2016-07-21 17:10:00 UTC
In part 1, we discussed the various kinds of health insurance plans, benefits, add-ons and riders. Here, we discuss how to go about picking a health insurance plan that suits you and your family.
Screening the various options and picking a health insurance plan can be a complicated and tedious process. Moreover, there is no magic bullet cure for a wide range of situations or individual circumstances. However, being aware of what to look for, when you compare plans, can ease the decision making process. The choice typically depends on several factors such as your age, number of dependents, medical condition, costs, medical history (hereditary disposition), hospital preferences, location and existing insurance coverage, if any.
Here are some guidelines to help you whittle down the options and zero-in on the apt plan.
The most important thing is to finalize the family health insurance requirements. This entails making a list of family members, number of children and adults, taking stock of the medical / hereditary problems affecting the family, etc. This will give you a fair idea about how much cover you and your family actually need. If for example, the children are young and healthy with no history of any chronic illness, you may not need health insurance for them just yet or maybe you feel it is required. Furthermore, if you have aged and dependent parents that have poor health or medical history, then you have to evaluate your needs carefully. Including aged parents in a family plan can increase the cost of cover for the whole family, as the premiums for the family floater plan are set by the age of oldest family member being insured. Moreover, including aged members with frail health as part of your family floater plan could potentially leave the rest of the family without any cover when they need it.
Based on family medical history and genetic pre-disposition, if there is a need for a health cover for health conditions like heart ailments, diabetes, etc, ensure that you have a plan to address this.
It is important to buy at least a basic health insurance cover early in life for both spouses. Health Insurance policies once issued are life-long by law and insurance companies cannot increase premiums during renewal based on your claims history. As a result, the premium stays relatively low forever for early entrants.
On the other hand, middle-aged people, who acquire health insurance in their forties or fifties represent a considerable risk to insurers, are subject to a thorough scrutiny, and charged a hefty premium in exchange for a suitable health cover. In addition, most health insurance plans have a waiting period of 2-3 years for pre-existing ailments. When you buy health insurance early in life, you are able to enjoy the full benefits of your health insurance plan without any strings attached.
If you indeed want a comprehensive policy that covers a wide range of critical illnesses as well as maternity, surgery, etc, then you have to read the exclusions, exceptions and sub-limits carefully to ensure you are not shortchanged. Since not everyone can afford these comprehensive plans, it is important to decide what you want your plan to cover.
If you need supplementary coverage over your basic healthcare plan, add- ons like Maternity Cover, Critical Illness, etc. are available to cater to such specific requirements. Maternity coverage reimburses medical expenses incurred during pregnancy and childbirth. You can obtain Critical illness coverage either as standalone policy or as a rider. A combination of a basic health cover along with add-ons can ensure that you and your family enjoy comprehensive health coverage. You also have to worry about your future needs and a top-up plan as already explained in part-1 can be a cost-effective option. However, a basic medical insurance cover together with a Critical illness cover( to know more read part-1 and part-2) and a personal accident insurance coverage(to know more read part-1 and part-2) for the spouses should be good enough for most families and this will obviate the need for a top-up plan or a comprehensive plan.
Sum assured is the amount that a person or a family (in the case of a family floater plan) is covered for under the plan for a policy year. It is very important to choose an adequate sum assured, taking into consideration the escalation in medical costs, but the premium should be affordable as well and hence you have to strike a balance. For example, if the limit under the plan for a hospital bed / day is one percent of the sum assured, then your sum assured should be reasonable to cover this cost, without you having to pay the difference between costs incurred and costs allowed in the plan.
As a minimum, a young person below the age of 34 should opt for an indemnity cover in the range of ₹ 3 lakhs to start with, while a married individual should explore the family floater option for coverage of ₹ 5 lakhs for both spouses. Of course, the amount depends on where you live because, medical expenses in metros/tier-1 cities are considerably higher than tier II / tier III cities.
To keep up with the inflation in medical costs it is a good idea to review and revise the sum assured each year upon renewal.
It is important to ensure that your health insurance policy has a wide network of hospitals and includes in particular the better ones in your neighborhood especially if you are particular about using cashless facility. In the event of a medical emergency, it helps to have access to the best hospitals in the vicinity, as you are more likely to visit them in emergency. It is important to pick an insurer that has a strong presence in the city or part of India you live in.
Another important aspect that merits attention is the inclusion of hospitals with varied specialties i.e. the policyholder should have a choice when it comes to certain illnesses instead of having to visit the same hospital that may not be able to provide you with proper care. Although, there is no guarantee that the list of network hospitals will not change in future, a strong network gives you enough confidence in the tie-ups and the infrastructure the insurance company has in place. Many insurers, notably PSUs and some private insurers have a higher co-pay clause for treatment in hospitals that are not part of their network. Choosing a plan with a wide network will help you avoid additional costs.
It is important to understand the terms and conditions of a health insurance policy as the details are often buried in fine print. This is particularly important if you have opted for a comprehensive medical cover for the entire family to take care of all your health problems.
The health insurance cost has two components. One, the annual premium you pay for the plan and other the out-of-pocket expenses you pay when you receive medical care in the form of deductibles, coinsurance and co-pays.
As a rule, if you know you have an expensive medical condition requiring frequent visits to the hospital, pick a plan with a higher premium to cover most of your costs.
The following are situations when a higher premium and lower out of pocket cost is desirable
You may want a plan with higher out-of-pocket costs if:
IRDA has mandated that there should be no claim-based loading or increase in premium costs during renewal. While the insurer can still increase the premium based on overall cost inflation and the policyholder moving into a higher age bracket, premiums cannot be arbitrarily increased based on individual medical or claim history. However, this is worth checking.
Based on the above criteria, you can draw up a short list of 2-3 insurers and make an informed decision. You can buy policies online though, as many insurers give discounts on online policies.
Health Insurance is often overlooked by individuals below the age of 35, as they think it’s something they don’t need, but given the rising cost of healthcare, increased stress and health issues caused by sedentary city life, and the increased premiums/extra conditions for older people to get health cover, buying health insurance before the age of 35 is highly recommended.