While there has been a significant increase in overall life expectancy, the number of diseases affecting people has also risen alarmingly. With the booming cost of healthcare services and the increasing rate of medical inflation in the country, accessing the right medical treatment has become very difficult and it can burn a hole in your pocket. One of the best ways to make yourself financially secure against uncertain health risks is to have a medical insurance plan.
Further in this article, we have explained 4 thumb rules you should follow to make an informed decision while purchasing the medical insurance plan. However, before proceeding further, let’s under what is a health insurance policy.
What is a Health Insurance Policy?
A health insurance policy is a contract between the insurance holder and the health insurance provider, wherein the insurance holder needs to pay a fixed amount of premium to the insurance company in return for the coverage offered by the insurance company for the incurred medical expenses. The medical insurance policy offers coverage for daycare, hospitalization, pre & post-hospitalization, etc. The insurance holder might pay the medical treatment bill first and get it reimbursed from the insurance company. In case the policyholder chooses the cashless service for hospitalization, then the insurance company will directly settle the medical bills with the hospital. The terms and conditions may vary from insurer to insurer.
Let’s take a look at the simple tips to follow while purchasing the right medical insurance.
Buy Medical Insurance That Suits Your Top Requirement
These days, the insurance company offers an extensive range of health insurance policies to cater to the various requirements of insurance buyers. Nowadays, you can either choose an individual health insurance policy or go for a family health insurance plan as per your requirement or suitability. Moreover, if you want to provide financial security to your parents against unwanted medical expenses, then you can also purchase health insurance for senior citizens.
With an array of plans available in the market, choosing the right plan can be a herculean task. Thus, the first thing you should do is to identify your main requirement. Do you need health insurance coverage for any pre-existing illnesses? Or for the availability of abroad treatment or you want coverage for childbirth and maternity. Once you identify your needs, you can decide the type of coverage you want.
Find Cashless Hospitalization Network Covering Best Hospitals in the City
Cashless service means that you will not need to pay the medical bills yourself for your medical treatment. Under the cashless hospitalization facility, the medical bills are directly settled by the insurer with the hospital. Even though all the health insurance companies offer cashless hospitalization services, not all hospitals in our country are a part of insurance companies’ cashless network. In Fact, in India, the insurance companies offer the facility of the cashless network only with 8,000- 4,000 hospitals out of 50,000 private hospitals.
Thus, while purchasing the policy, make sure that you check the list of the cashless hospital network of the insurer to find out whether the best hospitals in your city are covered in the list or not. To ensure good medical treatment go for the hospitals that offer the top quality health care services.
Examine the Plan’s Co-payment, Waiting Period, and Exclusions
It is important to read the prospectus of the health insurance policy thoroughly to understand the co-payment, waiting period, and exclusion of the health insurance plan. The waiting period of the time period for which the policyholder must wait before all or some of their coverage comes into effect. This clause is only applicable in the case of pre-existing illness. As a basic rule, the lower the waiting period is, the more beneficial it will be. Moreover, you should also check the co-pay clause of the policy, which means that you will need to pay a share of the claim from your pocket. The co-payment clause is mostly seen in health insurance for senior citizens or in case of specific needs. Also, don’t forget to check the exclusions of the policy. Make sure you check the healthcare expenses and medical conditions that are not covered by your medical insurance policy. Thus, it is crucial to read the fine print of the policy before making an informed decision.
Identify Benefits That Increase Your Sum Assured
With an increasing rate of medical inflation, it is wise to choose a health insurance policy that enhances the coverage over time. There are two ways this can be done. First is the no-claim bonus (NCB) and the second is restoration.
A no-claim bonus is a benefit offered to the policyholder in their health insurance policy. It is a way by which the insurer rewards the insurance holder for having a claim-free year. The no-claim bonus works in two ways:
- Cumulative benefit where the coverage amount of the policy increases if the insured has a claim-free year and the premium of the policy remains the same
- Discount on Premium, where the premium amount of the policy decreases by a specific percentage for every claim-free year; however, the coverage amount of the policy remains the same
Different insurance companies have different rules for the no-claim bonus.
Restoration for Additional Coverage
Under this benefit, if you need to use the entire sum assured during the treatment/hospitalization and still need more, then the insurance company will add more coverage without taking an additional premium. Therefore, make sure you read the policy documents in detail while purchasing the medical insurance policy.
Wrapping it Up!
If you follow these thumb rules while purchasing a medical insurance policy, then you will be able to find the most beneficial plan that fulfills all your criteria and ensure the financial security of you and your loved ones against any type of medical emergency.