The current pandemic has made one thing clear – the importance of health insurance. Anecdotal evidence suggests that the treatment of Coronavirus has cost many people their life-savings. It has been observed that rising inflation has also led to a spike in the cost of quality preventive healthcare and medical treatment. In order to effectively deal with this issue, a large number of average middle-class families are in search of affordable solutions. Today, the treatment for even a minor health issue may drain off your financial savings to a great extent. A one-stop-solution to such problems is to have in place a comprehensive health insurance policy.
A health insurance plan covers you and your family against substantial medical expenses that may incur due to hospitalisation. Despite several advantages of having health insurance, people usually ignore it. Many a time, they believe that the health cover, their employer provides is enough for them. However, how many of them actually go and ask their HR head to provide the details about the health cover provided? Do they even check if it is adequate to offer protection against some unknown diseases or even take care of major surgeries?
At times, there might be a situation when the employer-provided health cover doesn’t cover a lot of things, which you would otherwise get from the health plan options available in the market. Also, once you change the employer, you are no longer covered with that particular health policy. Hence, it is always recommended to have a health insurance cover in spite of your employer’s health plan in place. That being said, choosing an appropriate health plan is really important. In this article, we will help you to understand the parameters that will help you in choosing an appropriate health plan.
Kind of Plans
There are broadly two kinds of health insurance plans, indemnity plans and defined-benefit plans. Indemnity plans are those that reimburse hospital expenses and defined-benefit plans are those that pay a lump sum amount irrespective of the actual hospital expenses. The indemnity plan could be individual health insurance or a family floater policy. One must consider having this in their insurance portfolio.
Further, you should understand which indemnity cover would suit your requirements. An unmarried individual seeking a health cover can opt for an individual health cover. However, for those who are married and have children, it would be wiser to consider a family floater plan. Remember not to add your parents in your family floater policy as it considers the elder members’ age in order to calculate the premium. Rather, buy an individual policy for them and also consider, building a health corpus for them. This is because when they grow older, the premium charged would be at the higher end.
There is no thumb rule on how much health cover you need. This would ideally depend on a number of factors such as income, residing city, family illness history, etc. For instance, a person living in a Class A metro city may require a policy of Rs 10 lakh on account of the higher cost of living. Not just the standard of living but even the medical treatment in metro cities is on the higher end. However, for a person residing in Class B and Class C cities, an individual cover of Rs 5 lakh may be sufficient.
These days, most of the health plans have sub-limits attached to them. Sub-limit is nothing but capping the limit of reimbursement under some of the cost heads. For instance, the room rent is capped at one per cent of the sum insured. This means that regardless of the total sum insured under this policy, one has to pay the hospital bills from one’s own pocket till it doesn’t cross the imposed sub-limit. Not all health plans have such sub-limits but there are a few health plans that offer an option to add sub-limits while buying the plan. Therefore, do check whether your plan has the imposition of any such sub-limits. Frankly speaking, opting for plans not having any sub-limits is ideal even if they charge you with a high premium.
A majority of the health policies cover pre-existing diseases but only after a period of 48 months. However, there are some that cover them after 36 months or even less than that. Therefore, while buying a policy, it is vital to disclose any pre-existing ailments. This will ensure a smooth claim settlement process. Further, there are certain defined ailments that have a waiting period of 12-24 months, post which, claims can be made for such ailments.
Though you may not find the co-payment clause in all the plans, such a clause is more evident in a health insurance plan. As you grow older, the premium rates increase and in such a situation, co-payment may act as a relief in terms of affordability as it will aid in keeping the premiums low. If the treatment is done through a non-network hospital, some plans do ask for co-payment as high as 20 per cent.