You can be someone who sticks to your budget, has a sizeable savings corpus and an impressive investment portfolio and still not be financially prepared for the future. Yes, you read that right. Financial discipline and dependable wealth is a great step for the future, but not having a health insurance policy is a major red flag you need to come to terms with.
Unfortunately, we are living in an era full of illnesses and diseases. Thankfully, we have cures for most of the major diseases the world is plagued with. But here’s a deal breaker, treatments for such diseases can get expensive. So doesn’t matter if you have oodles of wealth at your disposal; you are always one illness away from exhausting your savings or facing a severe financial crunch.
This is when you can depend on a health insurance policy. It’s your go-to way of staying protected from the financial consequences of illnesses and accidents. However, buying a health insurance policy is not like buying any random product. A lot of research goes into it. There are certain things you need to look for.
So, if you are purchasing health insurance policy for the first time, here is what you should look for.
Things to Look for When Purchasing a Health Insurance Policy
- The Waiting Period:
When do you think is the right time to purchase a health insurance policy? When you’re diagnosed with a critical disease? No, it doesn’t work like that. A health insurance policy comes with a waiting clause, wherein you cannot make any health insurance claim. This waiting period exists for numerous pre-existing illnesses and can range from 24 to 48 months, depending on the health insurance provider.
That said, whether you have a pre-existing illness or not, the waiting period is unavoidable. Almost all health insurance policies have a waiting period clause. You must know the waiting period for the Mediclaim policy you are planning to buy. It is advised that you look for an insurer that offers you a minimal waiting period.
- Co-Payment and Sub-Limit Clause:
Did you know that a health insurance provider might not pay 100% of your hospital bill or may not provide for certain medical procedures? Yes, you read that right. This is because of the co-payment and sub-limit clause that health insurance policies come with. Let’s understand them one by one.
A co-payment clause obliges a health insurance provider to pay only a certain percentage of the medical bill; the rest has to be borne by the policyholder. For instance, some health insurance providers can offer to pay 90% of the medical bill, while policyholders can pay 10% of the bill. This is just an example; the ratio varies from insurer to insurer.
A sub-limit clause, on the other hand, poses a coverage limit on certain medical procedures or facilities. For instance, a health insurance provider may pose a limit of 50,000 on a knee-replacement surgery. This means the health insurance provider will provide coverage for the set limit, not beyond. The difference has to be funded by the policyholder.
Now that you know how co-payment and sub-limits clause works, you must know if your health insurance policy has one. If you are still deciding, ensure that you look for a health insurance policy that doesn’t come with such caps and limits. If you don’t find any, go for the insurer with negligible limits.
- Cashless Hospitalization:
Before elaborating on this point, let’s understand how standard health insurance works. In case you meet a medical emergency, you pay the hospital bills first and then get reimbursed upon making a health insurance claim.
However, if you have a cashless hospitalization benefit in your policy, you don’t need to pay the bill; the insurer would directly settle the bill without having you meddle in between.
This feature can offer relief to those policyholders for whom liquidity is an issue. However, for this feature to work, you must ensure that the hospital of your choice is in the insurer’s list of network hospitals.
The Bottom Line:
These were some lesser-known pointers that everyone might not know, especially those purchasing a health insurance policy for the first time. Apart from that, other factors such as health insurance coverage, policy inclusions and exclusions, premium, lifetime renewability, and no-claim bonus should also be known before you make a health insurance purchase decision.