


According to many experts, A health insurance policy is a must because going to hospital for even a small disease can burn a big hole in your wallet. A lot of products are available in the market, so you should plan, compare & get a best health policy based on your requirements & conditions. There are a few important points that you should keep in mind while buying a health insurance policy.

Health insurance policy

What is Health Insurance?

First of all you should know what health policy is. Health insurance is insurance that covers the whole or a part of the risk of a person incurring medical expenses, spreading the risk over a large number of persons. By estimating the overall risk of health care and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the health care benefits specified in the insurance agreement.

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Adequate cover

It is important that your health policy provides sufficient coverage for you and your family. “How much cover one should take will depend on various factors such as city where the person is residing and his age. In case of metros, medical costs are higher, therefore one should opt for higher cover… Also, if you are getting old, your coverage requirement will be higher,” says Naval Goel, CEO, PolicyX.com, an insurance policy comparing portal.

“In large metro-cities, a family should have a cover of Rs 10 lakh while in other cities Rs 5 lakh cover is sufficient,” says Anand Roy, senior vice president, marketing & sales, Star Health and Allied Insurance.

Pre-existing illness

You should always disclose a pre-existing disease while buying an insurance policy. As per Insurance Regulatory and Development Authority (IRDA) pre-existing diseases is any ailment, injury or any disease in any form which was diagnosed within 48 months prior to purchase of the policy.

Generally, pre-existing diseases are not covered under the policy or most of the insurers impose a waiting period during which insurance coverage is not available for that disease. The tenure of waiting period differs from insurer to insurer.

“Based on the information you give, the insurer will decide whether to provide cover to you or not. In case of non-disclosure, insurance company is not liable to pay you any cover,” Mr Roy said.

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Cash-less facility

Insurance companies generally offer two types of claim facilities–cashless and reimbursement. Under cashless, the insurer pays directly to the hospital while in case of reimbursement facility, you pay the hospital bills from your pocket first and then claim it from your insurer. It is advisable to take cashless as then you don’t have to pay from your pocket and avoid the hassle of reimbursement.

Co-payment

Co-payment basically means you will have to bear certain part of the amount that you will claim from your insurer. Suppose your hospitalisation cost is Rs 100 then you will have to pay 20 per cent from your pocket. In case of co-payment clause, the premium is lower. However, experts believe that in case of high claim amount, co-payment can be a burden on the individual.

“It may reduce the premium to about 5-10 per cent on co-payment of 20 per cent. But it is vital to understand co-payment. People may agree to co-pay thinking that it will reduce the premium but on a high claim amount, it could be a significant amount,” Mr Datta said.

 

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