How to choose the Best Health Insurance policy

When someone asks you what is the biggest Asset you possess- your answer may be your house, luxury car, gold, certain stocks etc. They are valuable assets but the biggest Asset you have is your Health. It’s said- “Health is Wealth”, but actually “Health is the biggest Wealth”. So our first investment should be towards building this Asset i.e. HEALTH. For that we need to protect it from uncertainty; physically and mentally you protect it through good lifestyle, healthy food, exercise, yoga, meditation etc. but from financial perspective, God forbid, any uncertainty comes, you need to insure it for yourself and for your family. That’s where Health Insurance concept comes, so let’s understand Health Insurance and how can you choose the BEST Health Insurance policy-

What is Health Insurance and why it should be your compulsory investment-

Health insurance gives the financial protection incurring medical expenses predominantly when hospitalization happens due to any certain or uncertain reason. When any medical uncertainty comes like accident or a disease like heart problem, cancer, surgery etc. it has potential to wipe out your whole life savings and investments through a single medical bill. In post COVID era such uncertainties are unfortunately increasing. You never know when you will get hit from these. So it is better to take Health Insurance now if have not taken. How? That we will see ahead.

Benefits of taking Health Insurance-

1. Financial safeguard: The first and most important benefit of taking Health Insurance is- it acts as a safeguard of your savings and investments. You don’t have to worry atleast for financial aspect of your Health in case, God forbid, you get hospitalise.
2. Cashless Treatment: Almost all policies provide the facility of cashless treatment, where Insurance Company directly pays to the hospital. You need not to worry about the payment procedure; you only have to focus on your health. Cashless treatments are available in network hospitals. the list of hospitals which are tied up with Insurance company for cashless treatment.
3. Cover your lifestyle diseases: Now a day’s many policies cover the lifestyle diseases like diabetes, hypertension, asthma, thyroid etc. which are becoming more common.
4. Tax benefit: The premiums you pay for your policies can be claimed for Tax benefit under section 80D maximum upto Rs.25000.

Right age of taking Health Insurance- The right age of purchasing a Health Insurance policy is– as soon as you can. Many people ignore buying health insurance in young age because they think- they are young and healthy; chances of any hospitalization are very less so why to waste money on premiums. Don’t think like that, in young age usually you don’t posses any disease and if you take policy early, companies offer you policies at very less premium. Once you take the policy and in future if you get any chronic disease still your premium will be less as compared to premiums offered to those who have such diseases at the same age. So take Health Insurance as soon as you start earning. Most of the people start earning around the age of 24 years so buy a good Health Insurance policy at that time and make this as your first investment. If you are in mid age and have not taken yet, don’t need to worry, take it now. Early you take a policy more it will be beneficial for you.

Although best Health Insurance policy can be differ for individuals and its premiums also varies according to your existing health conditions and benefits you want from the policy. But there are some general points that you need to keep in your mind in order to take correct decision.  Following points you should keep in your mind while choosing Health Insurance policy-

1. Cashless treatment and network hospitals: You need to see how many hospitals from network hospitals are there in your vicinity. Atleast there should 10-20 hospitals covering each area should be in network hospitals. So that if you don’t have any liquid amount during medical emergency, you can go for cashless treatment.
2. Day care facilities: Many diseases’ treatment happens within 24 hours, where you don’t have to stay a night in the hospital. For example- cataract, dental surgery etc. So make sure minimum 24 hours clause is not compulsory in your policy and it should include Day care facilities.
3. Co-pay: It means with Insurance Company you also need to compulsorily pay a certain percentage of the medical bill. It is better that the Co-pay clause should NOT be in your policy.
4. Diseases covered: It is important to check the list of diseases covered under the policy. You can take help of your family doctor to know which diseases must be covered in the policy as per your health profile. If they are not in the policy include them.
5. Check waiting period for pre-existing diseases: If you have pre-existing diseases like diabetes, thyroid, heart issue, migraine etc. and you are applying for a policy then it offers you a certain waiting period, after completion of that waiting period you can apply for a claim for that diseases. For example- if you have Hypertension and its waiting period is 2 years, so you can claim only after 2 years. In pre-existing disease cases, premiums are little higher than in normal cases.
6. Don’t hide any information: This is very important, never ever hide anything from the Insurance Company. If you have any existing health condition, you should reveal that to company. If you smoke or take alcohol, reveal it. You should tell each and everything about your lifestyle without hiding anything. If you hide something and it is found in later stage, they can terminate your policy. So take note that you don’t have to hide any information as asked in policy.
7. Restoration Benefit: It is a benefit in which sum insured of your policy will be restored up to the maximum limit when it gets exhaust after a claim. Mostly it is for floater family plan; it is a benefit which helps you as a backup plan.
8. No claim bonus: It is a benefit provided when you don’t apply for any claim in one year. It can be in form of increasing your cover or any extra rebate or any other add-on benefit. Check if your policy has the No claim bonus clause.
9. Take one more policy outside your Corporate plan: If you have a Health Insurance plan provided by your employer, still you should opt for one more policy. Corporate plans fall under group policy, as soon as you leave your company, your policy gets terminated. After that you have to take another new policy with your existing conditions, it can be expensive for you. Moreover 2 plans can cover your single treatment by partially claimed amount applied by both plans. For example- You have 2 plans, one from your company and one you have taken on your own. Corporate plan has the limit of Rs. 2 lakhs and your own plan has the limit of Rs. 3 lakhs, if hospitalization bill comes of Rs. 4 lakhs then you can apply Rs. 3 lakhs from your own plan and Rs. 1 lakh from your company’s plan. Plans can be combined to claim a higher amount. Take note of this point.
10. Lifetime renewal: Many policies expire after some years usually when you get old, these policies should not be your preference because you again have buy new policy and its premium will be charged as per your medical condition at that time. Policies with lifetime renewal should your first choice.
11. Have other benefits: The polices are now going beyond hospitalization and giving you the other benefits like maternity, dental issues, preventive health checkups, domiciliary etc. So you should check what other benefits are covered and if they fall in your requirement you can add it.
12. Health Insurance cover: Last but an important point, how much cover you should take? The answer lies in factors- your age, lifestyle, existing diseases, habits like smoking/alcoholism and nature of your job/business. But as a Thumb rule– you should take cover atleast the cost of a Heart Surgery in a good hospital in your vicinity or atleast 50% of your annual income.

What important criteria to see while choosing Health Insurance Policy-

1. Claim settlement ratio: It is a ratio which tells the percent of claims settled by company against the total claims it gets. If a company has 95% claim settlement ratio it means if company gets 100 claims out of these, it is accepting 95 and rejecting 5. Higher the claim settlement ratio better the chances you get your claim settlement.
2. Claim incurred ratio: It is a ratio which shows how much a company is incurring in claims from the money it is collecting through premiums. If it is 70% it means company is collecting Rs. 100 from premiums and it is incurring Rs. 70 in claims. Both very high and very low value for this ratio is not preferable. If it is more than 90% then it raise a doubt that the company can go in loss and its operations may stop. If it is less than 50% it means company is focusing only on its profitability not on its customer service. Ideally it should be around 70%.
3. Features available as per your requirement: Check the feature which you require is available or not. For example if you are going for family planning then there should be maternity benefit, if you have dental related problem this add-on should be there. Moreover you should also reject unwanted add-ons which you will not use; it will reduce your premium somewhat.

This is how you can choose your most important investment; if you follow above criteria you will surely end up with a good policy and never regret if any uncertainty happens. Finally, take it to heart that “Health Insurance in not an Option it is a Compulsion”. Stay Healthy and Stay Happy.

Finance Tapasvi