How to choose a better health insurance policy?

Q. How to choose a better health insurance policy?

1. Which plan to choose? 

Floater Plan (aka Family Plan) Or Individual Plan

The difference between the two is that Floater Plan gives one coverage amount for the whole family whereas in Individual Plan every person will get his own coverage amount.

Q. When one should take up Individual Plan over Floater Plan?

• If a member in your family has some severe health issues it is better to opt for an Individual Plan for that family member because choosing Floater Plan will result in paying a higher premium. So it is better to take an Individual Plan for that particular member and for rest family members Floater Plan can be taken.

2. Check the Claim Settlement Ratio.

• Claim Settlement Ratio means out of the total claims received by the company how many of them have been settled by the company. It is expressed in percentage.
• Claim settlement ratio = (Number of claims settled/Number of claims received) x 100
• Whenever you are opting for health insurance of any company always check its Claim Settlement Ratio because sometimes a few new companies might offer a low premium policy with high coverage which may look attractive to the customers but the intention of the company may not be good towards their customers (i.e. they might not be capable enough to settle the claims they have made) checking the claim settlement ratio will help you to judge the policy better.
• Higher the ratio better the policy.

3. Check the list of hospitals covered under the policy.

• Whenever you opt for any health insurance policy always check whether the hospitals in your geographical area fall under the list of hospitals covered by the policy.
• More the hospitals covered better the policy.

4. Check whether the policy is cashless.

• Always opt for the policy which is cashless meaning the company will directly settle the bill and the customer or patient has nothing to pay.
• Find a cashless hospitalization network that covers the top hospitals in your city. The list of all the hospitals covered will be mentioned in your policy which you take up so please make sure you go through the list.

5. Check whether the policy covers pre and post hospitalization expenses.

• Whether the tests and other miscellaneous are covered in the policy or not.

6. Check whether the policy puts a cap/restriction on the amount to be covered on certain expenses.

• Take up a policy which does not have many caps/restrictions on the amount to be covered on services provided by the hospital.
• For example – The hospital charges ₹4000 for private ward/room and the policy says if opted for private ward/room company will bear only ₹2000 and the remaining ₹2000 has to be paid by the customer/patient.

7. Check whether the policy is Disease-oriented or not.

• It means that you need to check the list of diseases the policy covers and whether the company will reimburse the entire amount spent by you without putting restrictions.
• Choose the policy that will reimburse the entire amount irrespective of the disease.

8. Check the waiting period for certain diseases.

• Some companies have a waiting period for certain diseases in their policies. This period starts from the day the policy is taken. The policy will cover the disease once the waiting period expires.
• Lesser the waiting period, the more the policy is beneficial.

9. Check the No Claim Bonus percentage.

• It means for one year if you did not claim anything then next year either your premium will be reduced by a specific percentage or your coverage amount will be increased.
• Higher the No Claim Bonus Percentage better the policy.

10. How much coverage is sufficient?

• Minimum coverage should be ₹5,00,000 in normal situations.
• In times of pandemic, it is advisable to purchase a policy that has a minimum coverage of ₹10,00,000.
• If you can afford to pay more premium you can take more coverage or better policy.

11. Check the Co-pay Percentage.

• This means the company requires you to bear a certain percentage of claim from your pocket and rest the company will bear.
• Lower the Co-pay percentage better is the policy.

12. Check the Room Rent conditions.

• This is very important to be known, here policies put a cap limit on room rent to be covered.
• For example – A policy with a coverage of ₹5,00,000, the policy will say that only 1% to 2% of the coverage amount i.e. ₹5,00,000*0.01 = ₹5,000 is the maximum amount which will be borne by the company and if your room rent exceeds the said limit, suppose ₹7,000 is your total room rent then excess ₹2,000 is to be borne by the patient.
• Choose such a policy that does not put a cap on room rent.

13. Tax Benefits u/s 80D.

• Deduction of ₹25000 on the premium paid for self, spouse, and dependent children.
• (If self or spouse is a senior citizen i.e. 60years or more then ₹25000 to b substituted with ₹50000)

Conclusion – Be wise when you put your money somewhere and see what all benefits you reap in return. Health Insurance is a must today and picking any policy just for the sake of insuring yourself is not a wise decision. So gather some knowledge about what kind of insurance policy you are going to choose and see that all the above-mentioned points are taken care of. Plan your budget accordingly and choose the policy which is best for you and meets your needs. Stay Home Stay Safe.

“If a child, a spouse, or parents depend on you and your income, you need a Health Insurance”