Whether funded by employers or individuals, hardly 20% people in India have health insurance cover. That is when government sponsored social security is almost non-existent, and health care cost has become beyond the reach of even middle-class families in India.
It is imperative that whoever can afford, should buy health cover, and the good thing is that there are a number of health policies available in the market to choose from. And the process to select a good health plan has also become easy with the advent of digital technology which allows you to compare different health plans online and let you opt for what suits you the best.
However, while choosing a health plan, you must keep certain points in mind otherwise you may not get good value for your money and end up incurring additional cost in the event of going to a hospital.
All retail health insurance policies sold in the country today come with lifelong guaranteed renewal. This is an important clause as this helps you to get coverage when you need it most. However, some plans that are sold under a group umbrella, like a bank or an association may or may not fall within these definitions. With lifelong renewal clause as part of your policy, your policy will be renewed every year and you can enjoy the benefits of the health plan for a longer time.
No Claim-Based Loading
It is generally believed that if you have made a claim in a policy year, then at the time of renewal of the policy, you will have to pay an additional amount on account of premium loading. Such claims-based loading of premium on renewals used to exist till about 3-4 years ago but have since been eliminated from the market by the regulator. Today health insurance policies cannot charge any individual customers a differential premium based on their claims experience. Any change in premium has to be for a larger set/sub-set of renewing customers completely unhinged on whether they made a claim or not. So, now you can be sure of not paying any additional cost incorporated within your premium at the time of policy renewal.
Room Charges Restrictions
Some health insurance plans have capping or sub-limit provisions. Read these carefully so that you are not taken aback when you do not get as much claim as you would have thought. These sub-limits can confine your claim amount at the time of payout. Let's take the example of room rent, in case the insured person opts for a room with higher rent than the permitted amount. For example, for a policy of sum assured Rs 4 lakhs, where with 1% room rent capping the hospital charges you Rs 8,000 for the room when your limit was of Rs. 4,000 per day, the insurance company will pay you at only Rs 4,000 per day on your medical bill. Worse, the rest of the medical charges are also apportioned in the same ratio as hospitals typically charge based on room categories. As a result, the overall claim amount paid may be only a proportion of the original bill. In the above example, presuming the overall bill from the hospital was for Rs 2 Lakhs, the claims amount paid by the insurer could be only around 1 Lakh.
Consumables are not included
In a hospital, certain items are called consumables. These may include water, bandage, hand glove, antiseptic lotion, cotton, and other toiletries. Insurance companies generally do not pay for these. Although these items may not constitute more than 5% of your total hospitalization bill, still check out what all items are covered by your plan and what not.
You can port your policy
If you would like to change the insurer or plan for any reason while carrying forward your earned benefits, you can do so today under the aegis of portability. Today you can port your policy from one insurer to another provided that you do this at the time of your policy renewal. You can carry along all your credited benefits from your previous policy to the new one. The premium structure and other terms and conditions of the new policy, except the waiting period, are however offered by the new insurer (under their available plans and underwriting guidelines) and hence may differ somewhat. You will, however, have the choice to obtain these counter-terms and then decide whether you would want to 'port' your policy from one insurer to another. This process can be initiated from about 45 days prior to the renewal and needs to be completed within 30 days of expiry of current policy term. Also, should you not want to port owing to not getting favorable terms, you can go back to the first insurer and renew the policy with continued benefits as long as this is done within 30 days from the expiry of current policy.
(Yashish Dahiya is the Co-Founder and CEO of Policybazaar.com)