With the emergence of the COVID-19 issue, many people started to take health insurance plans to protect their families. But due to overwhelming promotional content on the web, it might be confusing to decide about the best plan that matches their need. Without proper knowledge and lack of awareness about the terms and conditions mentioned in the health insurance policy documents, most people end up purchasing plans that are generally suggested by insurance agents.
However, an ethical insurance advisor would guide you to choose the best match that suits your need based on several factors. As an end-user, you should be aware of different elements of health insurance which play a key role in deciding which plan is best for you.
As an active insurance advisor, I come across many users who ask for the best health insurance plan for family or the best health insurance policy for parents. Here are some basic and deciding factors to consider before investing in a health insurance plan.
The foremost key element to consider while purchasing health insurance is to select the right amount of sum insured. The sum insured amount must be chosen keeping in mind the inflating medical costs and the total number of persons in the family getting insured their overall health.
Room Rent Limit
The room rent limit is the amount allowed to be spent towards the room rental charges in hospitalization. It is important to check this option in the policies while comparing multiple options to choose the best one. Because the room rent clause can decide the portion of bills the insurance company is going to pay at the time of claim settlement and how much you might be paying based on any sub-limits on room rents.
Some insurance companies mention room rent in terms of room fee limit and some mention in terms of room type such as single room without sharing, twin sharing, and deluxe room. Plans that mention it either as room type or plans with no-limit on room rent are best comparatively. It is because the prices may change and increase after a few years of your purchase and may not be the same as mentioned in the plan.
The waiting period in health insurance means the period during which there can be no claim based on conditions mentioned in the policy documentation. Almost all health insurance companies in India come with 30 days of waiting period which begins at the beginning of the policy period. No claim can be done during this period, but hospitalization due to an accident could be claimed.
Apart from this, there will be a waiting period if the insured person had any existing health issues at the time of purchasing the policy. Health issues discovered within the first 30 days after the commencement of the policy are also considered as pre-existing diseases.
This waiting period generally varies from plan to plan and company to company ranging from 2 years to 4 years. Health Insurance plans with less waiting period cost high comparatively.
In all health insurance policies, some specific health conditions are covered only after 2years. Few examples of such diseases are cataract surgery, joint replacement surgeries, hydrocele surgery, and varicose veins treatment. There will be a section mentioning this list in the policy document. It is advised to read that before you finalize the plan.
Network Hospitals List of Insurance Company
Another important aspect to look for in a health insurance plan is the network hospitals list. It is related to the insurance company but not the individual plan. A network hospital is a hospital that has a tie-up with the insurance company, and you can get the treatment without paying for the hospital bills out of your pocket.
If you are thinking that once you purchased a health insurance plan from say an X insurance company and can avail treatment at any hospital without paying money from your pocket, it is not true in every case. To avail of the cashless facility at a hospital, that hospital must be recognized by the health insurance company as a network hospital. In other words, your policy must be allowed to claim in the hospital you choose for treatment.
What if the hospital you choose is not in the network list of the insurer? Well, this would be a second scenario, where you would be paying all the hospitalization bills and claim for reimbursement later by submitting all the bills in original along with the claim form. This would be a tedious process for anybody. Hence it is advised to select plans from an insurer with a wide network of hospitals in your area.
Claim Settlement Ratio
Another important aspect to decide on the best health insurance plan is the claim settlement ratio. It is also related to health insurance providers but not individual policy. The claim settlement ratio is calculated based on the total number of claims settled versus the total number of policies sold in a year. Every company mentions its CSR details in its documents or website. An insurance company with high CSR means it is doing well in terms of claim settlement of policies it sold.
IRDAI (Insurance Regulatory and Development Authority of India) also releases an annual report on their portal which can be accessed by the general public too. This data can help to know about the performance of the insurance company.
On top of all, it is important to read the terms and conditions mentioned in the product brochure specific to health insurance plans and compare multiple plans offered by different companies to arrive at an informed decision.