Are You Choosing The Right Cover? A Comparative Check On Your Health Insurance

Health insurance is an integral part of your financial planning as it covers the bills and cost of treatment for hospitalisation and surgery, whether emergency or planned. If you have purchased the right health insurance, such emergencies do not impact your well-planned finances or take a chunk of your savings and investments. A pertinent question in your mind would be, “How to choose the right health insurance for me?”

While choosing the right health insurance policy, remember India's high medical trend rate. Simply put, medical inflation at 14 %in 2022 – 23 is the highest in Asia and higher than the global average. Also, bear in mind that lifestyle diseases and the cost of their treatment are ever-increasing, and your health insurance plan needs to cover this.

How to Choose the Right Health Insurance Plan in India?

You will now read about choosing the right health insurance plan, what features and benefits to check for, how to balance them, and the sum insured you should look at:

Wide Coverage

You need to understand what your health insurance plan covers. It would help if you went for a comprehensive plan to ensure sufficient coverage when required. Comprehensive coverage also includes a wide range of health-related and medical emergencies. When you are picking the right health insurance plan, you need to look for comprehensive coverage that includes the following:

• Hospitalisation expenses
• Pre and post-hospitalisation expenses
• Daycare procedures
• Ambulance hire charges
• Regular health check-up facility
• Critical illness coverage
• Automatic restoration of cover
• Alternative treatment options
• No claim bonus
• Cumulative bonus
• No or high sub-limits

While you wonder how to pick the right health insurance plan, you must read the policy documents in detail. Remember to carefully review the fine print to understand what a particular policy includes and excludes.

Pro Tip:  A Family Floater plan, which covers the probable health issues of every individual under one plan, is worthwhile when deciding how to pick the right health plan.

Sum Insured

In the parlance of health insurance, the sum insured stands for the maximum amount a health insurance company will pay in a particular year to cover your expenses in case of hospitalisation or a medical emergency. You must bear any expenses exceeding the sum insured from your resources. Sum insured is one of the most important factors when you ask yourself, “Which Medicare plan is right for me?” and needs careful calculation before you freeze on a figure.

Your health insurance coverage should have a sum insured of at least 50% of your income on an annual basis. Going by this logic, you need a sum insured of Rs 10 lakhs if your annual income is Rs 20 lakhs.

There are other factors to consider if you plan a scientific calculation of your sum insured. In this case, age, position in the cycle of life, number of dependents, family health history, and such factors may be considered.

Sum insured needs to cover for the stage of life you are in. If you are getting married or are planning on having a child, the sum insured would need to cover these events and the new members of your family.

Do note that premiums are higher for a higher sum insured.  While you need to factor in your budget or your ability to afford your sum insured, you need more sum insured coverage to suit the purpose when you need it the most. It would help if you chose your sum insured wisely.

Pro Tip: You may purchase a health insurance policy with a sum insured of Rs 10 lakhs and enhance your coverage by purchasing a Top Up or Super Top Up policy. These policies will cover higher expenses once you exhaust the sum insured of your basic policy.

Care Health Insurance has Care Enhance, a Super Top–up policy that offers a wide range of benefits and is affordable.

Flexible Plans

It would help if you chose a flexible health insurance plan that allows you to add new family members as per your stages in life. You need to be able to add your spouse, child, parents, parents in law. Such flexibility will save you a lot on premium payments if you have to purchase separate policies instead. A family floater health insurance policy will cover your entire family, with all the members sharing the sum insured amongst themselves.

Flexibility is also something you should look for in the premium payment side. When finding the right health insurance, look for options in premium payment and payment terms.

Pro Tip: Most health insurance companies offer a discount on online payment and substantial discounts when you purchase your policy for two or three years and pay the premium for the entire period together.

Care Health Insurance offers a 5 % discount on digital payments. They also offer a 7.5 % discount on the second-year premium and a 10 % discount on the third-year premium paid together.

Waiting Period

All health insurance companies have a standard waiting period during which they do not pay out claims other than those arising from accidents. Following are the types of waiting periods which are usually applicable:

• Initial Waiting Period – 30 days
• Pre Existing Diseases – 48 months
• Specific Diseases – 2 years
• Maternity Benefits – Minimum 30 days

>> Also Read: Do Health Insurance Premiums Increase Every Year?

Any claim made within this period is not admissible.

While wondering how to choose the right medical plan, you need to see which health insurance company has policies with the least waiting period. Some policies allow you to pay for an add-on rider to reduce some of these waiting periods. So, do your research properly and choose the plan that is best suited for you.

Co-Payment Clause

Co-Payment, popularly known as Co-Pay, is the percentage of the claim amount that the policyholder will bear. In the case of a policy with a 20 %co-payment clause, in a claim of Rs 5 lakhs, the medical insurance company will pay Rs 4 lakhs, and you, as the policyholder, will need to pay the remaining Rs 1 lakh.

When you buy a health insurance policy, ensure that you buy one with no or low co-payment clauses. However, a benefit of the co-payment clause is that your premiums get reduced.

Claim Settlement Ratio

Claim Settlement Ratio or CSR indicates the proportion of claims paid by the medical insurance company within the stipulated period to the total number of claims received. A medical insurance company with a higher claim settlement ratio will indicate that your claim has a higher chance of being settled.

Pro Tip: According to published figures, Care Health Insurance had a Claim Settlement Ratio of 100 %in the first quarter of 2022 – 23!

Lifetime Renewability

Lifetime renewability is another important factor to consider when picking the right health insurance plan. This saves you from having to run around trying to purchase a new (hard-to-get) policy after a certain age. You need to check to what age your health insurance company will allow you to renew your policy.

This point is extremely significant as you are most likely to require health insurance coverage as you advance in age. Not having lifetime renewability means you may have to purchase a new policy with expensive premiums or, in the worst-case scenario, be left without any coverage, as underwriters are very conservative in issuing new policies for those who are advanced in age. Some health insurance companies do not allow the purchase of new policies beyond a certain age.

Limit on Room Rent

Health insurance policies often limit the rent or room type they will pay for. Choose a policy that allows you to choose rooms.

Network Hospitals

Network hospitals are those with which your health insurance company has a tie-up and where a cashless facility is available. It is important to check whether the hospitals and health care facilities you prefer or those near your residence are part of your medical insurance company's network.

Without cashless facilities, you may have to wait for your treatment to start as you arrange for funds, so check the network before purchasing a health insurance policy.

Wrapping Up!

The answer to the points above will help you understand whether you are choosing the right cover, whether in the sum insured or the other benefits available in your health insurance policy. Remember, a health insurance policy is necessary and not something you purchase without adequate research or for tax-saving purposes only. Choosing the health insurance policy best suited for you will ensure that you get the maximum coverage vis-a-vis facilities at the minimum cost to yourself.

Disclaimers: All plan features, benefits, coverage, and claims underwriting are subject to policy terms and conditions. Kindly refer to the brochure, sales prospectus, and policy documents carefully.