Health is wealth! Although to be blessed with good health, a healthy lifestyle is very important, but one should also prepare to have contingency plan in case he or she falls sick and hospitalized. Yes, I am talking about Health Insurance. With increasing cost of hospitalization, one has little doubt about the importance of insuring individual or family or employees against hospitalization. Apart from four nationalized general insurance companies there are numerous private companies offering different products and services in the sector. The Indian Health insurance system, in its current form, can be actually be called by ‘Hospitalization Insurance’. The products that are available, mostly only covers for the expenses related to hospitalization charges for accidents as well as sickness. The catch is when you buy your health insurance, no two products are similar and comparing any two can be trickier then you think. Here are few parameters to weigh your products before buying.
Keep it Simple
More frills they have, more costly they become. It always pays to keep things simple and buy the most basic of all. A high-end with frill product may cover dental or normal doctor’s fees when you have a simple flu, but the cost is disproportionately high. And in India we’ve traditionally paid the simple health expenses from our own pocket and rightfully reducing the cost of the premium.
Never Compare Premiums
Health Insurance is a long-term complex contract coupled with complex services. Comparison of premiums could be largely misleading. Comparing Health Insurance requires deeper insights into the overall insurance contract over and above price comparison. Understanding the benefits and terms is more important than the cost you are paying.
Maximum Renewal Age
Maximum Renewal age is the age on which the coverage on your health insurance would discontinue. This could be for all members or for a specific member, depending on product to product. A product, which ceases renewal, while you are still alive and when you need it more than any time before, is not a good product.
Limits
Look for treatment wise limits in the products. Treatment wise limits basically limit the amount you can claim for a particular surgery or treatment under the policy. Such limits would cap your claim, even when you have a large sum insured under the policy.
Per day cash
There are some products marketed and sold as Health Insurance which provide a daily cash benefit for the no. of days one is hospitalization. Most surgeries require an average of 6-10 days, so at the Rs. 5000 per day limit multiplied by 10 Days would pay Rs. 50000 per hospitalization, irrespective of the actual charges incurred. Please avoid this product for your core healthcare expenditure risks or as an alternative to a Standard Health Insurance product. Do not confuse the above with products that have specific limits on Room Rent. Room Rent Limits, to an extent, make sense both for the customer, as well as the Insurance Company, as they categorize people paying a higher premium in the higher eligibility bracket.
Sum Insurance
Sum Insured is the total annual liability under the policy. Since this is a long-term product, you should look at the maximum available cover you can afford.
The option of upgrading the cover at a later stage when you are older is complicated. There could be a requirement for a medical test. Moreover, if you or any of the family members contact a new disease in the interim, the ailment would be excluded for the upgraded amount.
Age above 45 years
Premium in Health Insurance increases as per increase in your age. Have a look at the rate charts, and you will be surprised to see good jump in premiums after one cross the age of 45 yrs. In some cases, the increase in premium is as high as 50%. Ensure premium remains affordable in your retirement days.
History of the company
A company or set of promoters known for their ethics and excellent governance, venturing out into Insurance would be a decent bet. Get information, on the overall claims experience, on responsiveness, about changes and number of changes in the product, since it was launched. Too many or too large changes, indicates there could be more tomorrow.
Senior Citizen
Most Insurers, resist covering members above 45 years. Remember, you need to somewhere take the responsibility of not covering your parents, earlier in their life, and not completely blame Insurance Companies for not covering them, now.
Government V/s Private
Some consider Private Insurers better due to their modern infrastructure, their responsiveness. Some consider Public Sector to be more reliable. Private Sector would run for business and hence would be very responsive. Public Sector, are the Government’s mechanism to ensure a great healthcare infrastructure, and hence somewhat have a social angle. You need to understand the pros and cons diligently and hence set your own expectations right for your choice.
Good Agent
I have always said this, ensure you spend good time in deciding, who is your intermediary. Once you have taken pain to finalize a good advisor, you are more than half way done. A good advisor is one who would provide -
• Unbiased advice, without any special affiliation to any Insurance Company.
• Provides Routine services like Pickups, Renewals etc.
• Assists and Guides you at the time of Claims.
We don’t know what tomorrow awaits us, but for a brighter tomorrow, a better preparation is essential and half the battle is won. Wishing you “wealth of health” in the years to come.
