A Buyer's Guide to Health Insurance Plans

 What exactly is meant by Health Insurance?

A Health Insurance plan is nothing but protection that is offered to a person to get one’s expenses reimbursed or directly paid by the best Health Insurance company. 

There are two types of Health Insurance Claims: -

Reimbursement Claims

Let’s assume person A is hospitalized, the entire bill is paid by person A, and the insurance company repays the amount to person A. In this case, the expenses are reimbursed. 

Cashless Claims

The second possibility is that the insurance company directly pays the hospital expenses to the hospital. This is usually done via a cashless payment mode.  

Why should a person have a Health Insurance plan? 

Let’s understand the top five reasons why a person should have a Health Insurance plan:-

1.    The most important asset is an intangible one, the person’s health. Having a Health Insurance plan ensures that the person is prepared for a scenario like surgery or hospitalization.

2.  To prevent personal savings from being wiped out.

3. To deal with medical inflation, the cost of medical care changes, affecting the medical bills.

4. To fight lifestyle diseases like diabetes, obesity, etc.

5. Insure early to save money - The premium is lower if a person insures themselves earlier.

Difference between Health Insurance and Mediclaim

Mediclaim: This was originally introduced to cover only hospitalization expenses. 

Health Insurance: Health Insurance in India covers the expenses before, after, and during hospitalization. 

In the current scenario, there is very little difference between the two, as in some cases like Mediclaims offered by companies, in cases of Group Mediclaims, the expenses before and after Hospitalization could be covered up to a certain time as well, on a case-to-case basis.

Things to know before buying a Health Insurance policy 

1.    Cashless treatment - This is useful for people who do not have surplus cash available for spending.

2.    Network of hospitals - One should ensure that the hospitals covered in the policy are close to the place of residence.

3.    Coverage Pre-hospitalization and post-hospitalization expenses - Things like the cost of tests and physical therapy could be covered in the Insurance policy

4.    Claim Settlement Ratio - If the ratio is 95%, that means out of 100 policy claims, 95 were settled, one should ensure the Health Insurance policy has a high claim settlement ratio.

5.    Availability of daycare, maternity facilities coverage.

6.    Restoration benefits - If the Insurance coverage limit is used up, the restoration limit can be utilized for cases like a family insurance policy, as applicable.

7.    Insurance cap: In the policy clauses, one should check if specific cases have an amount cap that can be claimed.

8.    Waiting period: One should check if there is a waiting period for specific diseases.

9.    No-claim bonus: In case the Insurance policy has no claims against it for a specific year, the insurance company may offer a lesser premium, which is known as a no-claim bonus. 

Things to avoid while buying a Health Insurance product

1.    Not checking the type of Insurance product before buying it- Buying an investment product vs a protection product here makes a lot of difference.

2.    Hiding pre-existing conditions/diseases - This could mean the claim can get dishonored at the time of policy claim, and the specific person's account can get blacklisted as well, meaning a higher premium may have to be paid to renew the policy.