Your checklist for buying the right health insurance – Forbes Advisor INDIA

It is important for people to understand and accept that health insurance has become a necessity that requires the utmost attention. Rising medical treatment costs and the frantic race to get the best possible treatment at the hospital of your choice are a few important reasons that make health insurance an undisputed winner in the quest for financial security while enjoying the best health services.

Since the outbreak of the Covid-19 pandemic, people have become more cautious about their health. They are aware that if someone is hospitalized and has no health insurance coverage, there is no choice but to forfeit a significant amount of their personal savings. To be precise, this is exactly why health insurance is necessary for everyone.

Things to look for when buying health insurance

There are some common health insurance myths that need to be busted. Many consumers have this false perception that “any” health insurance policy is sufficient or good to cover medical expenses resulting from hospitalization. However, this is not correct.

Often, individuals have health insurance plans that are cheap or have a lower premium than other plans. When purchasing a plan with lower premiums and inadequate coverage, individuals lose out on a plethora of benefits. Some of the main reasons people choose health insurance plans with lower premiums are lower coverage and fewer benefits.

Check sub-limits and co-payments

For example, many plans have a mandatory co-payment clause (where customers must pay a certain percentage of the hospital bill) or a cap on room rent and certain procedures, due to which premiums are weak compared to other plans which do not. have limits. The purpose of having health insurance is negated when you have to pay part of the bill out of your own pocket. In fact, on several occasions, it has been found that the co-payment fee increases from INR 2 lakh to INR 3 lakh in case of hospitalization for major surgery. The same goes for rent caps.

Often, people are unable to find accommodation in the rooms authorized by their mutual insurance company and have to upgrade to a higher category. In such situations, clients have to pay for the additional room charges out of their own pocket, which can be a significant expense when they are hospitalized for a longer duration.

Plans with lower insured capital miss the primary purpose of health insurance

When you choose a health insurance plan with a lower sum insured, the premium for the plan will be low because the risk covered is limited. Apart from this, cheap/cheaper health insurance plans also lack some major benefits that have become unavoidable over the past few years. Some of these benefits include:

  • Home hospitalization cover
  • Coverage for outpatient service (OPD)
  • Day 1 coverage for pre-existing conditions
  • Welfare

Lower amount insured health insurance plans miss the primary purpose of health insurance – adequate financial coverage against hospital costs. Many times limited coverage health insurance plans do not cover the entire hospital bill and the patient’s family members have to pay the remaining bill.

For this, while many people need to dip into their savings, many others seek financial assistance from family and friends. While a family health plan insured by a sum of INR 5 lakh might have been sufficient five to seven years ago; that may not be enough today, especially if you live in a metropolitan city with exponentially high health care.

Also, a lower sum insured is usually sufficient for people staying in smaller towns – Tier 3 towns – where the cost of treatment is considerably low. Today, a hospital stay of four to five days for any common ailment costs INR 70,000 to INR 80,000, while the cost of treatment for more serious ailments can reach several hundred thousand rupees.

Additionally, during the first and second waves of Covid-19, we saw how hospitalization bills for treatment of novel coronavirus infection exceeded several hundred thousand dollars for 12 to 14 days. of hospitalization. In such scenarios, health insurance coverage with insufficient sum insured is always insufficient.

Take out comprehensive health insurance

When purchasing a health insurance plan to cover you and your family members, it is important to understand that cheap or low cost health coverage may not be sufficient to provide comprehensive coverage. to insured lives. This is because it may lack the required sum assured and some key features and benefits which are very important considering the current scenario. A lower premium should not be the only criteria when purchasing a health insurance plan to cover the health needs of you and your family members.

Invest in a well-equipped plan to meet all of your healthcare needs. In fact, over the past decade, with the increase in the number of insurers and the introduction of new-age health insurance plans, the overall price of products has dropped massively. For example, while an INR 5 lakh sum insured plan cost between INR 1,500 and INR 1,700 per month until a decade ago, today you can purchase an INR 1 crore sum insured plan with a monthly premium as low as INR 800 – INR 1,000. All of these bonuses are for a 30-year-old individual living in a metropolitan city.

Monthly Equivalent Payments (EMI) to the rescue for affordable health insurance

Additionally, to ease the burden on consumers, the regular insurance, Insurance Regulatory and Development Authority of India, issued a circular in 2020 ordering all general and specialty health insurers to allow customers to pay the insurance premium -sickness in easy monthly payments. This means that instead of paying the entire insurance premium in a lump sum, customers can now pay the premium in monthly installments.

The ease of paying insurance premiums in EMI has increased accessibility nationwide several fold. Previously, people used to buy plans with lower sum assured by paying the full premium because lump sum (in one go) was difficult for many because low sum assured meant lower premium . However, over the past few months, there has been a drastic change in people’s buying behavior. The share of higher-sum health insurance plans over the past 18 months has increased significantly.

People are buying health plans with higher coverage amount in high numbers not only because the plans can be purchased through EMI but also because the plans are available at affordable prices and are awash with many features and benefits . Comprehensive plans with a higher sum assured generally cover all possible ailments and promise to provide adequate coverage. In such plans, you do not have to pay co-payment costs during hospitalization and the insurer pays for everything.

Additionally, there are no rent caps or sub-limits on specific procedures. You have the prerogative to choose the room of your choice during hospitalization. Some other additional features of comprehensive health plans include day 1 coverage for pre-existing conditions (varies by plan) like diabetes, asthma, and hypertension, exclusive wellness benefits like gym and yoga club memberships, and discounts on renewals to stay fit and healthy.

It is always advised that when purchasing a health insurance policy to cover you and your family members:

  • Don’t just look at the premium and buy a policy. Insurance is a prudent purchase to which the utmost care must be taken.
  • Keep in mind the size of your family, the ages of family members, and your family’s medical history.
  • Ideally, it is always suggested to buy at least INR 10 lakh – INR 15 lakh sum insured for each member of your family.
  • Look for a plan that offers maximum functionality that you can use when needed.

Conclusion

While a majority of people are aware of the various benefits of comprehensive health insurance, a large percentage still view health insurance as merely a tax-saving tool. Many people accept that their main reason for purchasing a health insurance plan is a tax refund on health insurance premiums under Section 80D of the Income Tax Act.

In fact, many are unaware of the various benefits offered by health insurance. Yet, there is still a majority of the population who have health insurance even after being well aware of its many benefits. People forget about the high risk diseases they are exposed to by not buying health insurance. No wonder, according to the report by the insurance regulator, more than 80% of healthcare expenditure in India is paid for out of pocket.

A cheap health insurance plan may not cover all of your health care needs and requirements. So buy smart.

About Evelyn C. Heim

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