Health Insurance - Points To Understand Before Purchase

Some people thinks that since they are young and living a healthy life they don’t required any health insurance and purchasing health insurance is totally waste of money. But what they do not understand that medical emergency can arise anytime and we should be well prepared for that because medical treatments are getting costlier day by day and it can make a big hole in your savings which could affect your future goals.

One of the best ways to prepare for such situation is to get health insurance for the future medical expenses. Now the question is which health insurance to choose, what the common terms are and how much should be the sum assured. To get these answers let’s try to understand the types of health insurance and there features.

Types of Health Insurance

Currently there are two types of health insurance is available is the market: 

•  Individual Plan

In this plan total premium computed based on total number of insured persons and each insured will be having separate health cover. If you want you can vary the cover for each individual depending on health conditions. 

• Family Floater

This is the new concept in health insurance. In this plan total premium computed based on the age of the oldest person to be insured and the total number of insured persons and total sum insured will be shared by all the members depending on need. 

Sum Assured 

This is the maximum amount of health insurance which you can utilize either by cashless hospitalization or by making claims after the treatment. Based on the current health of insured person you can decide about the sum assured. If you are planning to do some treatment in future then figure out the approximate future cost of the treatment and decide the sum assured. It’s better to increase the sum assured every year. 

Deductible Amount 

Deductible amount is the amount which will be borne by the insured person from his personal account and after the exhaustion of deductible amount you can make a claim. Please note that you claim only the amount which you have spent on treatment after the deductible amount limit. Do not choose a deductible if you don’t have any other health insurance policy. 

Initial Waiting Period 

When you purchase a health insurance policy, it will not be in force immediately. Almost all the policies have some initial waiting period to become the policy in force and it varies from 30 days to 90 days depending on policy term and conditions, however some insurers excludes this initial waiting period for emergency cases.

Do consider this before selecting the health insurance policy. 

Waiting Period for deceases/treatments 

After completion of initial waiting period your policy comes in force but still it imposes waiting period for covering some deceases/treatments (i.e. cataract, maternity etc.). This waiting period varies from 2 years to 4 years. Some insurer has excluded this waiting period if treatment is not for pre-existing deceases.

Do check about this before selecting the health insurance policy. 

Waiting Period for pre-existing deceases 

Every insurer is having some waiting period for covering pre-existing deceases and again it varies depending on age of the insured person and the diseased type. Normally 2 to 4 years is the time frame of waiting period for pre-exiting diseases.

Do check about this before selecting the health insurance policy. 

Free Lock Period 

Free lock period is the number of days after receiving the policy document you can cancel the policy if you have any objection to policy terms and conditions. If you cancel the policy during this period you will get all your money back after deducting the expenses occur to issue the policy. Normally free lock period varies from 15 days to 30 days.

It’s also important to check the free locking period before selecting the policy so that you can cancel it if you are not satisfied with the policy terms and conditions. 

TPA (Third Party Administrator) 

Always purchase the policy directly from insurer, do not purchase it from the TPA. TPA is the link between you and the insurer. So if your policy is having any TPA then You have to make claims through TPA which can lead to delays in the claim settlement. Also terms and conditions of the policy could differ from the policy from direct purchase. 

Cashless Hospitalization Facility for Network Hospitals 

Now these days you can use the cashless hospitalization facility for network Hospitals. So do check whether your insurer is proving you cashless hospitalization facility or not and how many hospitals come under network hospitals. This facility removes the hassle to claim procedures. Do understand that cashless will not remove the paper work. You need to do all the paper work and prior approval is required for cashless hospitalization. 

Tax Benefit 

Health insurance policy premium is tax exempted under section 80D. One can avail tax benefit up to 15000 for self, spouse, children and non-senior citizen parents and up to 20000 for self, spouse, children and senior citizen parents.