8 things to know before buying a Health Insurance!
Why Health Insurance? Uncertainty is the biggest truth of today’s rapidly changing world.
One major thing that falls under this category is a medical emergency. It can occur anytime, anywhere and affect an individual financially. Regular health insurance plans take care of the hospitalization expense, which is typically the biggest expense in any medical treatment.
People who buy are either those who want to get tax benefits or those who get it free through their company policies. Health insurance is now considered to be a key factor in one’s financial life.
It is known by everyone that medical expenses are just going to increase with coming time, so having the right health insurance is a need to deflect a financial calamity. However, health insurance plans vary according to the different insurance provider, so let us know certain facts before buying health insurance which can make it all worth it.
- Medical Declaration: When you fill in the Proposal Form the major part is a declaration, by not disclosing a pre-existing condition you’re at risk of claim rejection for any circumstances that has took place as a result of, or could be connected to, an undisclosed condition. It is also sometimes found that agents or advisors tend to take your signature and fill the rest on their own. This can also lead to claim rejection which can be avoided by filling in the declaration form as honestly as possible and once the proposal form is accepted the claim rejection chances reduces to its maximum.
- Waiting Period for Pre-existing disease: Once you confirm any pre-existing disease in your declaration form, then it’s essential to look at the pre-existing disease clause or the waiting period mentioned by the Insurer. Generally, the waiting period happens to be 3 to 4 yrs, but now we can buy a rider by paying some additional premium amount and reduce it to 1-2 years. There are few policies which are offered without any waiting period, such policies are a good choice for any senior citizen.
- Co-pay: If your health policy has a co-pay clause, it means a part of the medical expenses incurred is paid by you and the insurer will cover the rest.
For instance, if there is a medical bill raised of Rs.2,00,000 and the policy has an agreed co-pay clause of 80-20 ratio then the insurance company will be liable to pay Rs.1,60,000 and the balance to be borne by insured i.e Rs.40,000.
It is advisable to make sure that policies bought have minimum co-pay or no co-pay clause mentioned. Generally, policies taken by senior citizens have co-pay but with the same premium range, no co-pay policies are also available.
- Claim ratio: Mostly people tend to look at the premium of the policy, whereas the important thing to look is at the claim ratio of the policy. It indicates the intent of the company about paying the claims to their buyers.
- Health check-ups: With the rapid change in lifestyle, weather and food choices that are taking place around us, it is a mandate given by doctors to have health checkups at least once in a year. However, the increasing cost for the same de-motivates many of us from taking this step. We suggest choosing a policy which includes a yearly or semi-annually health checkup cost covered in it. This would not only help you to keep a check on your health but also give you a feel-good factor of getting something in return for the policy premium you pay unlike otherwise.
- Extra benefits: These days certain companies, provide features like claiming for your doctor’s visit, maternity cover, dental cover, optician cost, yoga, gym, aerobics, dance classes, gym instruments, physiotherapist and many more ways used to keep you healthy.
So these are the additional features which can be taken into consideration before finalizing on health insurance and buy as per your needs.
- Bonus Booster: We forget to consider the inflation rate while buying the health insurance policy. Supposing a policy worth Rs.2,00,000 Sum Insured bought in the year 2005 is not claimed for next 12 years, then the Sum Insured as on date would be 3,20,000 (on 5% No claim bonus year on year) whereas the treatment cost is costing you nothing less than 7-8 lakhs today.
Does this suffice your needs? What does it mean?
It is essential to buy a sufficient amount of cover required and your bonus booster should be such that your Sum Insured should be doubled in case of no claim for continuous 3-4 years. (No claim bonus should be at least 25% of your Sum Insured)
- Restore facility: Now health insurance policies come with restore benefit riders, if your Sum Insured gets exhausted towards the treatment of an illness, the insurer restores your Sum Insured.
For example: If you have a family of 4 or more and you have bought a family floater plan worth Rs.5,00,000 of Sum Insured and one of the members consumes Rs.4,00,000 for the treatment then the consumption amount left is only Rs.1,00,000 for the rest of the members if fallen ill.
Whereas, if the policy had a restore facility rider then the Sum Insured would have restored back to your original Sum Insured amount of Rs.5,00,000. This helps in case of multiple claims in the same year in the same family.
Choose your health insurance by keeping your needs in mind; don’t buy a policy because you have been told that this is the best one. Take proper advice from your financial planner in terms of comparing the products available in the market in case you are not able to decide.
It is said, “You don’t know what you have got until it’s gone.”
Yet the truth is, “You knew exactly what you had; you just thought you would never lose it.”
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