Most of you reading this piece know that you need medical insurance. And you may be planning to get one in near future. But like many you too might be getting cold feet by the choices the insurance market offers. A normal, rational individual cannot understand and distinguish between such choices.
Reality of Health Insurance Market in India
The fact is it takes an episode of hospital admission and another episode of using a policy to figure out how much understanding is required to buy a health insurance plan. Health insurance companies introduce words like pre-existing exclusions, sub-limits, and deductibles in the policy that you would have never known before.
It is at the time of the episode that you realize that as per the policy you are required to pay a part of the bill that you thought would be fully taken care of by your insurance company. In the end, despite having a health insurance plan to your name, you end up spending out of pocket.
Buying health insurance plan that works
However, this piece is not about how the Indian market is fragmented and how you need to pass through many turmoils to buy a decent policy. This piece is about helping you buy health insurance plans that work for you.
To buy a health insurance plan in India that works you’d need to understand dense disclosures in insurance policies. You’d need to know for a fact that you need your own individual cover for the exponentially rising medical costs. A week-long hospitalization in a big corporate hospital can easily set you back by Rs. 6 to 7 lakhs even without undergoing major surgery.
5 steps to buying health insurance plans that work for you
The first step — Figure out the kind of health insurance plan you need
So, it’s all good and you’ve decided to buy a health insurance cover. Your first step should be to figure out whether you require an individual policy or a family floater one.
Below are some suggestions:
● If you are a nuclear family, you may go for a family floater plan
● If you are a young single adult, you may step out of your family plan and start your own individual health insurance cover
● A senior citizen couple may take either individual covers or a family floater plan based on the pricing
The second step — Estimate how big a cover you need
Your second step should be to determine the sum insured amount that is right for you.
Your health insurance cover depends on two things:
● The city of your residence
● The kind of medical facilities you’d need for yourself or your family
If you live in one of the large metros and you are looking for a five-star hospital experience, you’d need at least Rs. 25 to 50 lakh family floater policy. For those living in smaller towns or having lower expectations from their hospital, a lower cover of Rs. 10 to 25 lakh will do. Note that a Rs. 5 lakh base policy is a must for your family no matter where you live.
The third step — Zero in on the health insurance company
The third step is the most difficult part of buying health insurance. There are 28 health insurance companies in India offering over 100 plans.
Many individuals look at the price of a health insurance policy while making a decision. But know that price is the least important parameter you need to assess before making a buying decision. The more important parameters are the benefits of a policy and the claim settlement history of the company.
The fourth step — Decide on the benefits you would like to have in your policy
Look for these five basic benefits in your policy:
1. The waiting period for pre-existing exclusions is not more than a year. Your policy should pay up claims on your pre-existing diseases at least after one year of buying the policy.
2. No sub-limits on rooms. The complete room rent of the room used for your hospitalization should be paid up by your company. Many policies cap the room rent. So, even when you have a high cover, your policy doesn’t pay your complete hospitalization bill because medical service costs are linked to room rents.
3. Restoration of sum insured in the event of claim.
4. Benefit of no-claim-bonus for every claim-free year.
5. Benefit for maintaining good health.
The fifth step — Ascertain the claim settlement history and customer service of the company you’ve chosen
After making sure the benefits you need are in place in your policy, is when you look at your company’s claim service record. Check how prompt your company’s customer service is and how soon they address customer complaints.
Keep in mind these three pointers to ascertain your company’s claim service record:
● Your company settles 95% or more claims
● Your company settles claims within a month period
● Your company has 30 or fewer complaints per 10,000 claims
After being sure of a company’s claim settlement record and useful benefits it offers is the time to consider the price. Shortlist policies based on these two parameters and then buy from the company that is offering a better price.
Also, in the times of COVID-19, you have an option to buy an additional health insurance plan like Corona Kavach health insurance policy or Super Top Up health insurance. Corona Kavach health insurance policy is an indemnity-based plan specific to Coronavirus. While Super Top Up health insurance plan increases your sum insured, which can be use