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Top 6 Things to Consider While Buying Health Insurance

The importance of having a health insurance policy cannot be denied. Health expenses are increasing every day. Costs of treatment are being recalibrated and are growing higher with each passing day owing to the sophisticated technologies used. Although it may seem unnecessary, health insurance has been life-saver for most people. It has come in handy for people when they require it the most. It is a significant investment to make, considering the vagaries and uncertainties associated with life. Hence, before purchasing a health insurance plan, there are some considerations to make to ensure the right insurance choice.

6 Health Insurance Buying Aspects to Consider

Here you have 6 important things to ponder while buying a health insurance policy in India. 

  1. Age

When purchasing the best health insurance, ensure to take into account the age of family members who are being insured. Let’s say, in a family floater health insurance policy, the premium amount is decided based on the eldest family member’s age. Also, ensure to check the age limit for purchasing health insurance coverage. For example, there are health insurance plans with a minimum age limit of 91 days and a maximum age limit of 60 years.

There have been substantial improvements in the Indian health insurance sector. Newer health insurance policy products are being offered with relaxed age criteria so that senior citizens up to 75 years of age can be covered. When it comes to senior citizen health insurance plans, the following are some common features of the same.

  • Co-pay – There is a co-payment amount to be shared by the insured person in case of a claim in a ratio of 10 – 30%. As an example, if there arises a claim on a policy that has a co-pay option, then the insured is liable to share the cost of the claim up to a pre-defined portion.
  • Sum insured limits – The insured sum under senior citizen health insurance plans is usually in the range of Rs 1 lakh to Rs. 5 lakh. This amount can be increased if the insured is willing to pay a higher premium.
  • Pre-existing Conditions – Existing medical conditions are scoped out of the plan for a waiting period of up to 4 years. Post-which, the medical condition may be included in the plan.
  • Medical Examination – Some insurers providing senior citizen health insurance policies could conduct a medical examination of senior citizens before granting the policy.
  1. No-claim Bonus

This is the discount offered by insurance companies to a policyholder upon renewal if the policyholder has not claimed any amount during the year. The more the number of claim-free years, the higher the coverage amount is raised, at the same premium. Most health insurance plans set an upper limit to the no-claim bonus.

For example, for health insurance of Rs 5 lakh, if a 10% no-claim bonus is being offered for every year without a claim, the maximum benefit that can be availed would be capped at 50%. In this example, for the first claim-free year, the sum insured would be raised by Rs 50,000 to Rs 5,50,000. In the 5th claim-free year, the sum insured would be raised to Rs 7,50,000. This is 50% of the sum insured amount and the upper limit.

Insurance providers will have varying upper limits for no-claim bonus. So check this information before proceeding. Private and public sector health insurance companies provide no-claim bonus health insurance plans. In this regard, these are the main no-claim bonus types.

  • Premium Discount – the no-claim bonus is applied on the premium payable towards the health insurance plan. A discounted premium is applied during policy renewal.
  • Cumulative Benefit – There is no discount applied on the premium, instead the sum insured is increased. An increased sum insured is never decreased in the subsequent year or years even if there are claims made.

Health insurance plans can also have an add-on that can be availed for a price, where this add-on increases the percentage of bonus at policy renewal time.

  1. Preventive Health Check-up Coverage

The cost of preventive health checkups has gone up. If a health insurance plan covers hospitalization expenses only, it is also an excellent idea to rearguard it with some preventive health check-ups and maintenance coverage. Many health insurance plans provide free medical check-up as part of the health insurance coverage for the policyholder and their dependents. As per the Insurance Regulatory and Development Authority of India (IRDAI), penetration of health insurance policies in India is at 3.49 percent. And from this percentage of policyholders, 10 percent or less of policyholders take the free health checkup benefits from their respective health insurers.

Some insurers offer this facility after a waiting period of up to 4 years, while some health insurers offer it from the very first day of coverage. All health insurers may not offer this facility annually; it could be once in two years. It is always beneficial to choose a policy that offers at least one free preventive health medical checkup in a year. The percentage of costs covered in the health insurance plan for free medical health checkup can be anywhere from 1% to 3%.

Sometimes in plans such as family floaters, the free checkup component can be insufficient. In this case, the insured can increase their coverage amount to increase the free check-up coverage amount. Some other considerations to make in this regard include inclusion/exclusion of certain types of ailments, waiting period, pre-hospitalization cover amount, free check-up claim process, network hospitals/clinics in the policy, lifetime renewal amount and so on.

  1. Maternity Benefits

A common mistake made by many insurance seekers is to ignore maternity costs. Expenses associated with maternity and delivery can be high, and currently, with upgraded medical facilities, the average prices are higher than before. Maternity benefits can either be part of a health insurance plan or can be a standalone plan by itself. It is better to buy a standalone maternity health insurance plan as it covers all aspects of child-birth starting from pre-hospitalization to post-hospitalization/pregnancy. Choosing a standard policy has its benefits specific to maternity support. However, health insurance providers also enable an add-on rider to activate a maternity health insurance component for a price.

Maternity best health insurance benefits can only be availed if the policyholder and his wife are married under law. It is not applicable for live-in couples. Some health insurance providers offer maternity coverage to single women too. Irrespective of their marital history or status, these plans are offered to such prospective policyholders after a waiting period. The waiting period in such cases is to ensure that benefits of the maternity coverage are not utilized immediately – as this is a loss to the insurance company and also considered unethical on the part of the policyholder.

Women working in corporates and multi-national organizations can avail maternity coverage as part of the group medical best health insurance offered by their respective employers. It can be availed irrespective of their marital status. In this regard, group health insurance coverage plans work differently, and they generally do not have waiting periods.

  1. Portability Facility

Introduced by IRDAI in the year 2011, portability allows health insurance policyholders to transfer their accumulated credit such as no-bonus claims, from one insurer to another, while switching between insurers or plans. Even after switching insurers, under the new health insurance coverage, the insured is eligible for continuity benefits such as free preventive health checkups. There is no reason why an insurance policy will not have a portability feature, as this is a directive by the IRDAI, instructing all health insurance providers to include portability in their policies. If health insurance coverage does not have portability, it is better to avoid taking up that policy.

  1. Benefits Associated with Cashless Hospitalization

Almost every best health insurance provider offers cashless hospitalization. If there is one that does not, it is better to steer clear of such an insurance provider. Before taking up an insurance plan, it is better to check the network of hospitals covered under the cashless hospitalization clause. The network hospitals should range from mid-level to elite hospitals. Some insurance providers only tie-up with either type of hospital, leaving policyholders with not many options to exercise their choice.

It is also good to note the process involved in cashless hospitalization. The process is generally the same, however, there could be some insurance providers with tedious paperwork as part of their cashless hospitalization benefit claim process. It is easier to go with an insurer with a streamlined, online, and completely paperless cashless hospitalization process. Some insurers also include administrative expenses and the cost of medicines as part of cashless hospitalization benefits coverage. The insurance could be pricey, but it is worth considering such benefits given that the cost of medicines and administrative expenses are very much a reality during hospitalizations.

In a Nutshell!

Given the numerous best health insurance policies available in the market, it might become overwhelming to compare the benefits of each policy over the other. Therefore, it is essential to prioritize one’s goals for medical health insurance coverage and look for aspects in a health insurance plan that fulfill these goals. By doing this, it is easier to cordon only a few sets of health insurance providers to avail insurance from. There is also no harm in availing specific health insurance plans related to maternity, senior citizen health insurance, etc.

Written By: Paisawiki - Updated: 22 September 2020

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