Health Insurance Checklist

Having sufficient health cover should be one of the topmost priority for everyone. There cannot be any compromise on health cover, as any untoward illness without sufficient cover, will have you dip into your investments. Hence, it is always better to have a decent cover in place.

The awareness to have health insurance cover is increasing in recent times. However, many of us do not end up buying health insurance in time, as we are unable to choose the right one.

We have listed a few important points to consider while choosing or upgrading your health insurance.

1. How much cover is sufficient

The biggest mistake that one makes while deciding on the adequate cover is to consider the cost of treatment in only today’s rupee terms. Most of us are healthy today and may require the need for hospitalization only a few years down the line. Therefore, it is very important to factor in medical inflation, while deciding how much cover to take.

For instance, hospitalization costs today range from Rs. 3 Lakh to Rs. 10 Lakh approximately. Assuming you are 40 years old today, at modest healthcare inflation of 8% p.a. for the next 15 years, the same hospitalization will cost anywhere from Rs. 9 Lakh to Rs. 30 Lakh.

2. When to buy

Age and good health, both play an important role in determining if you will get health cover from a good insurance company. A medical test may not be necessary while buying a cover in your early 30s.

Further, the chances of having pre-existing diseases at an early age are less likely. Health insurance policies usually come with an exclusion clause of at least 2-4 years for pre-existing diseases. Therefore, it is better to buy a cover at the earliest and not wait till you get some illness.

3. Choose between an individual or family floater cover

A family floater is a preferable option, as they are more economical than buying individual policies for every family member.

Such policies cover multiple family members under one umbrella policy. You should buy a high cover that can be shared amongst multiple family members. The idea behind buying a family floater is that not all family members will be hospitalized in the same year. Hence, the cover can be utilized by the unwell member of the family for treatment in that year.

However, in case you have an individual in your family who is very old or has frequent health issues, you may consider buying an individual cover for such a person separately.

4. Understand the capping limit clause

Health insurance policies may have capping limits either concerning per-day room rent or the type of room.

For instance, you have a policy of Rs. 5 Lakh, per day room rent capping applicable would be Rs. 5,000 (1% of the sum assured). Now if you get hospitalized and you choose a room that has a rent of Rs. 10,000 per day, you will be eligible to claim only 50% of the rent amount.

This ratio of capping gets applicable to all other charges like doctor visiting charges, medicine bills, etc. So even if your claim is for instance Rs. 4 Lakh which is within the sum assured cover (Rs. 5 Lakh), only 50% of your claim will be settled (i.e. at Rs. 2 Lakh).

Choose a health cover that has no capping or has capping related to room types (single occupancy, double occupancy, etc.) rather than one which has a capping on the amount of room rent.

5. Check network hospitals

It is important to check if all the major hospitals are covered in the insurance company’s network for cashless claim settlement. Also, scan through the list to check if nursing homes in your area or where your doctor frequently visits, are covered. This will help in times of emergencies.

6. Choose an insurance company and advisor

Low premium should not be the only criteria to select an insurance company. It is also important to check the claim settlement record of the company. It is preferable to opt for companies that have an in-house claim settlement process, rather than those that have outsourced the same to TPAs (third-party administrators). This will help in faster and easier claim settlement.

Further, it is always better to buy a policy through an agent, who will help you out with the tedious claim settlement procedure.

7. Review/ enhance the existing cover

Review your existing cover once every 5 years, at least. You may consider increasing the base cover itself or enhancing the cover with a top-up policy, which is a more economical option today.

A top-up policy covers you after the “base limit” is exhausted or used. Let’s say you have a top-up health cover of Rs. 10 Lakh with a threshold limit of Rs 5 Lakh. If your claim amount is Rs 8 Lakh, then your claim of Rs. 5 Lakh will be settled from the base policy and Rs. 3 Lakh from the top-up policy. The top-up policy comes into the picture of claim settlement, only when the threshold limit is exhausted.

The health insurance industry in India has undergone a lot of changes and has been standardized to some level.

Below are some key changes that have taken place in recent times:

• All Health Insurance policies are now mandatorily issued for a lifetime and need to be renewed annually without fail.

• Insurance companies cannot levy claim-based loading once the policy is issued.

• Insurers need to give a clear 3 month advance notification to existing customers before increasing premiums or altering terms and conditions in a policy.

Based on the above parameters, you should evaluate various insurance covers and choose the most suitable option for you and your family.