Health Insurance Buying Guide: Choosing a policy with just a low premium is not enough when buying health insurance. Policy conditions are equally important. Factors such as room rent limits, co-payment, disease-related limits, waiting periods, and hospital networks can significantly affect a claim.
Speaking on a Business Today show in response to questions from senior anchor Sakshi Batra, Aditya Shah, Founder of Hercules Advisors, shared an essential checklist for health insurance buyers and explained what they should keep in mind while purchasing a policy. He said that buying a policy simply by looking at a large sum insured is not the right approach, as policy conditions can often limit the amount payable at the time of a claim.
1) Room Rent Limit Can Cause Losses
According to Aditya Shah, the first thing to check while buying health insurance is the room rent limit. He said that room rent should be unlimited.
If a policy has a fixed limit on room rent, the entire hospital bill can be affected. In such cases, deductions may apply not just to the room charges but to the entire hospital bill.
2) Advice to Avoid Policies with Co-Payment
Shah advised avoiding co-payment clauses. Co-payment means that at the time of a claim, a certain portion has to be paid by the customer themselves.
According to him, a policy should be one in which the customer does not have to pay any part of the hospital bill out of their own pocket, because during a major treatment, this amount can be significantly high.
3) Understand No-Claim Bonus and Medical Inflation
In health insurance, the no-claim bonus or cumulative bonus is also an important feature. Shah said that a good policy offers the option to increase the cover every year.
He said that medical inflation today is around 14 percent, which makes an increasing cover necessary over time. A static cover may prove insufficient in the face of rising treatment costs in the future.
4) Check Disease-Specific Limits Carefully
Aditya Shah also cautioned about disease-specific limits, or sub-limits. He said that policies often show a large cover, but a separate limit is set for the treatment of certain serious illnesses.
Giving an example, he said that some top-up policies offer a cover of Rs 1 crore, but the limit for a disease like cancer may be only Rs 5 lakh.
5) Look at the Benefits That Help at the Time of a Claim
Shah also emphasised the importance of consumables cover. Expenses on items such as PPE kits and syringes in a hospital can account for 20 to 40 percent of the total bill.
In addition, while buying a policy, one should check the waiting period for pre-existing diseases and the availability of nearby major hospitals in the cashless network.
While buying health insurance, it is important to understand not just the cover shown in the brochure but the full terms of the policy, so that it can provide the right protection when needed.
Disclaimer: This article is for information purposes only and should not be treated as investment advice in any form.
