How to pick good Health Insurance Policy? | Buy Health Plan to reduce Medical expenses

Not only in case of health insurance but before buying any kind of insurance policy, you should ask yourself a question. Is your financial condition enough to bear the loss happening in the form of life, asset, or money? Can you easily overcome those situations without stretching your budget? If you can, then you can skip insurance. But except for some HNI persons, handling these situations is not easy and this unforeseen event directly affects your saving and budget. Therefore it is better to insured our unforeseen problems by paying a small premium.


Let’s understand the Importance of Health Insurance with below example

= Mr. X (age 25) gets admitted to the hospital due to any reason.

 

Without Health Insurance

With Health Insurance

Remarks

Hospital expenses if hospitalized once in life

Rs. 2,00,000

Rs. 2,00,000

Least condition

Hospital expenses if hospitalized 3 times in life

Rs. 6,00,000

Rs. 6,00,000

Worst condition

He has to bear

Rs.6,00,000

Rs. 1,92,500

*Approx

Premium Rs 5500 x 35 yr (6 lakh coverage)

*Premium used in this Illustration is approximately; it may differ from company to company

Here we can see that taking health insurance is much cheaper than paying from our pocket directly. Not only this, you would have tax benefits too. However, if you are sure that you and your family members are immune to all diseases and none of them will see the hospital gate in their whole life then you can skip this step.

I hope you have understood the importance of Health Insurance and making mind to buy a policy as soon as possible. Now I am going to tell you certain points that will be helpful to you while buying Health Insurance policy.

Points to be remembered while buying Health Insurance

Compare before buying: You can compare premiums on various online web portals like policybazar.com etc. which help you to choose suitable plans according to your need at affordable premiums.

Floater or individual plan: Health Insurance Company provides two types of plans.

  • Floater plans for the whole family: This plan provides you with sharing coverage amount for the whole family. Suppose there are 4 members in your family and by paying 10,000 rupees you are getting coverage of rupees 5 lakh, then anyone in the family can use up to 5 lakh rupees. This plan is beneficial for family as premium is low due to sharing coverage and chances of getting ill all family members simultaneously in the same year is very low.
  • Individual plans for a single person: This plan is for a single person. You will get whole coverage for yourself only.

Instead of including in floater plans, it is better to buy a separate policy for your parents as including them in the floater plan results high premium due to their age factor.

Claim settlement ratio: Before choosing any company you can check their claim settlement ratio. This ratio tells the percentage of claims the insurer has paid out during a financial year. Many new companies may attract you by offering low premium therefore you should check their claim settlement ratio along with affordable premium.

Geographical location: check with how many hospitals they have tie-up so that we can get cashless treatment facility at the time of emergency. Companies offer reimbursement facilities too if you hospitalized in the hospital with which they don’t have a tie-up. Generally, this situation arises due to the non-availability of tie-up hospitals in your location. Therefore always check the list of tie-up hospitals because paying from the pocket at the time of emergency is worthless and insignificance when you already have health insurance.

Not more capping or subheads: Health insurance companies implement capping or subheads on different medical expenses. It means they pay not more than a certain amount for some particular service like hospital bed per day expense, ambulance, etc. Before buying insurance we should read all these hidden terms and conditions.

Pre and post hospitalization expenses: We have expenses not only during hospitalization but pre and post hospitalization expenses too. Many companies doesn't cover pre and post-hospitalization expenses. Avoid such companies.

Disease coverage restriction: Not all diseases are covered by Health Insurance companies. A full list is provided by them or it is also available on their websites. Read the list of diseases before buying a policy.

Waiting period Existing disease: Earlier pre-existing diseases not covered by companies, but now due to competition companies are covering pre-existing diseases too with the condition that they will cover certain diseases under the policy after a certain period of time. So if you are already suffering from any disease and you didn’t buy policy earlier, no need to worry, just check the waiting period for existing disease. The less waiting period, the more beneficial to you.

No claim bonus: If you don't claim in the current year then some insurance companies offer you a no claim bonus for the next year. It is generally in percentage. The company gives you bonuses either in the form of increased coverage amount or less premium amount.

How much cover: By keeping mind the rising in day to day medical cases and expenses, at least Rs 5 lakh insurance coverage is necessary to each individual. However, you may increase the coverage amount according to your need.

I hope this article will be helpful. If you have any doubt or queries feel free to write us.


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