How to choose the right health insurance policy

How to choose the right health insurance policy

Buying the correct health cover is no child’s play. And the quantum of complaints received by consumers is testimony to that. Not everyone gets the kind of deal that they are looking at. 

This could mean one of the following two possibilities. One, the insurers are not delivering what they have promised; or two, customers are confused about their needs and what they are getting instead. 

All in all, there is a huge gap between what consumers want and what they are being offered with. The technical jargon that pertains to the various kinds of services that are available further serves to only complicate matters. There are just so many available health covers, and each of them comes with a different name and claim which is supposed to be superior to all others. 

This makes it important to get your basics right before you go on to buy a health cover. 

  1. Individual health plans

These are the traditional health insurance covers. They are also often known as 'medical' informally, though Mediclaim is one brand that offers these services. Individual health plans cover hospital treatment that is provided by the hospital on an in-patient basis and lasts for at least 24 hours. Expenses that are covered under the policy include a hospital room, nursing, surgeon’s fee, consultant fee, blood transfusion, oxygen, and OT charges. However, most of these plans come with certain sub-limits for each of the above categories. They generally do not cover pre-existing diseases or complications that arise from them for the first three to four years of the policy. Moreover, certain conditions might not be covered for the initial period. Generally, an enhancement also takes place every year during which no claim is made. 

  1. Family floating policies

These comprise of a shared individual health plan. Though the benefits here are largely the same, the insurance money can be used for the treatment of any member of the family, and not just a single person. This means that instead of buying an individual insurance plan with a 2 lakhs cover for 4 members of your family, you can buy a family policy for 8 lakhs. This way, in case of need, each member of your family can avail benefits up to INR 8 lakhs, as compared to just INR 2 lakhs each in the first case. This will also help to reduce the amount that you pay from your pocket since this policy has a lower premium. Any individual who becomes the proposer with the spouse, dependent children (up to 25 years of age), unmarried, divorced, widowed daughters, or dependent parents can purchase the policy. 

  1. Critical illness plan

This insurance plan is not meant for an individual or family per se but is meant to be added as an addition to the above. A critical illness plan needs to be bought separately, which makes the way health insurance is sold in the country very questionable. A critical illness plan will provide financial assistance if the insured develops a serious ailment, such as cancer or stroke. Each cover comes with its list of 9-12 illnesses. One can buy this plan either as a stand-alone policy or as a rider attached to the main life insurance cover. In case there is a critical illness, the company will pay the entire sum that is insured and the policy terminates. Additionally, this can happen only once for any particular illness. To get the payout, the insured person must survive for 30 days after the diagnosis. Moreover, no claim can be made during the first three months from the inception of the policy. Both these conditions differ from insurer to insurer though. 

  1. Senior citizen health plan

While most basic medical plans will cap the starting age at 60, SCHPs is for those between 60 and 80 years of age. Most of these come with fixed coverage and can be renewed lifelong or up to the age of 90. People who buy this insurance should watch out carefully since a lot of illnesses and ailments are excluded from the plan. However, these plans could have the option of a critical illness plan. 

  1. Top-up health insurance

Top-up health insurance comes with a mandatory deductible and is cheaper to buy. A deductible is an initial amount that must be paid either from your pocket or through an existing health insurance policy, to avail the benefit for a top-up plan. 

For instance, let us say that you have a top-up plan of INR 5 lakhs, with a deductible of INR 1 lakh. If the hospital bill amounts to INR 1.5 lakhs, you will have to pay the initial 1 lakh from your pocket or your basic health insurance policy. The remaining INR 50,000 will be paid by the insurance company. You could use a top-up plan in combination with a basic health insurance policy to get enhanced coverage at a lower rate. However, make sure that you read all terms and conditions very carefully.