8 features you must compare before buying a Health Insurance Plan
A health insurance plan popularly known as 'Mediclaim' has become inevitable in today's era of sky rocketing medical expenses. And if you don't have one of your own, then you may end up shelling out huge amount from your pocket.
Knowing the importance of health insurance for your family is just the starting point. A step forward - and an important one - is selection of an ideal health insurance plan, when there is gamut of them available today. Some of them have really unique features, but there are some common features available in all policies which you must compare before finalizing any health insurance plan.
Let's have a look at 8 features you must compare before buying a Health Insurance Plan:
- Sub-limits on Room Rent
Room Rent is one of the major expenses you have to bear if any member of your family gets hospitalized; so some general insurance companies cap the maximum amount that they will pay under their health insurance plan. Generally such limit is to the extent of 1% of sum assured and in case of ICU (Intensive Care Unit) the maximum limit is 2% of sum assured. But there are various general insurance companies which do not have any maximum limit on room rent, so you should look for such health insurance plans.
- Pre-Existing Diseases
Pre-Existing Diseases are those which you are suffering from before opting to buy a health insurance plan, and therefore insurance companies do not cover them from day 1 of your policy. They have a waiting period ranging between 2-4 years in which they will not be liable for any claim arising on account of your pre-existing disease. Therefore you should look for health plans which will cover your existing disease and have the least number of years of waiting period.
Co-payment is a clause in health insurance plans that requires cost-sharing by the policyholder. Cost sharing is the specified percentage of the admissible claim amount. Let's take an example to understand it better. Suppose you have a health insurance plan which has a 20% co-payment clause; so in case you are hospitalized and your claim amount is Rs 1 lakh, then you as an insured would be liable to bear Rs 20,000 (Rs 1,00,000 * 20%), while the rest i.e. Rs 80,000 would be settled by the insurance company. Hence, ideally you should look for health insurance plans which do not have any co-payment clause at any stage of your life.
- Network Hospital
Network hospitals are those which have a direct tie up with your health insurance company; so in case of a claim you can avail the cashless facility. Cashless facility saves you from the headache of settling the bill amount with the hospital, as insurance companies directly settles your bill on your behalf. Hence in such a case, you do not have to file for the reimbursement of claim due to insurance company already haven settled the claim. You should ideally look for health insurance plans which have the maximum number of network hospitals, and more importantly, maximum number of good network hospitals in your city.
- Pre & Post Hospitalization Expenses
Pre-Hospitalization expenses are those expenses which are incurred before you are hospitalized while Post-Hospitalization expenses are those which are incurred after you are hospitalized. Pre-Hospitalization expenses are generally covered for minimum of 30 days while Post-Hospitalization expenses are generally covered for 60 days. But there are insurance companies which cover pre and post hospitalization expenses for more number of days as well. So you should look out for health insurance plans which cover you for maximum number of days of pre and post hospitalization period.
- No Claim Bonus
Health insurance claim only erupts in the year of hospitalization, in the years where you've been in pink of your health (by God's grace), the insurance companies also provides you with a no claim bonus. This has an effect of increasing your sum assured in next renewal of the policy. Such bonus can range between 10-50% for a claim free year. Hence you should look for a policy which provides you highest no claim bonus.
Once you buy a health insurance plan, you might feel relaxed that you have covered you and your family against any possible hospitalization in future. But if you don't go through the exclusion section of your policy, then you might get surprises at the time of claim. So before finalizing on any health insurance plan go through its exclusion and select the one which has least number of exclusions and are clearly defined.
Premium you would pay is a vital aspect you should consider while buying a health insurance plan; but mind you, it shouldn't be paramount in your selection process. Just think, you buy a health plan with a very low premium without even taking into consideration the features of the policy. At the time of claim you learn that the insurance company is not liable to reimburse you as the cause for which you were hospitalized was not covered under the policy. So you should be well aware of all the feature, or else you may find yourself in a soup with a huge hospital bill to be paid, amid times where you just recovering with your health conditions or God forbid, yet ailing.
PersonalFN believes that, if you compare at least the above mentioned features while selecting a health insurance plan, then you may not regret having made wrong choice in the future. We also believe that you should buy it from a reliable insurance agent rather than directly from the insurance company, as there is no difference in premium between direct and regular plans. Also an insurance agent can assist you at the time of claim.
It is noteworthy that medical emergencies can erupt anytime. Hence, it is important to have an adequate health insurance cover, which can help you financially manage medical emergencies better. It is noteworthy than having an optimal insurance coverage, is integral in the exercise of financial planning, which helps you to put your personal finance in order and aids you achieve long-term financial goals.
PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.
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