Ask these questions before buying a health insurance policy

Before buying a health insurance policy, it’s crucial to do your homework. Once you’ve determined how much coverage you need and which company to buy from, your next step should be to scrutinize the product itself. To ensure you choose the right policy, ask your insurance agent or check the policy documents to answer these essential questions:

1. Are there any sub-limits?

In emergencies, it’s hard to predict what type of hospital room you might need. Policies with sub-limits may cap the amount your insurer will pay for certain expenses, like room rent, diagnostics, and doctor’s fees. Choosing a policy without sub-limits can help you avoid unexpected costs during a claim.

2. What does the plan cover?

Start by asking what your policy will cover. There are various health insurance plans available, such as basic hospitalization cover, critical illness plans, and disease-specific plans. If this is your first health insurance policy, opt for a basic indemnity or hospitalization plan. After securing basic coverage, consider adding a critical illness plan or disease-specific coverage for extra protection. Remember, a basic indemnity policy reimburses actual hospital expenses, while a critical illness plan pays a lump sum upon diagnosis.

3. Does it have a co-payment feature?

Co-payment clauses may require you to pay a portion of the medical bill, sometimes as high as 20%. Additionally, around 10% of non-payable items may be excluded, making the actual deduction higher than the stated co-payment percentage. Clarify these details to avoid surprises during claim settlement.

4. How much no-claim bonus does the policy offer?

For every year you don’t make a claim, you’re typically rewarded with an increased sum insured at no extra cost. This no-claim bonus can range from 5% to 100% depending on the policy duration. Make sure to understand how this bonus works so a small claim doesn’t reduce your accumulated bonus.

5. How long is the waiting period?

Most health insurance policies have a waiting period for pre-existing conditions, meaning they aren’t covered from day one. As per Insurance Regulatory and Developmental Authority, all pre-existing illnesses need to be covered after three years, but some insurers offer shorter periods, as little as two years. It’s wise to choose a policy with the shortest waiting period. Also, be transparent about your medical history when filling out the application; undeclared conditions may not be covered later.

6. What are the exclusions?

Every health insurance policy has a section detailing exclusions. Understanding these upfront will help you know what isn’t covered. For example, critical illness policies often have a survival clause requiring the policyholder to survive 30 days post-diagnosis. Similarly, indemnity policies may not cover any claims during the first 60 to 90 days of coverage.

7. What is the claim settlement ratio of the company?

The claim settlement ratio is a critical metric for any policyholder, as it reflects how well an insurance company handles claims. Naturally, people gravitate towards companies that rank high in this regard. However, while the claim settlement ratio is an essential factor when choosing a health insurance policy, it shouldn’t be the only one. Newer companies often have higher claim ratios due to their smaller customer base, which can skew the numbers.

8. Does the insurer cover the main hospitals in your city?

Insurance companies often advertise their extensive network of hospitals, but it’s more important to focus on the hospitals in your specific area or city. Rather than being swayed by impressive numbers, check how many of the hospitals near you are covered by the insurer. This ensures that in an emergency, you won’t waste precious time searching for a network hospital when you need coverage the most.

9. Are there any add-on covers?

Many policies include optional add-on covers or in-built riders, which you might not be aware of. Before finalizing your purchase, ask your agent about any additional features and assess if you actually need them.

10. Are there any permanent or time-limited exclusions?

Some policies have permanent exclusions for certain conditions, even if they aren’t pre-existing. Ask your agent about any such exclusions. Additionally, inquire about time-limited exclusions for other conditions that aren’t pre-existing.

11. Are there any treatment-specific limits?

Some policies impose limits on specific treatments, like maternity or knee replacement. If you anticipate needing such treatments, understanding these limits is essential, especially if your sum insured is substantial.

Taking the time to ask these questions will help you make an informed decision, ensuring that your health insurance policy meets your needs when it matters most.