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How to Find a Low-Cost Health Insurance Plan?

Buying health insurance is often given low priority. The most common reason for this is because people don’t consider it a necessity. Many think of health insurance as an expense that might not give any returns since it represents a sunk cost.

However, if health insurance plans are available at a low cost, it shouldn’t be a reason for people to ignore it. Finding low-cost health insurance plans is not difficult. In India, there are many health insurance companies that provide such low-cost options. What you must remember is that the cost of not insuring your health is much more than the premium cost that you pay on your health insurance policy.

Here we talk about ways to find low-cost health insurance plans that you might find useful. But first, how is health insurance cost determined?

How are health insurance premiums determined?

There are many factors that determine the premium of health insurance plans. Some of the factors are:

Age: The higher the age, the more the probability of medical treatment requirement and hospitalization, and hence the premium will be higher. For example, the premium for health insurance policy of a 20-year old health person will be much lesser than that of a 60-year old person with health issues.

History: The medical and claim history of the policyholder is another factor that impacts the premium cost. If the policyholder has a history of illnesses and claims, the premium could be more.

Health condition: Many health insurance companies insist on a pre-policy medical check up. If the policyholder has pre existing health conditions like hypertension or diabetes, the premium for their health insurance policy might be more compared to that of a completely healthy person.

Now let’s move on to the key considerations to find a low-cost health insurance plan.

Understand the basics of health insurance

For many, health insurance details can be quite overwhelming and confusing. The reason for that is a lack of understanding of the basics of health insurance. It isn’t rocket science. It is pretty simple, if the basic fundamentals of health insurance and health are understood. 

How does one do that? By reading or taking a crash course from an expert, watching insurance videos available online and by asking friends and family to explain the basic concepts of health insurance. Feel free to asking questions to your financial advisor.

Once the basics are understood, one can start graduating to more detailed and advanced levels of knowledge. These include, tax-saving factors, methods of paying premium, claim settlement processes and more. Even though it may not be the most exciting subject, learning a little about it would always come in handy when you actually make a purchase.

Make a comparison of available health plans

The health insurance marketplace has hundreds of options for all kinds of insurance requirements. And so, the health insurance policy seeker has to compare a number of such health plans before zeroing on the best one. There are different parameters that need to be considered and compared including the insurance company’s reputation, the claim settlement ratio, coverage to cost of premium etc. As an insurance buyer, you would have to do your homework, too. If you want to select insurance plans with the most affordable quotes, compare plans

However, sifting through a hundred policies available in the market and reading all the fine print is not the most practical way to approach comparison of health insurance plans. You need to first zero in on 4-5 policies that meet your requirement and then make a detailed and elaborate comparison.

Compare plans online

The insurance industry has adapted to digital transformation much faster than others. All your insurance needs can be fulfilled online. Here’s how you compare plans online:

  • Conduct an online search for the types of health insurance plans that you’re looking for. If you’re looking for health insurance with a large sum insured, say Rs 1 crore, run a search specifically for ” high-value health insurance plans”. If you’re looking to buy a family floater, try searching for insurers that provide family floaters at the best terms and conditions. 
  • Read health insurance comparison articles. There are numerous publications, blogs and websites that share information about the best insurance plans in the market. Read some articles on credible websites, which can be useful in enabling you to compare these plans.
  • Once you narrow down on a few plans, compare just those plans manually. Go through each and every detail such as premium, sum insured, waiting period and the claim settlement ratio. You could create a comparative table to have a clear overview of those policies.
  • Once you’ve chosen a few plans, get in touch with an insurance representative or an agent to understand the pricing and the best possible rates you could get.

Use online insurance premium calculators

Online insurance marketplaces have made it easy for policyholders, not only to find suitable options but also to go a step further and calculate the cost of premium that helps make a more informed and calculated decision. Online aggregators help customers improve their financial literacy when it comes to insurance calculations.

Explore special offers and discounts

The insurance market is competitive. With numerous new insurance companies springing up, there is fierce competition. Insurers are continuously looking to provide better, cheaper and enhanced solutions to customers. The online insurance market is filled with innovative products and services. Moreover, insurers use the opportunity of special days, festivals and more, to offer discounted rates. When you get a bargain or discount on the same product with no compromises, why not make the best of it?

Insurance companies often offer a discounted rate for multi-policy purchase, full-payment discount or a discount for multi-year renewal and premium payment. These are good opportunities to make insurance plan purchases and avail discounts. One way to avail discounts is also to ask for discounts as most insurers will be willing to go that extra mile for building long term relationships with the customers. 

Ask for recommendations and quality advice

It is easy to get lost in the hundreds of insurance plan options. Moreover, it’s not a good idea to trust an insurance agent or an insurance company that you have never bought from before. That is why; the best place to start is by asking for recommendations from friends and family as they belong to your closely knitted trusted group.

Your trusted circle would never give you the wrong information or advice. However, you must understand that what worked for a friend might not work for you as well. Everyone’s needs are different and hence you must factor in that aspect. But if a friend recommends an insurer or a plan, it’s definitely worth checking it out. At the end of the day, it is you who has to do the due diligence.

Make use of health insurance tax benefits

It is often said that you must not buy health insurance only for the tax benefits and that is correct. However, tax benefits are an important aspect of buying health insurance. The premium you would pay for a policy is one way of looking at a plan’s pricing. But there are other ways, which affect the pricing factor, too. The tax benefit on insurance plans is a factor that can significantly bring down the cost of your plan. 

Assume that you buy a health insurance plan for an annual premium of Rs.15,000. You are eligible to receive tax deductions under Section 80D of the Income Tax Act. You can get a tax deduction of Rs.15,000 from your taxable income. Hence, while you are paying premium, it is also helping you save money through tax deductions.

The sum and substance of the health insurance story

Insurance advisors often tell you that it is best not to go for the cheapest health insurance policies. If someone is trying to hard-sell a plan at a heavy discount, be wary. Find out if there’s a catch in it and such catches are normally hidden in the fine print of the contract. After all, the reason for investing in health insurance is financial security against healthcare and you do not want to get stuck with a bad purchase that will cost you more than you had imagined. To get the best quotes for health insurance plans, get in touch with us.

FAQs: Low-cost Health Insurance Plans

What is the best way to compare insurance plans?

Insurance plans must definitely be compared and the comparison must include different parameters. Some of the factors to begin with are: premium, sum insured, renewal age limit, expenses covered, exclusions, flexibility factor, claim settlement ratio, insurance company performance history and more.

The best way to carry out such comparison is to read online publications, blogs and websites dedicated to finance and insurance. Look for resources that have expert opinion and are updated frequently to enhance your knowledge and understanding of health insurance.

If you want to compare costs and premiums, take the help of online insurance premium calculators and aggregators. These might give you a good sense of the approximate costs and prices of different insurance plans. At least, it can be a good starting point.

A good way to compare plans is to look up each insurance company’s website and make note of the key features.

What are the best resources to learn about health insurance plans in India?

The Internet is replete with information and resources on health insurance and you can almost get all that you need to make an intelligent decision. To find the right and most updated information about insurance plans may be a bit difficult with the amount of information available.

It is best to rely on credible sources of information when it comes to insurance plans. Try finding information in news publications such as Economic Times, Financial Times, Live Mint and other such reputable websites. Follow blogs written by finance and insurance experts. The websites of insurance companies are a good and trustworthy source, too. Look for government resources such as the IRDAI website and other publications. Especially, when it comes to data, these websites are a lot more authentic.

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