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What Are the Most Effective Ways to Use Your Health Insurance Policy?

Amisha rushed into buying a health insurance policy without carefully reading every detail of it. While she was aware of the major coverage features and benefits of her plan, she wasn’t aware of the room rent capping. Her insurer was offering great coverage with an exception of a highly restrictive limit on room rents.

Since she didn’t know this, she went to one of the cashless hospitals without checking the room rent to get hospitalized during a medical emergency. The hospital she went to had a very high room rent rate which caused the room rent limit to come into effect. Naturally, she had to bear the hefty room-rent expenses even though she had a health insurance plan.

We’ve all heard other examples like this where unawareness became a huge impediment in the best utilization of a health insurance plan. Similarly, improperly assessing medical and financial needs causes people to get inadequate coverage and suffer the towering medical costs later. So, what is the solution to this?

Something as simple as reading and understanding the brochure of your health insurance policy will ensure its best utilization. We’ve listed some of the effective ways to use your health insurance policy that you can start with:

What Are the Most Effective Ways to Use Your Health Insurance Policy?

  1. Making an early investment

Making an early investment in a health insurance policy can go a long way in ensuring financial protection throughout your life. Buying health insurance early helps you use it effectively by avoiding any waiting periods for coverage. 

Moreover, premium amounts depend on the age of the policy buyer. In addition, you will have fewer health problems at earlier stages of life.  All of this adds up to ensure lower premium amounts for getting comprehensive health insurance coverage.

  1. Choosing the right type of plan

Assessing your health insurance needs and choosing the details of your plan accordingly is essential while buying health insurance. Before setting your mind about coverage and benefits, you need to decide on the type of plan you should be covered under. 

If you’re single, without any family responsibilities, an individual health plan would be the best for you. However, when you get married or your parents retire, you may want to get your family covered under a plan too. In that case, you should assess your family health insurance needs and get a suitable family floater policy with adequate coverage. 

But, including your parents under the family floater policy would drastically increase the premiums of your policy. Thus, it is better to cover them under a senior citizen mediclaim policy and get a family floater policy for yourself, your spouse, and your kids.

  1. Planned and consistent premium payments

Taking the pain of planning your premium payments and ensuring consistency is much better than missing the renewal date. People often end up losing their health insurance benefits because of missing their renewal dates. 

Make sure you make your premium payments well in time and mark a reminder on your calendar a few days prior to the renewal date. Doing this will save you a great deal of trouble and inconvenience of buying a new health insurance plan and waiting for it to come into effect.

  1. Availing Tax Benefits

Availing tax benefits is one of the most effective ways to use a health insurance policy. Several health insurance plans offer tax exemptions to the policyholders on the premiums under section 80D of the income tax act. Make sure you understand the rules of section 80D of the income tax act and check with the insurance provider about tax benefits.

  1. Enhancing coverage with Top-up Policies

There are times when your medical and financial needs outweigh the coverage provided by your health insurance policy. Therefore, you need a greater sum insured with more coverage benefits. Purchasing a top-up health insurance policy is the most effective way to increase coverage while enjoying coverage of your current insurance plan.

With a top-up plan, you can rest assured even if your basic health insurance plan is exhausted. Top-up plans are especially beneficial when you’re covered under group health insurance plans provided by the employer. Moreover, a top-up plan is easily convertible to a basic health insurance plan.

  1. Checking room-rent capping carefully

Insurance providers often don’t reveal or are ambiguous about the room rent limits. This can significantly limit your health insurance coverage with inflation. The limit up to which your health insurance plan would be liable to pay for your accommodation expenses during hospitalization is known as room-rent capping.

If the room rent is capped at a very low amount, it will result in hefty out-of-pocket expenses. Therefore, make sure you check the room rent capping while comparing health insurance plans and select one which doesn’t have very restrictive limits.

  1. No-Claim bonuses for claim-free years

For every claim-free year, insurance providers offer no-claim bonuses to their customers. Insurers offer an increased sum insured for every claim-free year as a cumulative bonus. 

You can use this to your advantage. Say you have a claim to make for a fairly low amount and the year is about to end. It is better to bear those expenses if your benefits for a claim-free year significantly exceed the claim amount.

To sum up, you can best utilize your health insurance policy when you’re aware of every little detail including additional benefits and seemingly insignificant limits. This also includes understanding how the premium is calculated and how you can decrease it. Had Amisha known about the limits on her room rent, she wouldn’t have had to bear massive out-of-pocket expenses.

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