Health Insurance Buying Guide
India is one of those countries that are projected to have amongst the highest incidence for critical illnesses such as hypertension, heart diseases, diabetes, kidney failures and cancer. While mortality rates on account of these diseases are on their way down and a larger percentage of those affected can expect to fight their way back to wellness, the resources required for battling such ailments can prove to be beyond one’s ordinary savings. The need for health insurance is being fairly well recognised and the take up rate for these products in India has been on the rise. Most people, however, end up making the common mistake of making price the only criterion for choosing which health insurance product to buy.
While premium comparisons are inevitable, the varied nature of benefits and associated terms and conditions of these products make it very important to look beyond just price to make sure you get the right value for money and a product that provides you not only the right amount of cover but the right coverage itself.
Here’s how you should approach your health insurance purchase process:
Step 1: Choose between an individual plan or a family floater
A family floater policy covers all family members (Insured, his/her spouse and children) under one single policy. The Sum Insured floats over the entire Family and a single consolidated premium needs to be paid. There is typically a limit on the no. of children that can be included and age before and beyond which they are not covered which varies from policy to policy. An individual policy, on the other hand, provides health insurance coverage to only the individual for whom the insurance has been purchased.
While a family floater may turn out to be cheaper than taking 2 or more individual policies, the associated cover provided is at a family level. For e.g. if you take 2 Individual policies with a Rs. 200,000 Sum Assured each for yourself and your spouse, then both of you are covered for Rs. 200,000 each. However, if you take a family floater with a Rs. 200,000 Sum Assured then this limit applies to the two of you together.
Step 2: Choose the right amount of cover or Sum Assured.
While there is constant progress and advances being made in the field of medicine, health care costs are rising. The costs associated with treatment and hospitalisation of most critical illnesses can be fairly prohibitive. While considering costs of treatments of critical diseases, one should also keep in mind factors such as location and types of hospitals. Remember that major illnesses or accident requiring hospitalisation can significantly deplete your resources. Choose a cover that is fairly adequate given your personal circumstances, the health care costs you want to insure against and your premium paying capacity.
Step 3: Look beyond your employer provided insurance
Employer provided insurance will only cover you as long as you are in service. You may, however, change jobs or retire. In all such cases you and your family will be stranded if a medical emergency arises and you have not arranged for an alternative health insurance policy. It can also act as a supplement to your existing medical cover in case the cost of medical treatment is higher than your existing cover level. Delaying the purchase of your personal health insurance will also lead to issues related to higher costs, exclusions and waiting periods etc.
Step 4: Compare products before you choose, but not just on price
Health insurance products in the Indian market are quite varied in respect of their benefits, terms, exclusions and other associated features. Make sure to review and compare the following:
Maximum age of renewal: This is the age to which the company would continue to provide you with health insurance on payment of premiums. Products that offer high renewability age may be higher on price but, if affordable and having a cost differential that is not prohibitive, should be considered as they allow you to remain covered under a health insurance plan especially at ages when it matters the most.
Product flexibility features: You may want to consider products that provide a higher flexibility to you as a customer. For e.g. if considering family plans you may want to look at products that allow for coverage to extended family member beyond your spouse and children. Similarly products that provide covers across larger age segments may prove to be beneficial.
Waiting period for Pre-existing diseases: Health insurance plans invariably have a waiting period for any pre-existing conditions of illnesses can be covered under the risk coverage. What this means is that if you continue with an insurance product (i.e. keep renewing your policy) for the specified period then certain pre-existing illnesses may be covered on the completion of the waiting period. This waiting period varies by product and insurance company.
Cashless hospitalisation: This feature provides for your hospitalisation related expenses being paid for directly by the insurance company to the hospital. The feature is made available only for treatments in hospitals that fall under an insurance company’s approved network and is subject to the expenses being those that are covered and not excluded under you plan. One may, therefore, also want to compare the availability of this feature and associated networks of hospitals of each insurer when comparing products to meet your needs.
Cumulative bonuses or discounts: Most products carry incentives for ‘claim free’ years and offer either an increased Sum Assured for no extra cost or a reduced premium for your Sum Assured.
Exclusions: Do carefully review the exclusion list of each product. Needless to say, for the same amount of cost you would want to go for the product that has the least number of exclusions. Alternately, you may want to be covered for a specific medical condition which may actually be excluded in a given product.
Other features: You may also want to compare other features that are available in a product that make the product more suited to your needs. A newly married couple, for example, might benefit from considering a product that offer maternity benefits – while most products in the market do not offer this feature, some do after a defined waiting period. There are a host of other features that one could look at such as health checkups, dental treatment coverage, day care procedures etc.