Everything about Health Insurance you should know before you buy one

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Health-related expenses are skyrocketing with each passing day. Unplanned hospitalizations can cause a rift in your financial savings. Hence it is best to get a health insurance policy.

With the vast amount of insurance providers in the market, you can easily buy online health insurance policies. But for someone stepping into adulthood, or for someone unaware of the insurance sectors, certain terms and conditions can seem confusing and overwhelming. Here are 10 insurance-related things that you should be aware of before buying a policy.

Types of Health Insurance Policies

Firstly you must be aware of the different types of health insurance policies available in the market

    1. Individual health insurance policies In an individual health insurance policy, you can cover yourself, your spouse, children, and parents. Each person will get an individual Sum Insured amount, i.e. if you opt for an individual health insurance policy for Rs.5 lakh then each member that you have enrolled in this policy will be covered for Rs.5 lakh. The premium for this policy is comparatively higher.
    2. Family floater health insurance –  Under this policy, a single sum insured amount will cover for the entire family. If you opt for an Rs.5 lakh family floater plan, then the entire Rs.5 lakh only will be available for whoever you have enrolled in the plan. The premium will be lower.
    3. Group health insurance This is mostly aimed at employers who want to take a group health insurance policy for their employees. It covers hospitalization expenses related to an accident, illness, critical illness, psychiatric illness, and maternity, for each employee.
    4. Senior Citizens Health Insurance – This policy is specially designed for senior citizens aged 60 and above. It covers for accident or illness, pre and post hospitalization, treatments,  Domiciliary Hospitalization, and Psychiatric benefits. However, there will be an upper age limit for people enrolling in this policy.

Sum Insured

Sum Insured is the amount for which the insurance company insures you, i.e. this will be the amount that insurance company will provide you with when you file a claim. Choosing the right sum insured is important while buying a health insurance policy. Too much low sum insured might not sufficiently cover your health expense. Too high could lead to a higher premium.

  • Premium and Coverage – Premium is the fees you have to pay to the insurance company for providing you with the sum insured. The premium for the policy depends on
    1. The type of insurance policy you opt for
    2. Any co-payment opted
    3. Deductibles
    4. Extra Add on covers
    5. To forgo waiting period in case of pre-existing illness coverage.
    6. Medical background of the policyholder
    7. Age of the policyholder

      The coverage pertains to the scenarios for which the insurance policy will cover you with the sum insured. For example, the insurance policy will cover expenses related to accidental hospitalization, illness treatment, etc. but might not cover for hospitalization without a doctor’s recommendation. The insurance companies will explicitly mention the scope of the coverage. Read through it carefully before purchasing the policy.

  • Deductibles – Each health insurance policy will have a deductible amount associated with it. The total amount that you will get from your insurance company will be the sum insured minus the deductibles. For example, if your policy has Rs.20,000 as the sum insured amount and the deductible is Rs. 1000, then when you file a claim, you will only receive Rs 20,000- Rs 1,000= Rs 19,000 from your insurer.
  • Cumulative Bonus – Cumulative Bonus is the bonus amount offered by the insurance company for all the years that you haven’t filed a claim.  This bonus might either be a discount in the next premium amount or an increase in the sum insured amount (depends on the insurance company). If you don’t file a claim in consecutive years, the bonus amount will also increase. You can also transfer this bonus when you are switching to a new insurance company.
  • Annual health checkup – Opt for an insurance policy that offers a yearly health checkup coverage. This will cover expenses related to checkups that you can take annually to monitor your health status.
  • Waiting period – Certain benefits in your insurance policy will only come into effect after you have completed the waiting period. For example, if you have a pre-existing condition like diabetes, then you might have to wait for 3-4 years, and only after that can you file a claim for medical expenses related to your diabetic condition. Different companies will have different waiting periods for each type of illness. The waiting period will also be applicable for maternity cover as well.
  • Pre-existing illnesses and its cover – Pre-existing illnesses are the diseases that you already have while buying the policy. These include those illnesses that have been diagnosed by the doctors four years prior to buying the policy. They include severe conditions like cancer, kidney failure, asthma to diabetes, blood pressure, etc. If you do not declare them at the time of buying the policy, your claim can be rejected by the company. Most of such illness would have a waiting period, and only after that can you claim the benefit.
  • Copayment – When you opt for a copayment for your insurance policy, you will have to bear a portion of the medical expenses. Only the rest will be covered by the insurer. In such cases, the premium you will have to pay will be lesser. Some insurers make copayment a mandatory clause, whereas for others it is optional.
  • Cashless claim – Cashless claim facility is when the insurance company will directly pay for the expenses rather than you having to pay out of your pocket (provided the expenses are within the sum insured bracket). To opt for a cashless facility, you will have to be admitted to hospitals that have tie-ups with the insurance company, and you will have to take prior approval with them. In other cases, you will first have to pay the bills, submit the necessary documents with the insurer, and then get the money reimbursed.
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