How to choose a health insurance policy

In today’s world, the importance of having insurance cover, especially health insurance, is well known. As healthcare costs are seeing a steep rise, without a health insurance cover, any type of hospitalization will leave a hole in your pocket. So, the earlier you get a health insurance cover, the better that would be for you, as with growing age the premium of a policy also rises. Along with that, the waiting period of 3-4 years for certain ailments that most insurance policies have will also be over at an early age.

Amit Jain, President- Personal lines, Bancassurance and Affinity and Marketing, Liberty General Insurance, says, “Youngsters, who are in their prime of health, usually do not feel the need for health insurance. However, with increasing sedentary lifestyles and environmental factors like pollution and stress, there has been a proportionate rise in health issues, which if not addressed immediately may get complicated in the future. The current pandemic has raised awareness about the need for health insurance in supporting hospitalization and managing medical inflation.”

However, experts say before opting for any health insurance plan, first-time buyers should keep a few things in mind. For instance, if you are looking for a new policy, first identify your needs for a health policy. It is so because health risks vary from person to person, hence the cover also varies. Identify your needs on parameters like gender, age, work-life, family history of illness, area of residence, etc. You will need to analyze such specific risks before zeroing down on a policy.

Buying a policy at an early age ensures that policyholders’ pre-existing diseases are covered. This is because most insurers cover pre-existing diseases after a waiting period. Hence, for policyholders, it’s important to understand the waiting period after which the pre-existing ailments are covered. Jain says, “Opting for a health insurance policy early reduces the likelihood of getting rejected or ending up with limited coverages at a higher premium or with extended waiting periods for existing illnesses.”

At the same time, the policy should also be bought from a reputable insurer with a good settlement history, as the settlement ratio shows the claims settled by an insurer.

The Indian market has a variety of policies, which becomes confusing for most buyers. According to experts, one should look for policies that offer a cumulative bonus. Also known as No Claim Bonus (NCB) that leads to annually increasing the sum insured by a certain per cent for not making a claim in the policy during a policy year. In addition, Jain says, “The accumulated no claim bonus can be utilized later on for a major claim or at an older age without any additional cost.”

Sub Limits of an insurance policy are also important criteria. For instance, if a policy has sub-limits, then the policyholder will have to pay the amount from his/her own pocket above the limit. Usually, room-rents in the case of hospitalization have sub-limits. If the room-rent in your policy is capped at Rs 2,000, you will have to pay any amount over and above that, as the claim will cover only up to the sub-limited amount.

Thus, it is advisable to purchase an individual health insurance policy at a younger age to hedge against pre-existing diseases and to enjoy a comprehensive insurance cover against all illnesses at an older age.