Buying a health care policy in no way guarantees that you will be reimbursed for any ailment or surgery unless you have made sure to pick the right policy.

Sourabh Kothari, a 42 year- old, Kota based pharmacist, got his wife operated for kidney stones at a hospital in Jaipur. Despite having a health insurance policy that covered his wife, he was not satisfied with the way he was only partially reimbursed by his health insurer for all his expenses during the hospital stay. Thus, it is imperative that one does their homework well, prior to choosing a health care policy to avoid disagreements at the time of reckoning.

The biggest mistake people make when it comes to buying a health care policy is purchasing it simply based on its price. The cheapest policy is not necessarily the best. There is a need to dig deeper and do a complete check to arrive at the policy that provides the best set of benefits for the premium being charged.

The benefits a policy can provide and the cover it offers depends on the premium one would have to pay, which differs from one individual to another. But there are a few key features that should be evaluated to ensure that you are purchasing the best possible policy for yourself.

Exclusions

All health insurance policies have a set of defined exclusions which are a set of conditions and ailments that the insurer would not cover. Most policies don’t cover injuries or ailments caused by war, attempted suicide, activities like racing, etc. by comparing multiple policies, you can ensure that the policy you pick doesn’t have a wider set of exclusions than the norm.

Waiting period

Most policies have a waiting period for pre-existing diseases which vary from one another. This ensures that the conditions you have at the time of buying the policy will not be covered by the insurer. Comparing policies will give you an idea of the shortest waiting period. Procedures that don’t need immediate treatment such as hernia and cataract have waiting periods in all policies. A policy with a shorter wait time must be sought out.

Sub-limits

Many policies include sub-limits associated with distinct expenses such as room rent, surgery and ICU stay. One policy might dictate that room rent above 1% of the sum assured per night would not be reimbursed. This would mean that a policy with a sum assured for Rs. 2 lakhs would only be reimbursed up to Rs. 2,000 for the room rent. The policy document needs to be carefully studied for sub-limits because the type of room occupied would also end up affecting the overall cost of the procedure. In case your policy has a low sub-limit on rent but you decide to stay in a better-quality room, a large portion of the cost would fall on our shoulders.

Network of hospitals

It is always better to choose a health insurer who covers a large network of hospitals where one can avail of cashless facility. This point gains more importance if you live in a tier 2 or 3 town. It is imperative to find out whether important hospitals in the vicinity fall under the purview of your health insurer.

Renewability

Multiple plans provide lifelong renewability and it is best to opt for them. Even though the Renewability of Health Insurance Policies guidelines dictate that the health insurer must renew the policy except on grounds of fraud, moral hazard or misrepresentation, it is nonetheless very important to scrutinize the terms and conditions of each policy. Particularly, whether the renewal premium is guaranteed based on age slabs or is subject to revision must be checked. In case of the latter, one must find out the circumstances under which the premium can be revised. For example, if in a year the premium is high, it could be revised in the subsequent years. Insurers can only revise the premium over and above that change in an age slab if there has been an upfront disclosure of it being done.

Loading

A lot of places have renewal taking place prior to loading. That is, the insurer will not hike the premium even if a claim has been made in the previous year. One the other hand, there exist policies that would hike the premium if a claim has been made. Among the latter type, a few specify the percentage of loading to be done based on the quantum of claim. It is always advisable to fully understand the detailed terms and conditions of loading before making an informed decision.

Co-payment

This states that the policy holder must pay a certain amount of the claim while the balance is borne by the insurer. A plethora of policies exist in the market; some without a co-payment requirement, some having a provision for co-payment above a certain age and others having a co-payment requirement only if treatment is done in anon-network hospital. This requirement also comes into play when policies are priced differently based on their geographical location; lower premiums for smaller towns and cities and higher ones for metros. If the policy is purchased in a small town but treatment is availed of in a metro, the difference might have to be paid by the client. Several policies with lower premium unpleasantly surprise their clients by requiring them to co-pay.

No-claim bonus

Many insurers offer this feature by creating a hike in the sum insured if a claim hasn’t been made in the previous year. Choose insurers who offer 10% of higher no-claim bonus as this will aid in keeping pace with medical inflation.

Claim settlement ratio

IRDAI, the regulatory body for insurance publishes claim settlement ratios of all companies. This number must be checked prior to choosing a policy.

Pricing

Upon doing a recon of several policies, there might be multiple that meet your needs. As the point, a price comparison must be done and the product meeting your budget should be picked.

In addition, policy documents should be downloaded from the Internet and thoroughly read and reviewed before arriving at a decision. If this isn’t possible, websites that state the ratings of health insurance policies must be scoured. Such websites make use of varied criteria to score policies and arrive at a composite score. Thus, due diligence must be given before zeroing in on an appropriate health insurance policy.

 

–          by Mr. Amar Pandit, CFA, is the Founder of HappynessFactory.in