Health insurance is no longer a luxury but a necessity, especially in today’s world, where medical expenses can skyrocket unexpectedly. In India, the importance of having a comprehensive health insurance plan has become more evident as healthcare costs continue to rise. With so many plans available, choosing the right health insurance can seem overwhelming. But fear not — understanding the key features of health insurance policies can help you make an informed decision that suits your needs. Here’s a comprehensive guide on the critical factors to consider before buying a health insurance plan.
Things to consider before buying a health insurance policy in India
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Coverage Amount (Sum Insured)
One of the first things you’ll notice when comparing the best health insurance policies is the sum insured. This is the maximum amount the insurer will pay towards your medical expenses in a given policy year. The sum insured should be adequate to cover major medical treatments, including hospitalisation, surgeries, and post-treatment care.
When choosing the sum insured, consider factors such as:
- Your family’s medical history
- Healthcare costs in your city
- Age and number of dependents
- Your income and financial situation
For a young, healthy individual, a sum insured of ₹5-10 lakhs may suffice. However, for families or older individuals, a higher coverage amount would be more appropriate.
2. Inclusions and Exclusions
Not all health insurance plans are created equal when it comes to coverage. Each plan has its own set of inclusions (what is covered) and exclusions (what is not covered).
Some standard inclusions typically covered by health insurance plans include:
- In-patient hospitalisation expenses
- Pre- and post-hospitalization costs (medical expenses incurred before and after hospitalisation, typically for 30 to 60 days)
- Daycare procedures (medical treatments that don’t require a 24-hour stay in the hospital)
- Ambulance charges
- Organ donor expenses
However, it’s equally important to be aware of the exclusions:
- Pre-existing diseases may not be covered immediately and could have a waiting period of up to 2-4 years.
- Certain lifestyle-related conditions, like cosmetic treatments or infertility treatments, may not be covered.
- Alternative treatments like Ayurveda or homoeopathy may not be included in every plan.
Always go through the list of exclusions carefully to avoid surprises later on.
3. Network Hospitals
Most health insurance companies offer cashless hospitalisation, where the insurance provider directly settles the hospital bills. However, this is only available at network hospitals — hospitals that have a tie-up with the insurance company.
Before buying a plan, ensure that the insurer’s network includes reputed hospitals in your city or area. Having access to good network hospitals can be crucial in emergencies, and it also saves you from the hassle of arranging funds upfront and waiting for reimbursement.
4. Room Rent Limit
A lesser-known but critical feature of health insurance plans is the room rent limit. This refers to the maximum daily allowance for the hospital room during your stay. If you choose a room that costs more than the limit, you will have to bear the extra costs.
For instance, if your insurance policy covers ₹5,000 per day for room rent and you choose a room that costs ₹7,000 per day, you’ll have to pay the difference from your pocket. Additionally, many other hospital charges (like doctor’s fees and ICU charges) are linked to the room rent. So, a higher room category can significantly increase your out-of-pocket expenses.
Look for plans that offer either no room rent cap or a sufficiently high limit, particularly if you live in metro cities where hospital room charges tend to be higher.
5. Pre-existing Disease Waiting Period
Most health insurance plans do not cover pre-existing conditions (like diabetes or hypertension) from day one. They typically have a waiting period, ranging from 2 to 4 years, after which these conditions are covered.
If you or a family member have any pre-existing health conditions, opt for a plan with a shorter waiting period. Some insurers offer plans with reduced waiting periods at a higher premium. However, it’s crucial to honestly declare your pre-existing conditions at the time of purchasing the policy to avoid claim rejection later.
6. Lifetime Renewability
Health insurance plans come with a specific duration — usually a year — after which they need to be renewed. While renewing annually is common, you should check for plans that offer lifetime renewability. As you grow older, the risk of developing medical conditions increases, and having the option to renew your policy for life ensures that you’re covered in your later years, when health insurance is most critical.
7. Claim Settlement Ratio (CSR)
The Claim Settlement Ratio is an important metric to assess an insurance company’s reliability. CSR refers to the percentage of claims settled by an insurer out of the total claims received in a financial year.
A higher claim settlement ratio (generally above 95%) indicates that the insurance provider is dependable and more likely to settle your claims. While choosing a health insurance plan, it’s a good idea to check the CSR of the insurance company to ensure that your claims won’t face unnecessary delays or rejections.
8. No Claim Bonus (NCB)
Insurance companies offer a No Claim Bonus (NCB) as a reward for not making any claims during the policy year. NCB typically comes as an increase in the sum insured at no additional cost, providing you with more coverage in the subsequent year.
For instance, if your sum insured is ₹5 lakhs and you don’t make any claims during the year, your coverage may increase to ₹6 lakhs in the next year. The NCB feature can be very beneficial over time, especially if you remain healthy and claim-free for several years.
9. Maternity and Newborn Benefits
For young families, health insurance plans with maternity and newborn coverage are a crucial consideration. Maternity coverage can help ease the financial burden of childbirth, prenatal care, and postnatal care. Some plans also cover newborn babies’ healthcare expenses up to a certain period.
Be aware that maternity benefits usually come with a waiting period (2-4 years), so it’s wise to purchase such plans early if you are planning to start a family in the near future.
Conclusion
Choosing the right health insurance plan involves more than just comparing premiums. By evaluating key features such as coverage, inclusions, claim settlement ratio, and waiting periods, you can ensure that you are adequately protected when medical emergencies arise. Take the time to understand the fine print, ask questions, and select a plan that fits your health needs and financial situation. After all, a well-chosen health insurance plan can provide peace of mind and financial security in uncertain times.