Who doesn’t want to secure their family’s well-being? At the end of the day, everyone wants to give their family a good life.
Battling unforeseen health contingencies is easy if you buy the right health insurance plan for you and your family. It works as the best solution to staying financially secured.
But then how do you know if you’re making the right choice while buying?
It’s simple! Read on as this guide takes you through the fundamentals of your health insurance plan.
Health Insurance: A Quick Look at the Nitty-Gritty
For starters, here’s a small snapshot of what is health insurance.
- It’s a comprehensive plan that includes hospitalization expenses
- The coverage for it can be extensive depending on the plan
- As a policy holder, you can opt for reimbursement by submitting the hospital bills. On the other hand, you can also select the cashless facility at network hospitals
- The tenure varies depending on the type of plan you choose. Generally, it’s an annual contract and has to be renewed after a year
- Once you buy the policy, you would have to wait for 30 days before you can avail the benefits
The Real Significance of Health Insurance
No one can really see the future. Today you may the fittest person around. But can you guarantee that you’d still be fit tomorrow? Life always throws unexpected events at you. The best you can do is to be prepared financially.
Thus, buying a health insurance plan only makes sense. It won’t just cover your medical expenses but also relieves you from financial stress at the time of claim.
Popular Types of Medical Insurance Plans
Though there are various medical insurance plans readily available in India, you need to understand the multiple aspects of it. Let’s run through them.
- Individual vs. Family Floater
Do you want to cover each person individually? Or do you need a family floater plan?
With individual health insurance plans, the entire sum insured amount is meant for just one person. Each member is entitled to receive the amount separately during claim.
When it comes to family floater plans, all family members are covered against multiple diseases under this one single cover. But, only one person can make a claim.
Let’s consider this example that explains the difference between the two plans:
You are a family of 4 (self, spouse, and 2 kids). So you can buy an individual health insurance plan with a sum insured of Rs. 5 lakh each. Hospitalization expense of each member would be reimbursed up to a maximum of Rs. 5 lakh. Now what if your hospital treatment bill sums up to Rs. 7 lakh. Your health insurance plan would pay only up to Rs. 5 lakh while you would have to shell the remaining 2 lakh from your pocket.
Alternatively, if you had purchased a family floater plan with sum insured of Rs. 20 lakh, then in this very same scenario, the bill of Rs. 7 lakh would have been reimbursed by the insurer.
Also, with the individual plan, if you had to get hospitalized again in the same year, there would be no further payout from the insurer.
However, with the family floater plan, you would still be having Rs. 13 lakh cover left. This remaining cover could be easily used by you or any of your other family members insured under the plan during the policy tenure.
Family floaters are good. But there are some things you need to know. If you have a high-risk member in the plan who makes the most claims, then the other members would be left without any cover. Old age of any member in the family would only shoot up the premium of a family floater plan.
That’s why family floaters are more suitable for younger families. Here the premiums for family floater plans are comparatively cheaper than multiple individual health insurance plans.
Ultimately, the choice between both plans should depend on the family structure or the age of the oldest member in the family.
- Critical Illness Insurance
- A critical illness plan covers life-threatening diseases including cancer, tumour, etc.
- You don’t have to be hospitalized because once diagnosed, you receive critical illness benefits
- You get the entire sum insured amount at once at the time of claim
- It’s restricted as it only covers few specific ailments
- Since critical illness usually occur in your old age, the tenure for such policies is generally 15-20 years
- Critical Illness Insurance is a fixed benefit based policy
- Personal Accident Insurance
Accidents can happen anytime and anywhere. Agreed?
However, you can still protect your entire family with a personal accident insurance plan.
Personal accident is usually provided as riders to standard medical insurance. In the event of an accident that results in death or disability, the specified sum amount is paid out by the insurance company.
NOTE: A personal accident insurance plan is generally priced nominally as compared to a standard medical policy.
- Senior Citizen Health Insurance
Old age calls for more health ailments. That’s why this type of health insurance is particularly for those above the age of 60 years. It has specific features and coverage that is financially beneficial for senior citizens.
- Maternity Insurance
Cost of pre and post natal care, child delivery, vaccination of new-borns are covered under maternity insurance. This also includes the fees for transporting the to-be-mom to the nearest hospital.
Important Health Insurance Terms You Need to Know
You can’t afford to miss out on these essential terms that you’d come across in the policy wordings. Find out what they mean.
All good things don’t come cheap. Heard this line before?
It’s the truth. If you’re investing in a health insurance plan, you might as well spend a little more but ensure you buy a suitable policy for you. In the quest of saving money, don’t compromise on the essential features and benefits.
Always check the premiums in return for the coverage you receive.
Logically, you get a wider coverage for a higher-priced product. A variety of ailments and scenarios are covered. However, that does not mean all expensive health plans would serve your purpose.
Understand what your medical insurance policy covers. Read the policy wordings carefully and learn its terms and conditions.
Don’t forget that the lower your age at the time of entry in a plan, the lesser are your premiums. And this works as a wonderful reason to buy health insurance now.
- Sum Insured (SI)
This is the maximum amount that is paid to you in the event of hospitalization. This includes procedure or surgery expenses, follow-up treatment after discharge from hospital, room charges ambulance charges etc.
When shopping for health insurance, don’t just blindly select any sum insured amount. Look out for policies that cover all age groups. This could possibly mean from children of 91 days up to elders of 65 years.
Knowing your fitness levels is the key to analysing the ideal sum insured amount. Try to assess you and your family’s lifestyle. If you’ve been following a healthy diet, exercises and are a teetotaller, you’re at less risk. Thus, requiring moderate coverage. If not, you definitely need to consider a high SI.
Ultimately, no matter how much you control your lifestyle, you don’t really have much control over accidents and some diseases.
Apart from lifestyle, even inflation needs to be considered when finalizing your SI amount.
- Room Eligibility Capping
Health insurance policies usually have room rent capping. This means you are eligible to claim expenses up to a certain limit. You would have to bear additional expenses if you choose a room above this cap.
Your insurance cover has a room rent limit of Rs. 4000 per day. But, you chose a room with a rent of Rs. 10,000. Think you’d get Rs. 4000 for room rent while other charges will be compensated to you as per the limit?
In reality, your room rent limit is 40% of the room rent chosen. This means that other expenses will be paid by 40% margin only.
Let’s say your actual bill including doctor fees, nursing charges, disposables, etc. works up to Rs. 20,000. Now even if it’s in the limit, you still get paid only 40% of Rs. 20,000 = Rs. 8,000.
While skimming through the policy wordings, you’d have come across the term ‘Sub-limit’. ‘Deductible’ and ‘co-pay’. Ensure you’re clear about them.
Co-payment simply means that as a policyholder, you’d have to bear a certain percentage of the claim amount. While the rest will be paid by the insurance company. Some health insurance products also have sub-limits for specific diseases.
For instance, even if your sum insured is Rs. 4 lakh, you may just get paid 50% of expenses on a particular surgery.
- Network Hospitals
At the time of hospitalization, you may not have enough money to pay the hospital bills and wait for a reimbursement. What’s the best solution to this?
While buying a health insurance plan, take a look at the list of cashless network hospitals. See if it they are located in the vicinity. Check if they offer services that you often require.
This is also an essential factor if you plan to travel or move cities. After all, you need your health insurance along with you. Note that cashless facilities are available only in network hospitals.
- Waiting Periods, Pre-existing diseases, and Exclusions
Don’t expect your health plan to ‘start ASAP’ just after you buy it. There would always be a waiting period. Post the completion of this period, you’re eligible to make a claim.
The two types of periods are:
Initial waiting period: After buying the policy, for the first 30 days you aren’t covered except if you’re hospitalized due to an accident.
Exclusion waiting period: Once your policy is active, certain procedures and treatments such as cataract, hernia removal, etc. have a waiting period of 2-3 years.
You may have been suffering a medical condition from quite some time. Probably, you have a family history of it. Such medical ailments fall under ‘Pre-existing diseases’. This would be specified in the policy wordings. To avoid rejection of claims, make sure that you disclose all your pre-existing diseases at the time of purchasing a policy.
So before buying a policy, it’s always recommended that you check the policy document for such waiting periods and exclusions. Ultimately, you wouldn’t want to face a setback at the time of claim.
- No-Claim Bonus
Didn’t make a claim during the policy tenure? Congratulations! You have indeed maintained your health! You receive a no-claim bonus discount from the insurer. It means either your sum insured amount increases or the premium is reduced.
- Day-Care Procedures
Generally day care procedures aren’t covered in all health insurance plans. For filing a claim, at least 24 hours of hospitalization is mandatory. It’s always better to opt for a plan that covers maximum number of day-care procedures.
- Pre and Post Hospitalization
Before being hospitalized, you have to undergo diagnosis. Such expenses fall under pre-hospitalization. When you are hospitalized, some part of the treatment goes beyond the hospitalization.
You would require medicines to be taken after follow-up visits to the doctor. This falls under post-hospitalization expenses. Only those expenses relevant to your ailment will be considered under such expenses.
- Free Medical Check-Ups
When buying a health insurance policy, having ‘free annual medical check-ups’ is a good-to-have feature. Such kind of check-ups have no bearing on the premium when it comes to policy renewal.
- Lifetime Renewal
Check if your policy offers lifetime renewal. Generally, most health insurance plans can be renewed for lifelong. This means there is no age limit for renewal. If you’re covering your aged parents in your policy, then this point should be considered.
Well, this brings us to the end of this guide. Remember that health insurance should never be underestimated or ignored. Definitely not at a young age.
Always ensure you read the policy document carefully before buying your ideal health insurance plan. After all health is wealth, isn’t it?
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