factor of health insurance

How to choose best health insurance policy for you?

If you recall, health insurance was not such a big necessity a few decades back. First thing, medical treatment was not costly in those days compared to current medical costs. Second thing, people used to come forward easily to help each other in times of need. People used to have extended families and the entire village used to be like a family if someone is in need, which was like social insurance. Third thing, very few people used to suffer from lifestyle diseases like diabetes and heart problems in those days as people used to work hard in agriculture tasks and other jobs.

Lifestyle diseases have become more common these days due to bad food habits and lack of physically demanding work. Further, the warm bonding among people and social help is also vanishing as families are becoming nuclear. Though medical treatments are advanced these days, they are expensive as well.

It is believed that every year 5.5 crore people from the middle class are pushed into poverty due to high medical costs. Many times, people lose their land, wealth, jewelry, and other valuable assets to arrange the cost of treatment.  Financial help from relatives may be most likely to a limited extent only. Some families may be poor that they cannot even afford the suggested treatment and are forced to wait for years in pain. In a study done by a reputed medical journal called Lancet, 26 lakh people lose their lives every year due to the non-availability of treatment.

Is There Any Solution To All The Above Misery And Pain?

Thankfully, our government is taking steps to bring in the safety of health insurance to the most neglected and poor members of the society through various schemes such as Aarogyasri launched by the state government or Ayushmann Bharat a health insurance scheme launched by the Indian central government. These are great initiatives by the government to help the people below the poverty line.

Unfortunately, the majority of you reading this may not qualify for these government schemes. For example, if you own a two-wheeler, file income tax, or have monthly income above Rs 10,000, or have a refrigerator or a landline, live in a solidly built house, you may not even qualify.

So, what is the solution to have at least a basic health insurance cover for you and your family, if you are married and have responsibilities?

The answer is to buy at least a basic health insurance of about 5 Lakh coverage amount, or more if you can afford it. Everyone likes to be healthy always but sometimes, we cannot predict what can happen in the future.

There is a saying in English like health is wealth but if we don’t have the insurance to take care of health treatment all the wealth can be lost.

At one of our affiliate health website, we keep receiving inquiries from many patients mentioning that they are suffering from various health issues and require surgery, but don’t have any money to bear the cost.

Look at these real example questions that we get regularly – patient names are removed for privacy.

  1. Hello sir, I am suffering from a torn tendon in the shoulder for the last 6months. Please tell me Aarogyasri covers this…?
  2. What are eye surgery treatments that come under the Aarogyasri scheme?
  3. Is Dental treatment eligible in Aarogyasri?
  4. Is Aarogyasri applicable to the angiogram process?
  5. Dear Sir/Madam My mother-in-law got a hypothyroid problem. The doctor said she needs surgery immediately. We took her to some private hospitals; they tested her and said that the surgery costs around Rs 2 lakhs. Doctors said us this surgery is not covered in Aarogyasri card and ESI. We don’t have that much money so please help us. We are a poor family.

No one wants this kind of situation for their family member or loved one right?

When people don’t have health insurance or money, they are forced to bear the pain, wait many years for treatment, or sometimes, go to low-quality hospitals which can create even more complications.

People often spend money on activities like going to a movie or dining out, but one hardly thinks about spending money to get health insurance. We have to become more aware of the benefit of having health insurance, which gives peace of mind.

Health insurance with minimal sum assured may not cost much. If you have health insurance, you will be able to give your loved one the best treatment in a good hospital without depending on someone for financial help.

To help you get more informed about important things to look for in health insurance, we mentioned here the most important factors. Of course, we can help you select the best option but it’s good to be informed.

health insurance

1. Sum Insured

You must choose the right amount of sum that is enough to cover your medical bills so that there is no need to empty your savings or borrow money in case of emergency hospitalization. Medical costs tend to increase over a period compared to the year you are purchasing health insurance.

So you must select the right amount of sum to cover your family at the time of emergency hospitalization in the future. Ideally, you should plan to cover future costs also like 3 to 5 years ahead from the year of purchasing.

For example, if the insured is a small family of 2 to 4 members that include a couple or couple with one or two kids should be at least 2 to 5 lakhs sum insurance depending on your affordability

2. Premium Amount

Premium is the amount paid towards health insurance policy to keep it in force. Generally, the premium amount is paid annually but some insurance companies allow the customers to pay it in easy installments. In general, there used to be no EMI option in case of health insurance but after the incidence of the Covid-19 pandemic, considering the lost income, pay cuts, IRDAI has advised all general and health insurance companies to allow the customers to pay the premiums of health insurance in easy EMIs.

The Premium amount depends on various factors like the insured person’s age, particularly the eldest person in the family who is being insured in case of family floater plans. This is one of the main reasons to buy a separate health insurance plan for parents.

Because if you include your parents also in your health insurance plan the premium is calculated based on the age of the eldest person in the members being insured.     

For example, if your family includes you, your spouse, kids, and your parents or in-laws, then it is advised to take one policy for you, your spouse, and kids and another policy that covers your parents or in-laws.

Read More: Health Insurance For Parents

Some more factors affect the premium amount you pay towards a health insurance policy. For example, the waiting period for PED (Pre-Existing Diseases), NCB (No Claim Bonus), risks covered, co-pay if applicable, and room rent limits are some factors that can affect the premium of a health insurance policy.  

Read More: Health Insurance Plans For Family In India

3. Health Insurance Company’s Reputation

A good reputation is the result of years of trust that a company develops among its customers. It takes years to build trust. When you buy health insurance, the minimum expectation is that when you are in need, you should get the benefit without any hassles.

Good insurance companies make sure that they honor the claims that are valid and process them in a fast and transparent manner, without causing inconvenience to the customer. Otherwise, what is the use of paying for health insurance when you face difficulty in using the benefits?

A good insurance company is likely to have a high claim settlement ratio, which means the possibility of rejection is less. IRDAI releases an annual report which contains the Claim Settlement Ratio details of every Health Insurance Company and every general insurance company. You can check that data on the IRDAI website.

GENERAL INSURERSNet Earned Premium (Crore) Claims Incurred (Net) (Crore) Incurred Claims Ratio (%) 
Acko General Insurance Ltd.29.537.0024%
Bajaj Allianz General Insurance Co. Ltd.1865.881591.4885%
Bharti AXA General Insurance Co. Ltd.222.60197.1289%
Cholamandalam MS General Insurance Co. Ltd.428.50151.2635%
DHFL General Insurance Limited46.9621.6346%
Edelweiss General Insurance Co. Ltd.22.7726.26115%
Future Generali India Insurance Co. Ltd.238.11174.5773%
HDFC ERGO General Insurance Co. Ltd.1053.17656.0062%
Go Digit General Insurance Ltd.14.531.5611%
ICICI Lombard General Insurance Co. Ltd.1826.991396.8076%
IFFCO Tokio General Insurance Co. Ltd.838.65854.71102%
Kotak Mahindra General Insurance Co. Ltd.37.7017.8047%
Liberty Videocon General Insurance Co. Ltd.151.04123.3082%
Magma HDI General Insurance Co. Ltd.54.8049.5790%
Raheja QBE General Insurance Co. Ltd.0.130.0431%
Reliance General Insurance Co. Ltd.893.79836.1094%
Royal Sundaram General Insurance Co. Ltd.306.50185.5061%
SBI General Insurance Co. Ltd.978.67509.2152%
Shriram General Insurance Co. Ltd.3.571.8752%
Tata AIG General Insurance Co. Ltd.665.72518.5378%
Universal Sompo General Insurance Co. Ltd.133.40122.9992%
STANDALONE HEALTH INSURERSNet Earned Premium ( Crore) Claims Incurred (Net) ( Crore) Incurred Claims Ratio (%) 
 Aditya Birla Health insurance Co. Ltd. 348.23204.1159%
Apollo Munich Health Insurance Co. Ltd.1672.901047.0963%
CignaTTK Health Insurance Co. Ltd.392.52243.1462%
Max Bupa Health Insurance Co. Ltd.659.48355.6454%
Reliance Health Insurance Ltd.1.360.1813%
Religare Health Insurance Co. Ltd.1091.20602.6755%
Star Health and Allied Insurance Co. Ltd.3662.372297.5963%
Incurred Claim Ratio – Data Extracted from IRDAI Annual Report 2018-2019
Looking for a Health Insurance Plan?

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4. Network Hospitals Coverage for Cashless Treatment

Goes without saying that if you are not wealthy or don’t have enough cash on hand to afford a costly treatment, paying it from your pocket at the time of treatment, and later claiming it from the insurance company can be a difficult experience. Arranging a large amount to pay hospital bills upfront and then claiming later can be a difficult task.  

So, it is best to choose an insurance company that has a wide network of hospitals to avail cashless treatment benefit. Generally, all reputed insurance companies would have a good network of hospitals. Insurance companies mention the list of network hospitals providing cashless treatment on their website.

Once you choose a network hospital that has a tie-up with your insurer, the claim settlement process becomes easy. All you have to do is provide your insurance details like your insurance ID, your identification details, etc. at the time of admitting the hospital. At times there would be a separate department in the hospital that deals with the insurance process. They are called TPA (Third Party Administrators) which act as an intermediary between Health Insurance Company and the insured person. TPA helps to simplify the claim settlement procedure.

5. Room Rent Limit

It is an important factor because often the room rent can become the highest component of the total treatment cost. Moreover, the room type you select may also affect the total bills. Because hospitals generally categorize the billing slabs based on the room type you occupy for hospitalization.

If you go with a plan which has no limit on room rent, it is possible to choose a single private room for the treatment, which is always the best option than sharing a room. The service and sanitation provided in a private room is generally better than sharing rooms. However, this also means a little higher premium cost.

Also, it is important to select a plan with either no-limit on room rent or a plan that mentions this in terms of room type rather than room rent limit. Select the amount of room rent limit keeping the future in mind, because the room rents may change over a period. Again the room rents of hospitals may depend on geographic location. The treatment cost at hospitals in metro cities would not be the same compared to hospitals in rural or suburban regions.

6. Sub-Limits on Various Expenses

Some health insurance plans define sub-limits on some services provided under the coverage. They mention this either in terms of percentage of base sum insured or as some fixed amount. It is better to select plans that have no limits on various aspects of treatment. Some examples of medical treatment with can have such sub-limits are doctor fees, operation theater charges, anesthesia fees, etc. If other features are good in the plan but there are some capping on certain aspects of treatment, then you can choose plans with enough cover to address such services mentioned as per the documentation of the policy.

7. Co-Pay Requirement

Co-pay means you have to pay some part of the treatment cost out of your pocket. For example, if you purchase a plan with 20% co-pay, and the treatment bill is 1 lakh, you have to pay 20 thousand out of your pocket. The best plans are those where you have zero Co-pay requirements.

It is highly suggested to choose plans which have zero co-pay but again, they come at a little higher premium compared to health insurance plans with some percentage of co-pay. Some health insurance plans come with co-pay as a mandate if the insured is a senior citizen who is above 60 years.

8. No-Claim Bonus or Cumulative Bonus

It is advised to take health insurance at a young age because one of the great advantages of buying health insurance at a young age is that you can make great use of the No-Claim Bonus. What does the No-Claim Bonus mean?

For example, if a plan offers a No-Claim Bonus of 20%, this means that if the base coverage is 5 lakh and you do not make any claim in the first year, next year coverage will automatically increase to 6 lakh. If you have a family, a No-Claim Bonus can help you increase your coverage without having to pay a huge premium.

No-Claim Bonus Or Cumulative Bonus

No-Claim Bonus is only applicable when one doesn’t claim in a policy year. So if you have a minor treatment cost that you can afford, it is important to think whether to claim or not.

9. Restore Benefit and Recharge Benefit

Restore benefit is another nice option that is offered by some health insurance policies. If this option is included in the policy, when you hospitalize and the base sum insured amount is utilized in paying the bills either completely or partially, then the sum insured amount gets reset to its full limit. This restored limit can be utilized when you hospitalize next time in the same policy year. HDFC ERGO’s Optima Restore Health Insurance Plan is one such example that offers Restore benefit.    

In case of Recharge benefit, if you have a health insurance plan that covers 5 lakhs of base sum and if your hospital bills of single hospitalization exhaust your limit the insurer will recharge it by adding cover limit without requiring you to pay an extra amount. Some plans add some fixed amount within the upper limit of the insured amount whereas some plans add it up to 100% of the sum insured value.

Care Health Insurance (Previously known as Religare Insurance) is one such health insurance plan with a 100% Recharge Benefit. Religare has recently changed its brand name to ‘CARE Health Insurance’. This company also has plans with an additional option of Unlimited Automatic Recharge which can benefit to recharge it multiple times.

To understand the type of feature offered and limit allowed by the plan you need to read the policy wordings. There will be a description in the policy document about this if the plan allows such benefit.

10. Waiting Period and Disease Exclusions

The waiting period is the duration during which the insured can’t do any claims. Details about the waiting periods are mentioned in the policy wordings. Generally, there would be different types of waiting periods when it comes to health insurance.

The first one is 30 days waiting period from the initiation of health insurance during which the insured can’t claim the insurance for hospitalization bills of any health issues except for the accidental issues.

The second one is the waiting period for pre-existing illnesses such as diabetes, hypertension, or cardiac issues if the insured person is suffering from any of such health issues at the time of commencement of the insurance. Health issues present at the time of purchasing the health insurance policy are considered pre-existing conditions.

The third one is there are certain health issues for which there will be a fixed waiting period of 2years. Some example conditions are cataract surgery, varicose veins, arthritis, and joint replacement.

Depending on the overall health of the persons going to insure, you can select a plan with suitable waiting periods if any pre-existing health issues are there. Health insurance plans with short waiting periods cost high compared to plans with a long waiting period.

11. Pre-hospitalization and post-hospitalization expenses

Pre-hospitalization and post-hospitalization bills are medical bills that come before and after the actual hospitalization like visits to your doctor, medicines, and medical tests. Post-discharge expenses may include follow-up visits to the doctor, medical expenses, etc.  Most health insurance policies cover these bills too. The duration of pre and post hospitalization covered may differ from plan to plan.

12. Domiciliary Hospitalization

Domiciliary hospitalization means the medical treatment received at the home when the patient is not in a situation to be shifted to the hospital for treatment. Another situation for treatment at home may be the non-availability of accommodation at the hospital but with the consent of the treating doctor. The treatment duration must exceed a minimum of 3 days to be eligible for domiciliary hospitalization cover in most plans.

The coverage limit for the same is mentioned in the policy document if the domiciliary hospitalization is covered in that health insurance plan. Some plans offer partial coverage of the total sum insured to address this facility whereas some plans allot full limit of sum assured.

13. Daycare Procedures Cover

In medical terminology, a daycare procedure is a treatment given to certain health condition which can be completed in less than 24 hours and the patient need not stay at the hospital. But irrespective of treatment duration some of such treatment procedures are expensive due to the use of advanced medical technology or involvement of highly skilled medical professionals or use of devices etc.

These details also are mentioned in policy wordings in the policy document. Check the documentation thoroughly to know about the health insurance terms and conditions before purchasing. 

14. Alternate Treatments Coverage like AYUSH

AYUSH stands for Ayurveda, Unani, Sidha, and Homeopathy. Some health insurance plans offer coverage for such treatment costs too. If you are planning to get such treatments then you can think of opting for health insurance plans with such option.

15. Ambulance Cover

Most of the health insurance plans cover the expenses incurred in ambulance service used to move the patient to the hospital and some plans even cover for air ambulance expenses. Prefer a health insurance plan with a sufficient limit to cover ambulance expenses.

Below mentioned are some perks in addition to the main features offered but they shouldn’t be the key factor to decide on which health insurance plan to purchase. But as a policyholder, you should have awareness about such features if they are offered in the policy you are going to purchase.

16. Daily Cash Allowance

Some health insurance plans offer a daily cash allowance to meet your daily spends while you are hospitalized. Anyhow this allowance will be minimal only to suffice expenses of daily needs during hospitalization. You can select plans with such an option if you wish to have cash benefits for meeting your daily expenses during hospitalization.

17. OPD Expenses Cover

Some health insurance plans also cover the expenses incurred in OPD treatments. If you prefer to have this option then choose plans that offer this feature.

18. Annual Health Checkup

Some health insurance plans offer a free annual health checkup worth some limit or a specific set of checkups as defined in their policy documentation. If this feature is covered in the health insurance policy there will be details about the same as what tests are covered in the policy.

19. Maternity Cover

Some health insurance plans include maternity cover and expenses incurred for newborn baby too. But such plans are a bit expensive compared to normal plans. You can prefer plans with this feature if you are at the stage of planning to have kids.

20. Organ Donor Cover

Organ donor expenses cover is one more feature offered by some health insurance plans. This facility covers expenses incurred for both the organ donor and receiver in case the insured person needs an organ transplant.

21. Corona Virus Treatment

A year ago there was no concept of coronavirus. After the Covid-19 global pandemic, all health insurance providers started to cover the medical expenses incurred in treating Covid-19. But one thing was causing the issue in the case of coronavirus treatment claims. That is the expense of consumables like surgical gloves, PPE kits, sanitizers.

Earlier, in most health issues, expenses of such consumables were not used to cross 5% of overall treatment bills. Hence it was feasible to pay that amount out of pocket by an insured person. But in the case of Corona Virus treatment, the scenario has changed as the major part of the treatment cost is of consumables like surgical gloves, masks, PPE kits, and sanitizers, etc. As such consumables are not covered in health insurance insured persons faced issues of high bills to pay out of their pocket.

After observing the situation IRDAI has advised all general and health insurance companies providing health insurance to introduce corona specific health insurance plans to address this issue. From 10th July 2020 onwards all health insurance providers in the Indian market started offering the corona specific plans named Corona Kavach and Corona Rakshak as per the IRDAI guidelines.

Read More: Top Up Health Insurance

What Are The Exclusions That Are Not Covered In A Health Insurance Policy?

insurance factors

Every health insurance policy will have some exclusion list which is generally mentioned in their policy document. Like you should know what is covered, it is equally important to know what is not covered also in a health insurance policy.

It is important to know them before you purchase the plan itself to avoid misleading beliefs and later disappointment. You will know what is covered and what is not, only if you try to know all the details about the plan you are purchasing.

By knowing these things you can minimize the claim rejection issues later when you have to claim your medical bills in case of hospitalization. Below mentioned are some examples of exclusions that may not be generally covered in a health insurance plan.

1. Pre-Existing Illnesses During the Waiting Period

Depending on the waiting period mentioned in the plan any hospitalization to treat a pre-existing illness within the waiting period is not allowed. Any health issue that is present at the time of policy purchase or acquired or diagnosed within 48 months before the issuance of the policy is considered as a pre-existing illness.

Health issues that may arise within 30 days after purchasing the policy is also not covered generally. Hospitalization due to accidental issues only is covered in the first 30 days after the initiation of health insurance.

2. Disease Exclusions in the first 2 years

Some diseases are not covered in the first 2 years after the purchase of a health insurance plan. This list is mentioned in the policy documentation. You should have an idea about these to know if you are eligible or not for a particular disease or condition in the initial 2 years of a health insurance policy. Some examples of such conditions are the treatment of non-infective arthritis, joint replacement surgery, and varicose veins.

3. Hospitalization due to Self-Inflicted Injuries

If hospitalization is due to self-inflicted injuries caused by an attempt to suicide, such expenses are generally not covered under any health insurance policy.

4. Hospitalization Due To War Or Similar Situations

Any treatment or hospitalization due to participation in war or any act of war situations, injuries, or health issues caused due to service in armed forces, etc. is generally not covered in health insurance.

5. Injuries due to participation in adventure sports

Hospitalization due to accidental injuries caused by participating in adventure sports is generally not covered in health insurance.

6. Hospitalization due to drug abuse or alcohol abuse

Hospitalization and treatment charges incurred in case of drug abuse or alcohol abuse are also generally not covered in health insurance.

7. Cost of Spectacles or Contact Lenses

Expenses incurred to purchase spectacles or contact lenses are generally not covered in a health insurance plan.

8. Congenital Diseases

Medical treatments targeted to treat birth defects due to genetic disorders or external factors are generally not covered in health insurance plans.

9. Dental Surgery or Treatment

Expenses incurred in dental treatment or dental surgery is generally not covered in a health insurance policy. The cost incurred in dental implants is also not covered in a health insurance plan.

10. Cosmetic Surgery

Medical expenses incurred in cosmetic surgeries are generally not covered in a health insurance policy.

11. Pregnancy Treatment

In general, there will be a waiting period for the expenses of pregnancy and childbirth for some specific years after the inception of health insurance or there will be no cover depending on the terms mentioned in the policy document. Some plans do cover maternity expenses; hence if you are looking for a health insurance plan to cover maternity benefits, look for this option in the policy while planning to buy health insurance.

Other important things to know if you are planning to buy health insurance

Apart from the above mentioned important factors and exclusions you should be aware of some basic terms and policy wordings if you have health insurance or planning to buy one.

You should be aware of what is covered and what is not covered in the plan, and what to do in case of emergency or planned hospitalization, about the procedure of health insurance claim process, etc.

terms-and-conditions

Selection of Hospital for Treatment

It is important to select a hospital that is recognized by the insurance company as its network hospital. Because to avail of a cashless facility, you must join the network hospital. Further, to avail the claim you must inform the insurance company or TPA of the insurer about your hospitalization as early as possible.

Inform the Insurer about Hospitalization

In the case of planned hospitalization, you should inform the insurance company at least 48 hours before admitting to the hospital. In case of emergency hospitalization, you should inform them within 24 hours after hospitalization. This can be done either by calling the customer care number of the insurance company or by directly submitting the form on their app or website depending on your feasibility and mode of the communication as mentioned in your policy document.

New Guidelines and Changes in Health Insurance

IRDAI is regulatory that guides all general and health insurance companies in India. It has introduced new changes after the Covid-19 outbreak to facilitate easiness and benefits to customers. It took initiative to bring new corona specific plans from July-2020 to cover Corona Virus treatment costs.

Keeping common people in mind, IRDAI advised all the health insurance providers to simplify the terminology used to mention the policy wordings for easy understanding. Recently IRDAI has announced to bring in a color-coding system in health insurance policies for easy categorization and understanding. IRDAI’s motive behind the color coding is to control the possibilities of misleading and help people choose health insurance easily.

Color coding is designed based on the complexity of the health insurance plan. It is categorized into three colors like Green, Orange, and Red. Green means the plan is simple and easily understood. Orange means the plan is moderately complex and Red means the product is more complex compared to the other two types.

Conclusion

The purchase of health insurance has become a necessity in modern times. Awareness about a health insurance requirement also has increased among people after the incidence of the Covid-19 pandemic. Unless you already have good health insurance coverage through a government scheme or from your employer, it is highly advised to purchase health insurance to cover your family soon. It may just cost a few hundred rupees every month but provides a great cushion of safety. Purchasing health insurance through online web aggregators is a very easy process and all the information is available about different choices in a very transparent manner.

For further guidance on choosing the best health insurance plan to cover your family, you can reach us. Our well-trained and certified team can guide you to choose the best health insurance plan to match your needs.

Looking for a Health Insurance Plan?

Contact us for honest and simple advice on health insurance

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