How to Choose the Best Health Insurance Plan and Steps to Choose the Best Health Insurance Policy

Checklists are everywhere. Like that piece of paper you see behind the washroom door in your office or the airline co-pilot who checks off his chart and gives the “let’s fly” thumbs up to his crew. Health Insurance or Mediclaim Policy is a big decision with a number of variables to consider. And here we will present a checklist with 5 of the most important variables that you need to consider that will help you identify the best type of health insurance plan that suits you the most. Before we get started make sure you read the complete article to know the basis of Health Insurance. Let’s get started.

1. Buy a health plan that fits your top requirement. Health insurance has evolved dramatically over the last 10 years in India with a range of insurance products with different features and specifications. There are health insurance products suitable for students, for couples, for young families, for senior citizens, for people with heart diseases, for diabetics and there are even plans for people who have already been diagnosed with cancer. It is difficult to get lost in choices so your first aim should be to identify your number 1 need.

Is it coverage for any existing illness that you already have? Or is it coverage for maternity and child birth as you are planning to get married and have a child? Or is it the availability of treatment abroad? Once you are clear about this, you can then decide about the coverage that you need. While there is no established thumb-rule, it is a good practice to go for a minimum of 6 times of your monthly salary. So if your salary is 50,000 rupees – you should consider a plan of minimum 3 lacs rupees and can go upto 5 lacs rupees of coverage.

• Find a cashless hospitalization network which covers the top hospitals in your city Point blank. You cannot opt for a health insurance plan which does not offer a cashless service. Cashless service means you can have your medical treatment done without having to pay the bills yourself and the bills are directly settled by the insurance company with the hospital. And while all insurers offer cashless service, not all hospitals are part of the insurer’s cashless networks.

In fact, of the 50,000 odd private hospitals in India, insurers offer cashless service in anywhere from 4,000 to 8,000 hospitals. Since cashless is a pretty good thing to have and the cashless network varies from insurer to insurer, Please do ensure that you look through the insurer’s cashless hospital list and ensure that your city’s most popular hospitals are available in that list.

Also Remember to look for the best hospitals in city and not merely the total number of hospitals in your city because 90% of all hospitalization is planned which means you want to go for the hospital that offers the best healthcare.

• Read the fine print and seek out the exact coverage offered. There are 5 main components to any policy coverage –
  • First – In-patient hospitalization coverage which is pretty much the reason for buying a health insurance plan which is the maximum amount upto which you can claim against hospital expenses.
  • Second – Day care treatments are procedures that take less than 24 hours at a hospital like in the case of cataract, tonsils, chemotherapy, liver biopsy, kidney stone removal etc. Here, look for a plan which covers all day-care treatments without restrictions or plans which cover a high number of day care treatments.
  • Third – Room Rent is the cost or type of room that shall be allocated to you as per the plan chosen. Now, some plans have no capping on room rent, some offer a single private room and some allow a limit of upto 1 or 2% of your sum assured. So on a 3 lac cover, a 1% allowance on room rent will give you a maximum room eligibility of 3,000 rupees which might not be sufficient. It is important to know which type of room or what is the maximum allowance on a hospital room so that you can plan your insurance needs accordingly.
  • Fourth – Pre and post hospitalization refers to the reimbursement of any expenses prior to and post discharge which are directly attributable to the illness or injury for which the policyholder was admitted. You might typically see a pre and post hospitalization eligibility of 30 and 60 days respectively but some plans put limitations on the coverage amount. You might want to check for these and stick with plans that offers you the most coverage on this.
  • And finally, your coverage may have some sub-limits. A sub-limit is a cap on how much a policyholder can claim. For example – we saw a sum-limit of 1% on room rent. Similarly, some plans have sub-limits on certain procedures like cataract might have 10,000 rupees per eye. Maternity expenses always have a sub-limit with a cap for normal deliveries and a separate cap for caesarean deliveries.

So, these 5 elements – in-patient hospitalization, day care, room rent, pre/post hospitalization and sub-limits of certain procedures form the core of your coverage which you should examine carefully while considering any health insurance plan. Generally health insurance companies offer a lot more features – like daily allowance, domiciliary hospitalization, companion benefit, physiotherapy allowance etc. – but we have kept these aside as these are definitely not need-to-have coverages.

• Examine the plan’s waiting period, co-payment and exclusions. Waiting period is a sort of a hibernation period during which any claims made will not be admissible. The key waiting period you need to look for is for pre-existing illness if & only if you have any existing illness. Some insurers offer a 4 years waiting period, some 3 years and some even offer a 2 year waiting period. As a rule, lower the waiting period, the better it is. Additionally also look out for co-payments which are a share of the claim that needs to be paid from your pocket. Co-payments are generally triggered in senior citizen or specific need plans so it is important to read the policy wordings before buying one.

• Identify benefits that enhancement your sum assured. The cost of medical treatment is on the rise and hence, it is wise of us to look for health insurance plans which enhance my coverage over time. This is done in two ways – First. No Claim Bonus or NCB as it is popular called is a way by which insurers reward policyholders for having a claim-free year with an increase in sum insured ranging from 5 to 50% at the same premium. This way you can accumulate enough no claim bonus to increase your sum insured by upto 100%. Different insurers have different rules on applying NCB but have a check on this.

The second way by which insurers enhance sum insured is through a feature called restoration. Under this benefit, if you were to consume your entire sum insured then the insurer would add some more coverage without taking any additional premium for any claims which are for an unrelated illness. Like NCB, there are different rules for different insurance companies so do read the policy wordings or take help of your insurance agent for more in-depth understanding of this concept. All in all go for policies which have a good NCB and restoration benefit, and there you have it.

If you push the core of your health insurance research around the 5 steps we just explained, there is no reason why you won’t have with you a very powerful health insurance plan. It is also important to mention some variables that did not make our top 5 list such as OPD expenses, world-wide cover, wellness services, health check-ups and in-house claim settlement.

These might be important in some scenarios but come into the fray only after the top 5 considerations are satisfied. An hour of research on the internet also should be good enough to arrive at which health insurance plan might be the one for you and will save you a lot of heartburn, metaphorically speaking, in the future. If you liked this Article, please do share it with your friends, And.. don’t forget to check out our more articles.

Thank you for Reading.