Health insurance is a vital part of financial planning. It provides a financial cushion and protection against medical uncertainties. A person who purchases a health insurance policy is called a policyholder. By paying a fixed, regular amount called 'Premium,' the policyholder can secure a larger amount of money called 'Sum Insured,' which is used to pay for medical emergencies or treatments.
Thus, health insurance helps you pay medical expenses without breaking your savings or investments. With the rising costs of medical treatments, having a health insurance plan becomes crucial. It can help you afford the best healthcare services without straining your savings.
Many types of health insurance plans are available in India, each for different purposes. A few to name are:
Individual health insurance,
Family floater health insurance,
Group health insurance,
Senior citizen health insurance,
Maternity health insurance.
With these diverse alternatives and many companies to choose from, deciding which health insurance is suitable for you can often be challenging. But we will help you. This article will explore the key factors to consider when Choosing Health Insurance Plans in India.
Factors to Consider When Choosing Health Insurance Plans
Choosing the right health insurance plan requires careful consideration of several factors. These factors help you pick a suitable health plan by carefully assessing your healthcare needs, financial capabilities, and other personal circumstances.
Here are some key factors you should consider:
2.1 Coverage
One fundamental parameter to consider is the plan's coverage. Coverage includes both the financial and medical elements. A plan should have a sufficient amount that can be used as compensation and include a wide range of medical treatments, such as hospitalisation, pre- and post-hospitalisation expenses, deposit-hospitalisation, and critical illnesses.
Additional medical-related elements could include benefits like ambulance cover, maternity benefits, and coverage for alternative treatments.
Tip: Compare different plans to understand the coverage benefits provided and select the one that aligns with your requirements. Many policy comparison tools are available online to fulfill this need.
2.2 Premium
The premium is the amount you pay the insurance company to keep your policy active. A good plan offers comprehensive coverage at an affordable premium. Comparing different plans based on the premiums and benefits can help you make an informed decision.
Tip: The earlier you buy health insurance, the more likely you are to get comprehensive coverage at beneficial premiums. This is because, as we age, we are more prone to diseases.
2.3 Claim Settlement Ratio and Amount Settlement Ratio
The Claim Settlement Ratio (CSR) is the percentage of claims settled by the insurance company against the total claims received. A high CSR indicates the insurer's reliability and the likelihood of your claim being settled.
Another crucial parameter similar to CSR but often overlooked is the Amount Settlement Ratio (ASR). While CSR refers to the number of claims that an insurance company settles, ASR means the total amount of claims settled by the insurer.
Tip: An ideal insurance company has a CSR of 95-99% and an ASR above 80%.
2.4 Network Hospitals
Most insurance companies have a network of hospitals where they offer cashless treatment. Check if the insurer's network includes reputed hospitals in and around your locality. Also, determine if your preferred hospitals and doctors are in their network.
Tip: Read the list of network hospitals covered in the policy before purchasing it. Alternatively, if you visit one or two hospitals frequently or as a practice, you can check with the hospital authorities about the insurers they are tied up with.
2.5 Waiting Period
Health insurance policies usually have a waiting period clause for certain diseases and treatments. During this period, you cannot submit a claim for treatments related to those conditions. The shorter the waiting period, the better it is.
Tip: If you or your dependents have any pre-existing diseases, it is essential to go through the policy terms and conditions to understand if your disease is subject to any waiting periods.
2.6 Co-payment
Co-payment is a clause where you agree to pay some of the medical expenses. While this could lower the premium, it would mean higher out-of-pocket costs when you make a claim.
Tip: Read the policy terms and conditions and consult your insurance provider and financial expert.
2.7 Renewability
Choose a plan that offers lifetime renewability. This ensures that you can renew your plan without any age limit, providing you with continued coverage in your old age when you need it the most.
Tip: Consult your financial expert to clarify other continuing benefits, such as the no-claim bonus and unlimited restoration benefits. It is important to pay your premiums regularly so that the policy doesn't lapse.
2.8 Pre-existing Diseases
If you have any pre-existing diseases, ensure your insurance policy covers them. Usually, there is a waiting period before coverage kicks in.
Tip: It is wise to have an annual health check-up to have better control over your health conditions. Also, it is wise to be open and not conceal any facts related to medical history.
2.9 Room Rent Limit
Another important but overlooked clause is the room rent cap. Some insurance policies cap room rent. If you opt for a room with a rent higher than the cap, you may have to pay the extra amount.
Tip: Choose a policy without a room rent cap, or if it does, ensure it offers a higher capping so that you don't end up settling for less at the time of hospitalisation.
2.10 Additional Benefits
Look for additional benefits like complimentary health check-ups, wellness benefits, and discounts on premiums for a healthy lifestyle.
Conclusion
Choosing the right health insurance plan is a crucial decision that requires careful thought and consideration. By considering these factors, you can select a plan that offers you the best coverage at an affordable premium. Remember, the goal is to secure your health without straining your finances.
FAQs
Why is health insurance important in India?
Health insurance provides financial protection against medical expenses, ensuring that you can afford quality healthcare without depleting your savings. With rising medical costs, it’s essential for managing unforeseen health emergencies.
What should I look for in terms of coverage when selecting a health insurance plan?
How does the Claim Settlement Ratio (CSR) affect my choice of insurance provider?
Why is it important to consider the insurer’s network of hospitals?
What is the significance of the waiting period in health insurance plans?
How does co-payment affect health insurance premiums and claims?
What is lifetime renewability, and why should I choose a plan with this feature?