Quick tips to make the right health insurance choice

Having the right health insurance is a major stepping stone towards well-planned personal finances. Even the famous proverb ‘health is wealth’ implies that health comes before wealth. However, choosing a health insurance plan is not that simple. There are many features and conditions one must consider. This makes it necessary to perform a detailed comparison of all the available health insurance plans. 

Here are some tips to choose a health cover that is appropriate for your needs:

• Type of cover – You have a choice between indemnity plans and defined benefit plans. The former reimburses the actual hospital expenses while the latter pays a defined amount irrespective of the actual hospital expenses incurred. Indemnity plans can be individual or family floater, cashless or reimbursement-only. You must decide on the policy type depending on your health insurance needs. For example, a family floater indemnity plan with a defined benefit critical illness may be ideal for most families.
• Coverage required – Insurers provide slab-based coverage options in their health insurance products; for instance, sum assured options of Rs 3 lakh, Rs 5 lakh, and Rs 7 lakh. The sum assured has to be selected based on the medical expenses in the location where you plan to get hospitalised when required. Metro city residents will need a higher sum assured compared to someone living in a tier-2 city.
• Sublimits – A sublimit is a cap on the various expenses covered by a health insurance policy. For instance, a policy may have a sublimit of 1% of the sum insured on room rent, and similar sublimits on out-of-pocket expenses, pregnancy benefit, etc. You must ensure that the sublimits meet your requirements.
• Waiting period – Pre-existing diseases are covered under health insurance policies, but the coverage is subject to a waiting period. Any disease identified 48 months before the issuance of the policy is regarded as a pre-existing disease. Symptoms noted within 3 months of the start of the policy will also be considered as pre-existing. It is important to disclose pre-existing conditions to ensure a smooth claim settlement. While selecting a health cover, you should consider one with the most favourable waiting period for your medical condition and history.
• Co-payment – Co-payment is the portion of the hospital expense that is not covered under the policy. Generally, it is a percentage of the total bill that you have to pay out of your pocket. Many health policies have specified co-payment percentages; for instance, 10% of the total bill. It may also vary if treatment is availed of in a different city or a non-network hospital. The lower the co-payment percentage, the lower your medical expenses.

Related: Group health insurance vs Individual health insurance

• Renewability – Buying health insurance when you are older can be quite expensive. So, it is important to go for a policy that offers lifetime renewability. This way, your premium remains low and you are protected throughout your life. On the other hand, buying a limited period plan would require you to buy a new plan later in life. After a certain age, you may not even be eligible for health coverage. 
• Network hospitals
• Restoration benefits
• Riders available
• Flexibility to increase decrease the cover

Related: Things to consider while buying health insurance for your parents

By shortlisting all available health insurance plans, you can compare them based on these and other parameters. This will help you to make an informed decision that will protect your financial health for the foreseeable future. Here are some important things to note when purchasing health insurance during COVID-19 pandemic.