Things to keep in mind before buying a health insurance cover

Sanjiv Bajaj

Choosing a right health insurance plan for you and your family is a serious decision as health is the only true wealth and it provides you peace of mind and sense of security not only for yourself but for your family too. It assures you that you can always offer them the best chance of getting well just in case anything goes wrong which is invaluable and priceless.

Many of us buy health insurance with the sole objective of saving tax but fail to consider the importance of buying a comprehensive medical insurance plan. More than 80% of financial crises originate out of a medical emergency and the same can severely damage one’s finances. Health emergency will not only require funds for treatment but will also hurt our ability to earn thus hitting us with a double impact. Imagine losing a family member because you cannot afford to give him the best medical treatment. So health insurance is a must today.

With increasing healthcare costs, the reason to get health protection as early as possible is gaining importance because once we get some issues like BP, diabetes the chances of getting a health cover go low and the cost goes high. There’s nothing more satisfying than to pay a small price and get peace of mind.

Following are the 10 rules you should keep in mind before you buy a health insurance plan:

Buy individual health insurance plan

You must have an individual health insurance plan even if your company offers you a corporate group health cover. There could be a possibility that your corporate cover will cease once you leave your job or retire and the company may also decide to withdraw this benefit or choose to leave other family members out of the coverage. If one is suffering from a chronic disease, this becomes more important. You can even take a Super Top up if you can’t afford a full individual Mediclaim.

Choose the right amount of sum insured

Choose the right amount as sum insured. While selecting a sum insured you need to keep the today’s costs in mind. If you are the one who is putting in a small city then your aim of cover should at least be ranging from Rs 3 to 5 lakh whereas if you live in a metropolitan city then your cover should not be less than Rs 5 to 10 lakh. Also, you can move from one insurer to another through porting. Don’t buy a new plan but instead port your plan. With porting your benefits which have been accumulating in the old plan gets transferred to the new plan. Also remember to keep on increasing your health cover from time to time to take care of the medical inflation.

Buy as early as possible

Get early protection. Buy a health cover as early in life as possible and definitely before you turn 40. As you are likely to make no or few claims in earlier stages of life, you can get the benefit of no-claims bonus and add up to the original coverage every claim-free year.

Buy the cover with lifetime renewability

Buy only a health cover which gives you lifetime renewability. Your aim is to have a health cover at older ages when you will have ailments and that protection is possible only if your policy offers lifetime renewability.

Never buy a policy which has claim loading

Never buy a health insurance policy which has a claim loading — if you get a critical illness which requires long-term cure then with claim loading your premiums will keep on increasing and soon may become unaffordable. So don’t fall into that trap.

Buy a plan which gives you super top-up

Buy a policy which gives you a restore limit or super top-up just in case you fully utilise your sum insured. This will act as a buffer to cover some unforeseen critical illnesses which may be very costly to manage like cancer etc. For example, a Rs 5-lakh plan with a Rs 5 lakh restore limit almost gives you Rs 10 lakh cover for critical illness at no extra cost.

Always buy from a reputed broker

Always buy your insurance through a reputed broker with an ability to help you with claims. Remember if you are having a heart attack or have an accident you won’t be in a position to do it yourself or fight the insurer if your claim is rejected without proper justification. Never buy direct and online. You can select a plan or study features online but only buy the health cover though an entity which has the ability to help you with the claim.

Never lie or hide information

Never lie and hide information in your application form. If you have an ailment, make sure you mention it. Get the broker to help you get a plan which will cover the ailment even after a waiting period. Today in most the plans all pre-existing diseases are also covered after 3 to 5 years depending upon the plan.

Opt for a plan that offers minimum waiting period

All health plans have a waiting period for pre-existing ailments. Please see what is waiting period in the plan that has been suggested to you. Waiting period generally extends from 2 to 5 years varying from company to company. It is always advisable to opt for a company that offers minimum waiting period. Also there are some companies which offer you coverage with lifetime exclusions. Exclude such companies from your options.

Buy a plan with no or minimal sub-limit

Buy a plan with no or minimal sub-limit. Be careful of plans which offer a cap on room rate. You can’t decide the category of the room if you or your family member is carried in an emergency situation to a hospital. Watch out for sub-limits.

Sub-limit means that your insurer specifies a limit for an expense and anything above needs to be borne by you. Room rent, diagnostics and doctor’s fee are the most commonly introduced sub-limits. You need to check the limits while choosing a policy.

Some additional tips that you must keep in mind before buying a plan:

Make a list of preferred hospitals where you would like to be cured. Does the plan offer cashless facility in those hospitals and are those hospitals covered in the insurers’ list of network hospitals. The reason I have not put this in the main rules is because as of today most of the insurers cover most of the good hospitals, so this should not be a major challenge.

The author is Managing Director, Bajaj Capital. The views expressed in this article are his own