Health Insurance? Here's what you should look for!
A health insurance policy is a must have, before you do anything else with your money. Even if your company/employer is providing health insurance, make sure you buy a personal policy for yourself and your family, on your own too!
Here’s why:
Your company insurance policy is valid only till the time you are with the company. If you quit and join another company which doesn’t have insurance, you may have to buy a new policy for yourself (or erode your wealth if you ever need to get hospitalized)
Generally, corporate health insurance covers are very low, about 2-3 lakhs, which is just insufficient for most kinds of hospitalizations
Corporate health insurance plans will cover you till retirement. And looking for a health insurance policy after you’re 60 years old is an extremely difficult task. And if you have existing health conditions by then (which most people do at age 60), then it’s nearly impossible
Now if you’re convinced that you should buy health insurance, let me give you one example of why this article is extremely important.
We had got our family's health insurance policies more than a decade ago.
Back then, there was not much information available about insurance.
Now, in the last one year, 2 of our claims have been denied by insurance companies, because of reasons I understand now, but didn’t understand back then. That sums up to a good 3 lakh+ rupees.
And even today, a lot of people look at only a few parameters while deciding which health insurance policy to buy.
So I thought of writing a few points that individuals should look at, while buying health insurance. If you’re opting for a health insurance policy, make sure you look at these points before deciding which one to buy:
Claim Settlement Ratio (CSR): This is the Number of claims settled against Number of claims received. So a company that has settled 946 claims out of 1,000 will have a CSR of 94.6%. Needless to say, the higher this is, the better.
Incurred Claim Ratio (ICR): This means the Net claims paid by the company against the total premium collected by it. So if an insurance company is collecting total premiums of Rs. 2,000 crore from all their clients, and paying claims of Rs. 1,200 crore, the ICR is 60%. This should not be too high, as it may indicate that the company may not be able to service future claims. Nor should it be too low, as that may indicate that it is not settling a lot of claims (however, this needs to be taken along with CSR). An ideal ICR is between 70% and 90%.
Co-pay: This indicates what percentage of the total claim amount will be paid by the policy holder. So if there is a claim submitted for Rs. 1 lakh for a policy that has a 10% co-pay, that means that the insurance company will settle a maximum of Rs. 90,000. The rest will have to be borne by the policy holder. Therefore, make sure that there is no co-pay clause in your policy. Typically, good policies don’t have any co-pay for individuals lower than 60 years of age.
Exclusions: A list of diseases or treatments that are temporarily or permanently excluded. If you suffer from a particular illness that is excluded permanently from the policy, don’t opt for that policy.
Waiting period:
Due to pre-existing conditions: All insurance policies have a waiting period for diseases arising out of a pre-existing condition. So for example, if you have high blood pressure at the time of buying the policy and there's a 3-year waiting period for PED, then any disease that can be traced to high BP (such as heart, kidney issues) will not be covered for 3 years after purchase. After 3 years, they would be covered. So don’t take a policy that has a high waiting period for PEDs
For certain diseases: Treatments for ailments like hernia, tonsils, cataract etc could have a waiting period of typically 2 years, after which they can be claimed. So if you are anticipating that you may need a surgery for these kind of ailments, make sure that you check whether the policy covers this from the beginning or not
Sub-Limits: Almost all policies have limits on treatments, ambulance charges or even room/ICU charges. For eg: if a policy has a Rs. 5,000 room limit but your room costs Rs. 7,000 the balance Rs. 2,000 and all associated charges will have to be borne by you. The company will pay only Rs. 5,000 per day for the room. Same is applicable for ICUs. Anything above that will be borne by the policyholder. Therefore, always choose a policy that has the least number of sub-limit clauses, or the one which has a higher sub-limit value
Well, that’s about it. These are the few major things I would take care of, if I were to buy an insurance policy today.
If you’re looking at revisiting your insurance policy or getting a new one, you can reach out to us for a free WhatsApp consult here. We’ll try our best to help! :)
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