This week, we tackle the topic of health insurance. Fun? Probably not. Necessary? YES! It always is easier to ignore issues that make us face ours and our loved ones’ unexpected health issues. We shove it at the back of our mind, convinced that nothing bad will happen to us and even if something were to happen, we’ll be able to deal with it at the time. But optimism isn’t enough. Planning for the unexpected, could just be.
So, what is it that we need to know about health insurance?
For starters, why do we need health insurance? It seems expensive, feels like a lot of work to choose and there’s a chance we may not even use it. When we or our loved ones fall sick, we want the best care to ensure a full recovery. Medical care, especially private medical care, is expensive. When sick, instead of focusing on getting better, the uninsured are scrambling to make sure that they can actually afford the treatment. This can be avoided by getting health insurance early on and making small premium payments. We can’t foresee any medical emergencies, but we can definitely plan to be covered for them.
So when should we get health insurance? The easy answer is sooner the better, ideally from birth. While the chance of being affected by a major illness when we are young is low, the earlier we buy insurance, the cheaper it gets when we are older. The No Claim Bonus can double our insurance coverage. Simply put, the cost of insurance can be halved as we get older.
That brings us to the question of how to select a health insurance plan that covers our needs. Many of us select a plan like we would a match on a dating app. Check out the picture, the bio, if they check our boxes, we swipe right or swipe left otherwise. Similarly, for health insurance, we check what they cover, what the payouts are, if it works, we opt for it or else move to the next. But just like when we date, not only do we need to know a lot more about them than a carefully drafted bio, we also need to consider our own needs and wants.
Provisions that should drive our selection of a health insurance policy:
We need to understand the fine print and check the insurance company’s take on the following provisions.
Pre-existing disease:
Check the waiting period for the pre-existing disease. It’s usually around 2-4 years. But select the one that has a lesser waiting period.
Pre and post hospitalisation expenses:
Policies usually offer cover for medical expenses 30 days prior and 60 days post hospitalisation. Select a policy which offers maximum number of the days of this cover.
No claim bonus:
This is provided for a year in which we don’t claim insurance against any illness. The percentage varies from 10-50%. Select the plan that offers more.
Co-payment discount:
In-order to pay lesser premium on the policy, sometimes there is an agreement between the insured and insurance company to have mutual payment (share some percentage of total claim amounts). Read the terms and conditions of this closely and select wisely.
Network hospitals:
Select an insurance company who is affiliated with an extensive network of hospitals in the area where we can claim cashless facility.
Room rent:
Opt for policies where there is no maximum limit on room charges.
Premium:
A lower premium always reduces the benefits provided by the policy. Look at other factors before opting for a policy with a low premium.
Exclusions:
Select a policy with the least number of exclusions.
Inclusions:
Check if the policy includes important medical expenses such as maternity benefit, dental expenses, mental illness, OPD expenses like physiotherapy, etc.
However, selecting an insurance policy goes beyond just having health insurance. We also need to determine how much coverage should we get? This needs to account for health care inflation, roughly said to be 10% in India, amongst other factors. While there is no maximum limit, a minimum coverage of ₹5 lakhs per individual is a good start.
Factors that determine the amount of coverage we need:
1. Our family’s medical history
2. The city we live in
3. The hospital we would turn to for medical treatment. Do some on field research and visit the hospitals to get an idea of
a. The cost of treatment for accidents, bypass surgery or any illness that is prevalent in our family history
b. The cost of the room we would stay in as the cost of treatment will be proportionate to the type of room we choose.
4. The members of our family
a. Aging parents
b. Young children
Now, that we know what we need, when we need it and what we want, we should know our options on how to buy a health insurance policy. Just like the innumerous dating apps, we have a plethora of health insurance aggregator websites that entice us with comprehensive comparisons between policies, low premiums and other offers. But as it is always preferable to meet someone special through a friend instead of an app, it may also be wiser to buy a policy through an agent instead of directly online. The agent will explain our options, break down the fine print and help us select a health insurance plan that is best suited for us and our family. The agent also plays an integral role in filing a claim, making sure we send all the required documents with our claim form and resolving any query from the insurance company.
Even though there are plenty of fish in the insurance company sea, buying health insurance is a commitment we all must make, to take better care of ourselves and for our peace of mind. So let’s take the plunge and make the smart choice for ours and our family’s healthy future.
