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Evaluating your Current Health Insurance Policy – Dos and Don’ts

Renu wanted to focus on her health. So, she joined the gym. After a month or so, she was fit, and her Instagram was looking great. That’s when she stopped going to the gym. Within a few months of quitting, Renu had gained all the weight that she had lost.

Consistency and Regularity

Does Renu’s story sound familiar? Ever been in a situation where you are obsessed with a new, exciting activity? Initially, you love the activity. However, as the nuance fades, it isn’t so exciting anymore. Almost all of us have behaved in this manner at some point in our lives, and some of us trudge along with our lives, repeating this pattern in almost everything we do.

However, life always rewards those who are consistent and regular. It is the same for your career, fitness, personal finances or health insurance.

You Change and Grow over Time

You did not have the same body you had when you were younger—neither the same designation, income and expenses. One probably have your spouse, children and senior parents to take care of now.

Medical Inflation

The cost of good hospitalisation has been increasing over the years, and it will cost you much more today than a few years back. This is because the cost of medicines, tests, procedures, room rent and consultations has gone up. This rising cost of medical expenses over time is called medical inflation.

Is your Health Insurance Adequate?

You have grown, hospitalisation expenses have gone up. You still have the same health insurance, which you probably purchased a few years back. Have you ever spared a moment to think if it’s adequate? When was the last time you evaluated it?

You need to exercise regularly to keep fit. Similarly, you need to evaluate your health insurance regularly to ensure that it is adequate. Do you want to know what to take care of while evaluating your health insurance? Here are some Dos and Don’ts.

Do’s

Look carefully at the following aspects of your health indemnity insurance:

Understand the Coverage Limits

There may be specific limits set for individual items like room rent and class, for example. Understand these limits by carefully reading the policy document. Are they sufficient for your current life situation?

Pre-existing Diseases: Inclusions and Exclusions

Study your family history. Which diseases is your family prone to? Are they included in the pre-existing diseases list?

Waiting Periods for Pre-Existing Diseases

Carefully examine the waiting periods for pre-existing conditions. They must be reasonable and practical vis a vis the current condition of your family members.

Copayment clause, if any

The copayment clause is applicable at the time of making a claim. Consider a claim of ₹1 Lakh. Suppose copayment is 20%. Here, you will have to pay ₹20,000/- out of your own pocket. The insurance company will pay the rest, i.e. ₹80,000/-. It is a good idea to avoid or reduce copayment clauses as far as possible.

Terms and conditions around renewal

Look at the age limits for entry and renewal in detail. For how many years can you renew your policy in the future? Plan your cover accordingly.

Renew the policy regularly without any gaps

There should not be even a day’s gap in your insurance coverage. Gaps in insurance coverage can lead to loss of benefits. Your waiting period for a pre-existing condition coverage may be reset if there is a gap.

Porting health insurance is an option

Remember that porting health insurance from one insurance company to another is an option. This is subject to the terms and conditions set out by the IRDAI (Insurance Regulatory and Development Authority of India). If you are not satisfied with your insurer, plan or coverage, you may consider porting. However, it is advisable to first talk to the current insurer and seek redressal of issues. 

Consider porting options during evaluations. Weigh the pros and cons. Ask yourself: Is it worth the jump?

Don’ts

Focus Only on Premium and not on the Overall Plan

Good health insurance is a package. It consists of pre-hospitalisation cover, post-hospitalisation cover, hospitalisation cover, network hospitals and cashless hospitalisation, among others. Do not evaluate health insurance only on the premium offered. Evaluate the whole package.

Rely on Employer Provided Insurance only

Employer provided insurance is a very good retention benefit offered to a lot of employees. However, you have very little control over the terms, conditions and limits of the plan. Also, the cover lasts only as long as the employment.

Allow any Gaps During Renewal

A lot of waiting periods and coverage terms mandate that there be no gaps during renewal. Even a gap of a single day can lead to the loss of these accumulated benefits.

Let Past Record of no Claims Lead to Non-Renewal of Policy

You did not have to claim health insurance in the past. However, it does not mean that the future may be similar. A good health insurance indemnity plan aims to safeguard your finances from medical expenses.

Evaluating your health insurance regularly and consistently is a very good practice. Always remember the question to ask yourself during every evaluation. Does my health insurance adequately cover my family and me in my current situation?

Read more about Right Time to Reevaluate your Existing Health Insurance


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