In today’s world, medical emergencies can come without warning, and the cost of treatment can be a huge financial burden. A good health insurance policy acts as a safety net, protecting your savings from being wiped out by hospital bills. But with so many options available, how do you choose the right one?
Buying health insurance can feel complicated, but it doesn’t have to be. Here is a simple checklist to help you make an informed decision and choose a plan that’s perfect for you and your family.
1. How Much Coverage (Sum Insured) Do You Need?
The Sum Insured is the maximum amount the insurance company will pay for your medical expenses in a year.
- Think about your city: Medical costs in big cities like Mumbai or Delhi are much higher than in smaller towns. If you live in a metro city, you will need a higher sum insured (at least ₹10-15 lakhs).
- Consider your age and family: A young, single person might need less coverage than a family of four with older parents.
- Don’t forget inflation: Medical costs are rising every year. A cover that seems big today might not be enough in a few years. It’s wise to choose a policy with a substantial sum insured.
2. Individual Plan vs. Family Floater Plan?
- Individual Plan: This policy covers only one person. Each family member gets their own separate policy with a separate sum insured.
- Family Floater Plan: This is a single policy that covers the entire family (you, your spouse, and children) under one shared sum insured. It is usually cheaper than buying individual plans for everyone.
Which one to choose? A family floater is great for young couples and families with young children. However, if you have elderly parents or a family member with a health condition, it’s better to get them an individual plan so their claims don’t exhaust the cover for the rest of the family.
3. Check the List of Network Hospitals
Every insurer has a list of “network hospitals” where you can get cashless treatment. This means you don’t have to pay the hospital bills from your pocket; the insurance company settles them directly.
- Before you buy: Check if the good, reputable hospitals in your area are on the insurer’s network list.
- Convenience is key: Having a network hospital nearby is crucial during an emergency.
4. Understand the Waiting Periods
This is one of the most important points. A waiting period is a time during which you cannot claim certain benefits.
- Initial Waiting Period: For the first 30 days of your policy, you usually cannot claim for any illness (except for accidents).
- Pre-Existing Diseases (PED) Waiting Period: If you have any health condition like diabetes, high blood pressure, or asthma before buying the policy, it is called a pre-existing disease. Most policies cover these diseases only after a waiting period of 2 to 4 years. It is very important to declare all your health conditions honestly when buying a policy.
- Specific Illness Waiting Period: Some policies have a 1-2 year waiting period for specific treatments like cataract surgery, hernia, joint replacement, etc.
Always look for a plan with the shortest possible waiting periods.
5. Beware of Sub-Limits and Co-payment
These are clauses that can reduce the amount you can claim.
- Sub-limits: This is a cap on specific expenses. For example, a policy might have a sub-limit on the hospital room rent (e.g., 1% of the sum insured). If your sum insured is ₹5 lakhs, your room rent limit is ₹5,000 per day. If you choose a room that costs ₹8,000, you have to pay the difference and a portion of the total bill from your own pocket. Try to choose a plan with no sub-limits, especially on room rent.
- Co-payment: This means you have to pay a certain percentage of the claim amount yourself (e.g., 10% or 20%), and the insurer pays the rest. While plans with co-payment have lower premiums, they can be costly when you actually make a claim.
6. Look for No Claim Bonus (NCB)
A No Claim Bonus is a reward from the insurer for every year you don’t make a claim. This reward is usually an increase in your sum insured for the next year, at no extra cost. For example, if you have a ₹5 lakh policy and an NCB of 10%, your cover will increase to ₹5.5 lakhs next year if you don’t make any claims. This is a very valuable benefit.
7. Check the Claim Settlement Ratio (CSR)
The CSR tells you how many claims an insurance company has paid out of the total claims it received. A higher CSR (above 90%) is a good sign. It shows that the company is reliable and has a good track record of paying claims. You can find this information in the annual report published by the IRDAI (Insurance Regulatory and Development Authority of India).
Final Word: Read Before You Sign
Don’t just rely on what the agent tells you. Always read the policy document carefully to understand all the terms, conditions, inclusions, and exclusions. Choosing the right health insurance is a crucial step in securing your financial future. A little bit of research today can save you a lot of stress and money tomorrow.
