Step 1: Analyze what your biggest requirements are
If you are planning to buy health insurance (for yourself or any other family member) first try to find out what your topmost requirements are. Do you need it for some pre-existing illnesses, for availing maternity benefits, etc. and accordingly you should start looking for the policy that is most suitable for you.
For example, if you are buying a policy for your parents who are senior citizens, then it makes much more sense to buy a senior citizen policy for them rather than a regular policy. Senior citizen policies have some facilities, like their waiting period for pre-existing illnesses are lesser than a regular policy, which can be more beneficial for people in that age group.
Step 2: Find out the coverage amount that you would need
The coverage amount of your health insurance must be at least 6 times your monthly salary. For example, if you earn Rs 1 lakh per month, then your health insurance coverage should be Rs 6 lakh.
However, the coverage amount should be determined as per your needs. For example, let’s suppose you have a floater health policy that covers you, your spouse, and your two children, then the total coverage amount should be much higher than Rs 6 lakh (6 times your salary if you earn Rs 1 lakh per month). This is simply because as the policy covers 4 people, the coverage amount should be higher so that each member gets adequate coverage.
Step 3: Try to understand the exact coverage offered:
Once you are sure about your top-most requirements for health insurance and the coverage amount that you need, it’s important to look at a few key factors while deciding which policy you should buy.
Here are the 4 things that you should look at while comparing different health insurance policies.
1. Inpatient hospitalization:
When a person stays in a hospital for more than 24 hours it is called in-patient hospitalization. All health insurance policies provide high coverage, i.e. upto 100%, for in-patient hospitalisation. Look for a plan that will provide you maximum coverage.
2. Day-care treatment:
For some procedures or treatments like chemotherapy, cataract, dialysis, etc. a patient does not require to be hospitalized for 24 hours. These procedures/treatment can be completed within a few hours in the hospital and they are termed day care treatment. Look for a plan that covers the maximum number of daycare facilities.
3. Room rent allowance:
Some health policies (not all) put a cap on the room rent. It may be fixed like Rs 2,000/Rs3,000/Rs 4,000 or 1% of the total coverage amount, i.e. if your total coverage amount is Rs 6 lakh then your room rent eligibility would be Rs 6,000. Look for a policy that does not have a cap on room rent, and if there is then find out what exactly is the cap amount.
4. Pre and post hospitalization coverage:
The expenses that are incurred before and after hospitalization are usually covered by health insurance as pre and post-hospitalization expenses respectively. Usually, health insurance covers 30 days and 60-90 days for pre and post-hospitalization treatment. Read the fine print of the policy to understand what is the exact coverage in terms of pre and post-hospitalization.
Step 4: Know about the waiting period, co-payment clause, exclusions, and sub-limits
1. Waiting period:
The waiting period is a hibernation period during which you cannot make any claim for your health insurance policy. Now there are three kinds of waiting periods. First, usually, there is an initial waiting period of one month when you cannot make any claim against your policy. Second, there might be a one-year waiting period for certain illnesses/procedures like cataract, appendix, knee surgery, etc. and during this period you cannot claim health insurance for these illnesses/procedures. Third, there might be a three to four year waiting period for pre-existing conditions.
Understand the clauses and what are the illnesses/procedures that have waiting periods before buying a policy.
2. Co-payment clause:
Some health insurance policies come with a co-payment clause, in which the insurance company pays a part of the medical expenses, and the rest is paid by the policyholder. The ratio of how much to be paid by the insurer and the insured differs from policy to policy.
Since we are talking about the waiting period and co-payment clause, it is important to note here that in the case of senior citizen policy, these two things are interrelated.
Now, we have already mentioned earlier that usually, the waiting period for pre-existing conditions in senior citizen policies is lower. However, there is nothing called a free lunch. For those policies that come with a lower waiting period for pre-existing illnesses does come with a co-payment clause.
A policy might come with caps on certain procedures/illnesses/facilities, and these caps are referred to as sub-limits. For example, there might be a cap on room rent, child-birth, cataract for each eye, etc. Learn about them while comparing different health policies.
When a health insurance policy does not cover certain procedures/illnesses they are referred to as exclusion. However, the exclusions are always mentioned in your policy papers.
Step 5: Find out the cashless hospitalization network of the health policy
When the insurer directly settles the medical expenses incurred by the policyholder with the hospital, it is known as cashless hospitalization.
More or less, all insurance companies today have a cashless facility. So the important factor to look for here is not the total number of hospitals they have cashless facilities with, but whether the insurer has the cashless facility with the topmost/best hospitals in the city.
Step 6: Learn about enhancement facilities of the coverage amount
Owing to the increasing healthcare costs, it is important to have enough health insurance coverage for each member of your family. And what might be sufficient for today, might not be enough tomorrow. So it is important to find out whether your coverage amount can be increased through NCB and restoration facilities.
1. No claim bonus: For every claim-free year, insurance companies reward the policyholders by increasing the coverage amount or decreasing the premium amount. Through NCB, a policyholder can increase his/her coverage amount up to 50% at the same premium level over the years.
2. Restoration: If a policyholder exhausts his entire coverage amount during his/her treatment and requires more, then the insurer will pay the additional amount without charging any additional premium. This facility is called restoration benefit for increasing coverage.
Terms and conditions for both NCB and restoration differ for different insurance companies. Make sure you understand them well.
Often people make the mistake of buying a health insurance policy by looking at the coverage amount for the lowest premium amount. Of course, the premium amount is an important factor to consider while buying health insurance but along with it also ensures that your policy fulfills all your requirements.