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A Step-by-step Guide to Choose Health Insurance Plans

Let’s talk about Anjali today. She is 28 years old and works at a law firm based out of Mumbai. Having adopted well to social media and the internet, she’s able to educate herself about virtually every topic. 

While buying insurance, however, it is important to understand the terminology. We’ll try and simplify it for Anjali and all other readers.

So, if you are in the market shopping for a health insurance policy, here’s a start-to-finish guide to help you choose the best health insurance plan for you and your family:

Step 1: Analyse medical needs — self & family (if applicable)

Step 2: Evaluate the coverage required

Step 3: Compare types of health insurance

Step 4: Research health plan networks

Step 5: Compare out-of-pocket expenses

Step 6: Compare insurance companies and choose a reliable provider

Checklist: Key points to consider when choosing a health insurance plan

Why do you need health insurance?

Health care insurance offers financial protection against a range of medical issues and chronic illnesses. This usually includes coverage of:

Emergency careIn-patient and out-patient care
Pre hospitalization costsPost hospitalization costs
Laboratory test costsPrescription drugs
Maternity careMental health issues

In addition to this, 

  • A health insurance policy provides access to preventive care and rehabilitative services. 
  • You can opt for free routine check-ups anytime during the policy term. 
  • Companies also offer co-payment solutions to ensure you do not burn a whole in your pocket.
  • There is no need for claiming reimbursements because of the option of cashless treatments.
  • Not to mention, you are liable to income tax benefits under section 80D.

How to choose the best health insurance plan?

Step 1: Analyse medical needs — self & family (if applicable)

  • Number of family members: Consider who will be part of the insurance plan. Some important questions to be asked here are:
    • Will the insurance cover you or your entire family?
    • Should you go for separate individual plans or a family floater plan?
    • If you choose a family floater plan, what is the cap on the number of family members allowed?
  • Age of each member: The cost of premium depends on the age of the oldest member of the family. Higher age indicates higher premium.

Anjali is 28 years old and the oldest member in her family, her father is 65. Since the premium will be based on the age of her father, it will be higher than it should be. So what can be done here? 

Well, the sensible thing to do would be to buy a separate plan (senior citizen plan) for her parents.

  • Medical history of each member: Make note of existing health conditions and potential risks of every member in your family.
    • This ranges from lifestyle diseases like diabetics, blood pressure and cholesterol, to specific and chronic illnesses, if any.
    • Consider buying a separate plan in case of severe pre-existing diseases to reduce the premium. For instance, the premium for someone with cancer or history of strokes will be much higher than someone with dental or vision needs.
    • Speak with your doctor or physician to get a better idea.

Step 2: Evaluate the coverage required

What happens if Anjali gets pregnant down the line? Will her insurance provide maternal coverage?

What about when the cost of healthcare services increase? Who will cover the inflated expenses? 

Consider the following factors before finalising the amount of cover you will need:

  • Age
  • Medical status (pre-existing conditions)
  • Future medical needs 
  • Income (or budget)
  • Inflation

Step 3: Compare types of health insurance plans

Find out about the different types of health insurance plans:

Type of planDefinition
Individual PlanPurchased by you for yourself or on a family basis
Family Floater PlanCovers the entire family under one plan
Group Health InsuranceProvided by companies to employees 
Senior Citizens PlanDesigned for elderly people aged 60 or above
Critical Illness insuranceDread disease policy to provide additional cover for medical emergencies like cancer, stroke, cardiac arrest, etc
Specific IllnessInsurance policy covering a specific disease(s) only such as kidney-ailments, heart attack, etc.

Step 4: Check hospital network

If tomorrow you have a medical emergency and the only hospital included in your plan is hours away, what a waste of an insurance that would be!

Therefore, always choose a plan that includes your preferred doctors or hospitals. 

Step 5: Compare out-of-pocket expenses

Out-of-pocket expenses are the costs you cover at your end in the form of deductibles, copays, and coinsurance. As per WebMD, these amount to 2% to 8% of your total monthly income.

Some companies offer upto 50% discount on copays! Imagine the costs you could save by making an informed decision!

Step 6: Compare insurance companies and choose a reliable provider

  • Conduct diligent research before you choose an insurance company. 
  • Consider the different plans they are offering, the features and benefits included, the cost of premium and whether they adequately cover your medical requirements. 
  • Insurance plans are usually associated with a set of exclusion. Make sure to read their policy terms carefully. 
  • You can evaluate the reliability of a company based on their:
    • Claim-settlement ratio
    • Service quality 
    • History
    • Reputation
    • Customer reviews
    • IRDA data sheets
  • Rely on authentic websites and insurance aggregators to source information. 

Checklist: Key points to consider when choosing a health insurance plan

  • Look for the right coverage
  • Look for the right insurance type
  • Choose your preferred hospital network
  • Select a plan with lifelong renewability
  • Check out waiting period for pre-existing conditions
  • Watch out for exclusions
  • Focus on claim process
  • Look for value-added added benefits and discounts
  • Check company’s claim settlement ratio
  • Compare quotes online

Bottom line

It doesn’t matter whether you are a student, working individual. self-employed or otherwise, married, pregnant, or a senior citizen, everyone needs health insurance! 

Hopefully, this cleared any queries you had about choosing a health insurance plan. If you have any other questions, let us know!

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