Health insurance has become an essential investment in today’s uncertain times, providing financial security and peace of mind during medical emergencies. However, not all health insurance policies are created equal, and it is crucial to thoroughly understand the terms and conditions before deciding. This article speaks about 9 crucial elements against which one needs to evaluate the health insurance policies:
1. Room Rent Limit:
This is the most important aspect while shortlisting the Health Insurance Policy. Many health insurance policies have a room rent limit, which determines the maximum amount the insurer will cover for room expenses during hospitalization.
All medical expenses i.e., doctor fee, nursing fees, nutritionist fees, diagnostics test expenses, etc., all are tied up to the room which an individual opts for. If an individual opts for a room whose rent is above the room rent limit allowed in the health insurance policy, then one needs to be prepared to pay from the pocket.
Will try to explain this with 2 scenarios:
|Scenario 1||Scenario 2|
|Room Rent Limit||5,000||5,000|
|Actual Room Rent during hospitalization||4,000||6,000|
|Total Hospitalization Expense||2,00,000||2,00,000|
|Claims Paid by Medical Insurance||2,00,000||1,66,667|
|Expense Incurred by the Insured||0||33,333|
Hope the above helped you in understanding the importance of room rent. Fortunately, most of the insurers are coming with policy where there is no limit on the room rent and one can opt upto single occupancy room during hospitalisation.
2. Waiting Period for Pre-Existing Ailments:
Most health insurance policies come with a waiting period for pre-existing conditions. This means that any health issues you already have at the time of purchasing the health insurance policy might not be covered immediately.
Waiting period can range from 1 year to as high as 4 years. Its important to get clarity on this by looking at the policy wordings before buying the policy. Some insurers nowadays also offer an option to buy back the waiting period and it makes sense in order to do that.
Co-payment is the percentage of the medical bill that you need to bear out of your pocket, even after the insurance coverage kicks in.
This co-payment can be on account of 2 reasons:
- Limit set at the ailment level
- Zone based pricing
In case of Limit set at the ailment level, health insurance company will clearly mention in the policy wordings the amount policy would cover for different ailments and anything beyond that will have to be borne by the insured individual.
In case of Zone based pricing, health insurance policy offers health insurance to individuals at differential premium rates based on their primary location of residence. It’s a known fact that hospitalisation expense in Mumbai or Delhi is any day costlier compared to other cities like Indore of Mysore. Considering this fact, insurer might provide the cover at lower cost to the insured based on the city of residence. In case the insured is hospitalised in cities which fall outside of the zone of the residence, he/she might have to pay anywhere between 10-20% as co-payment.
Details relating to this would be made available in the policy document and one needs to read this very carefully before buying the policy.
4. Additional Sum Insured due to no claims:
The is a reward offered by health insurance providers to policyholders who do not make any claims during a specific policy year. For every year of no claims, additional sum insurance of anywhere between 5% to 50% is offered to the insured. It varies based on policies and insurance providers. Once again, its important to read the policy terms to understand the benefits.
In addition to the yearly additional sum insurance, one needs to also look at what is the maximum amount of cover one can get under this. Most of the policies provide it to the extent of 50% of the basic sum assured, however some insurers are also providing upto 100% of the basic sum assurance.
Deductible refers to the initial amount you agree to pay before the insurance coverage comes into effect. This could be optional or compulsory depending on the policy. Carefully assess your financial readiness to pay deductibles and choose a policy that suits your comfort level.
In my personal experience, I have seen instances where health insurance intermediaries add voluntary deductible amount with the intention of reducing the premium to compete with other insurance policy premiums to win over the clients. If the Insured doesn’t pay attention to this while availing the product, one should be prepared to shell out this money mandatorily during all claims.
6. Restore or Recharge Option:
A restore or recharge option is a valuable feature that reinstates the sum insured even if it’s exhausted during a policy year. This is particularly useful if you have a family or if multiple members are covered under the same policy. It ensures continuous coverage during unexpected medical emergencies.
Primary condition associated with option is that the recharge option would be provided only in case of different ailments. For Example, if an individual has fully utilised the sum assured due to heart ailment and if the same individual gets admitted in the policy year for heart ailment again, restore or recharge option will not be available. If its on account of accident or any other reason other than heart ailment, sum assured amount will be recharged or restored.
7. Treatment Outside India:
If you frequently travel or wish to have the option of receiving medical treatment abroad, ensure that your health insurance policy covers international medical expenses. Check for clauses related to treatment outside your home country and the extent of coverage provided.
8. Organ Donor Expenses Coverage:
Organ transplant surgeries can be financially burdensome. Most of the health insurance policies cover the expenses related to organ donation procedures, such as harvesting and transplant surgeries with certain conditions.
Few conditions which you need to be aware are:
- Claims might not get honored on cashless basis and one might have to get it reimbursed
- Any post organ donation health complication of the organ donor would not be covered under the health insurance policy
- Its only the medical cost associated with organ donation is covered and not the cost of the organ
9. Pre and Post Hospitalization Cover:
Medical expenses don’t always end with hospital discharge. Pre and post hospitalization expenses, including diagnostic tests, consultations, and medication, can form a significant portion of the overall medical bill. Look for policies that offer comprehensive coverage for these aspects.
In conclusion, purchasing a health insurance policy requires careful consideration of various factors. The right policy can provide a safety net during challenging times, ensuring that you and your family receive the best medical care without undue financial stress. By evaluating these nine points and conducting thorough research, you can make an informed decision that secures your health and well-being for the future.
If you are unsure about the complexities of health insurance policies, seek advice from a financial advisor or insurance expert. They can help you navigate the details and find the policy that best suits your needs.
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