best health insurance practices

Best Health Insurance Practices to Follow Online in India

Health insurance needs are different for each individual. With the internet full of various vendors trying to promote their policies, finding the right health insurance plan quickly becomes overwhelming.

If you’re ready to pick an online health insurance plan, note that it’s important to know some of the best practices in order to select a plan that suits your needs. Some such best practices include: 

  1. Always buy health insurance plans that meet your requirements
  2. Always buy separate health insurance policies for senior family members
  3. Buy health insurance at an early age
  4. Understand the claim settlement process at the time of buying a policy
  5. Buy health insurance smartly, reduce premium
  6. Be aware of important clauses in health insurance policies
  7. Compare health insurance plans before buying
  8. Keep a check on the renewal date
  9. Beware of health insurance fraud

Common mistakes to avoid while looking for Health Insurance plans online

Apart from following the best practices, you also need to be cautious and avoid making common mistakes while selecting your Health Insurance plan. 

Here are some such mistakes that, if avoided, will set you up for a healthy and a secure future! 

  • Buying a policy without looking at exclusions
  • Hiding medical history
  • Thinking of insurances as just a ‘tax-saving tool’
  • Insufficient coverage
  • Not going through the policy documents
  • Not comparing different quotations, coverages, and premiums.
  • Overlooking the sub limits/deductibles
  • Ignoring the claim process
 

Related Blog: A Layman’s Guide to How Health Insurance Works

Always buy health insurance plans that meet your requirements

This is part of financial planning wisdom. The health insurance market is replete with policy options. It is quite easy to end up with the wrong policy that may not be fit for you. Therefore, when looking for a health insurance plan, the first thing one must do is to assess their needs.

  • Do you need a policy that allows you to increase the sum insured over the years? Do you want a policy that allows maternity coverage? Do you need a policy that has add-on facility for critical illness?
  • Once you have decided the kind of plan you need, calculate the sum insured requirement. This will vary with your age, nature of job, number of dependents etc.
  • Experts say that sum insured should be equal to 5 or 6 times a person’s monthly salary. For example, if the monthly salary is Rs 80,000, the sum insured should be at least Rs 4 lakh or more! 

Always buy separate health insurance policies for senior family members

At the outset, it is advisable to have a family floater plan as it provides more coverage to all family members at an affordable rate. However, it is best to buy separate individual health insurance plans for senior parents.

The reasons to follow this practice are many: buying separate health insurance plans for senior parents is cost effective as the premium for a family floater plan is typically calculated based on the age of the oldest member. You end up paying more for the same cover just by including a senior citizen in the floater.

Buy health insurance at an early age

When it comes to financial planning, starting early is the key. This includes insurance, too. Young people, often, live in the false belief that nothing can ever go wrong with their health. But it is always better to buy a health insurance plan when they are fit, healthy and young. There are many benefits of buying insurance at an early age:

  •  A health insurance plan of Rs 3 lakh sum insured that costs you a premium of Rs 5000 at the age of 25 would come at a premium of Rs 7000 at the age of 35. This number will keep escalating as the age increases.
  • Young people can get a more comprehensive health insurance policy. The chances of pre-existing diseases are less and hence the diseases diagnosed at a later age can be covered in the same policy, as the waiting period would have ended.
  • Health insurance plans offer tax benefits under Section 80D. The earlier you buy insurance, the earlier you can start getting the benefits of tax saving.

Understand the claim settlement process at the time of buying a policy

According to a survey, 69.2% of customers surveyed were not satisfied with the claim settlement process. What could be the reasons for dissatisfaction?

  •     Extended process with demand for thorough documentation
  •     Delay in claim settlement
  •     Partial claim settlement due to unclear clauses
  •     Rejection of claims due to discrepancies in information by policyholder

The reasons for issues in the claim process can be many. Quite often, there is a delay in submission of claim from the policyholder’s side.

Sometimes, ineligible expenses may have been claimed and may have to be excluded. The insured may be guilty of not disclosing a pre-existing health problem or hereditary predisposition.  All these can be valid ground for rejection and may make you wary of the claims process.

It is important to understand all the clauses related to the claim process mentioned in your policy document. Put each and every point under the microscope before you buy a policy, so that you do not have to worry about it later

Buy health insurance smartly, reduce premium

If done properly, health insurance can provide many benefits. Affordability plays a key role in our choice of health insurance. But did you know, if bought smartly, you can reduce the premium and make your health insurance purchase more affordable? Let’s see how you can do it:

  •  Buy a family floater plan instead of a separate individual policy for each family member. This will ensure lower premium and a larger sum insured.
  •  Go for a high deductible amount. There are two types of deductibles – mandatory and voluntary. Having a high deductible would mean that you would have to pay premium only for the amount over the deductible amount.
  •  Buy a long-term health insurance plan. This means paying premiums for multiple years together. This can considerably reduce the premium amount by way of discounts.
  •  No-claim bonus. When buying a health insurance plan, ensure that it offers a no-claim bonus as it can increase the sum insured with every no-claim year. NCB is given where there is no claim in a year. While insurers do not discount the premium, they offer a higher health cover as NCB.

Be aware of important clauses in health insurance policies

Every health insurance policy document has all the clauses mentioned in detail. Clauses vary from company to company and plan-to-plan, hence it is essential to go through important clauses that might affect you. Some of them are:

  •  Renewability clause: does an insurance plan have life-long renewability or does it have an age limitation? 
  •  Sub-limit: sub limits are pre-specified limitations or caps on certain expenses like room rent and anything above that can be claimed.
  •  Co-payment: usually, health insurance plans for senior citizens have co-payment clause, which means the policyholder has to pay a part of the claim.
  •  Reasonability clause: an important clause, reasonability clause defines reasonability and necessity of expenses incurred and these are at the discretion of the insurer. 

Compare health insurance plans before buying

Comparison of health insurance plans before buying helps you make better decisions and to avoid purchases that you may later regret. Health insurance plans should be compared for these parameters: 

  •     Sum insured
  •     In-patient hospitalization coverage
  •     Pre and post hospitalization coverage
  •     Daycare treatment
  •     Domiciliary treatment
  •     Ambulance cover
  •     Organ donor cover
  •     Reload of sum insurance
  •     Mandatory co-payment
  •     Cumulative bonus
  •     No-claim bonus
  •     Free health check-up
  •     Recovery benefit
  •     Renewability clause
  •     Add-on features

Keep a check on the renewal date

Always keep a check on the renewal date of your health insurance. Do not depend on your agent or the health insurance company to send you a reminder. Here is why:

  •     You can save up for the health insurance premium by the due date
  •     You can decide if you want to go for health insurance portability
  •     You can manage your annual financial plan and budgets
  •     You will not have to pay penalty for late premium payment, if any
  •     You will always be covered

Beware of health insurance fraud

Frauds are on the rise in every aspect of financial services and health insurance is no exception. When buying a health insurance plan, ensure you are buying it from a legitimate company that is registered with the IRDAI. Also check if the insurance agent is registered.

The insurer registration can also be verified with the IRDA website. Yes, we all think we are always careful while making financial transactions but fraudsters can be smarter than us.

Hence, it is always a good practice to double check your insurance company’s credibility and authenticity by calling their representatives, meeting them face-to-face and visiting their physical office.

Also, talk to your close circle and they can give you feedback about the good and bad aspects of an insurer, which you normally cannot get through secondary research.

Over to you

Health insurance is a necessity. It is important to buy a health insurance plan, but even more important is to buy a plan which fulfills most of your key requirements. Otherwise, it would turn out to be an unnecessary expense for you. 

FAQs: Health Insurance Best Practice

What are some best practices for health insurance in India?

There’s a lot to think about, calculate and consider when you are buying a health insurance plan. It may overwhelm you, but don’t fret, health insurance experts are here to help you out.

Firstly, compare different health insurance plans for these parameters:
· Sum insured
· In-patient hospitalization coverage
· Pre and post hospitalization coverage
· Day care treatment
· Domiciliary treatment
· Ambulance cover
· Organ donor cover
· Reload of sum insurance
· Mandatory co-payment
· Cumulative bonus
· No-claim bonus
· Free health check up
· Recovery benefit
· Renewability clause
· Add-on features

Secondly, check for these factors:
Claim settlement ratio of the insurance company
Reviews of customers who have bought the same policy
Reimbursement process
Incurred ratio

What is the right age to buy health insurance?

The best age to buy health insurance is as soon as a baby is born. It would be a good practice for parents to always have health insurance coverage for their children.

That apart, young people should buy a health insurance plan as soon as possible, preferably with their first pay cheque, because there are a lot of benefits of buying health insurance at an early age, like low premium, comprehensive coverage, and more.

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