When reviewing your health insurance policy, it's crucial to be cautious. There might be hidden traps and mistakes that you need to watch out for. It's about more than just reading and understanding the terms and conditions. This understanding empowers you to ensure you get the health coverage you need and deserve and to avoid potential pitfalls in health insurance policies.
First of all, we need to understand!
What is Health Insurance or Health Coverage?
Medical expenses can be staggering. However, health insurance or health coverage can provide a safety net. This insurance policy is designed to cover various health-related expenses, shielding you from high healthcare costs. Whether provided by private insurance companies or the government, health insurance typically covers a range of medical services, from doctor visits to surgical procedures. Health insurance offers a reassuring layer of financial security by ensuring you can access necessary medical care free from financial constraints.
Let's put this into perspective.
If a hospital charges two lakhs today for a specific treatment, the same treatment next year could cost you 2.28 lakhs. That's because medical inflation, which refers to the cost of medical services and treatments over time, has increased by 14%, a trend mirrored worldwide with a 10% increase.
Regarding medical expenses and bills, Health Insurance comes into play.
Why is health insurance necessary?
Health insurance is necessary because it provides a safety net against the unpredictable and often high costs of medical care. For instance, a simple visit to the emergency room can cost 50 lakhs or even one crore. Without health insurance, individuals may be in difficult financial situations due to unexpected medical expenses. Health insurance also ensures that you shouldn't worry about how you manage the cost of essential healthcare. You deserve to get the best treatments you require without bearing the burden of financial stress, thus promoting overall health and well-being. Additionally, many countries have laws that require individuals to have health insurance, making it a legal requirement as well.
Importance of Health Insurance
Consider this: if you still need health insurance and rely on your savings, remember that medical expenses can be unpredictable and costly. Without health insurance, you could find yourself in a financially challenging situation if you require medical care. It could deplete your savings in a fraction of the time it took to accumulate them, leaving you with the daunting task of rebuilding your financial security. In such cases, investment , financial planning and real state Investment can be a lifeline.
You don't need to worry about health coverage if you have millions in your bank account like Bill Gates.
Health insurance is still essential even if you have 30 or 40 lakhs or more in your bank account. With rising medical inflation and unpredictable treatment costs, you never know when you might be hit with a million-dollar medical bill. It's better to be safe than sorry, so ensure you have the right health coverage to protect yourself and your finances.
How much health insurance coverage is enough?
The appropriate level of health insurance coverage required can vary depending on a person's unique circumstances, such as their health status, financial situation, and geographic location. Also, the main points that have to be considered when planning Insurance coverage are
- Do you have any existing diseases?
- How many responsibilities do you have?
- What are your monthly expenses, including those for your home and others?
- Which place you are living in?
- What are you planning to purchase in the future?
It doesn't look straightforward, but once you calculate the above points, you can determine how much coverage is enough because coverage varies from person to person.
Our Point of View
With rising medical inflation and data for children, 5 Lakhs and 10 Lakhs of Health Insurance coverage is necessary for Adults.
How many types of Health Insurance are there?
There are two types of Health Insurance. They are Family Floater and Individual Health Insurance Plan.
Family Floater Plan
A Family Floater Health Insurance Plan is a comprehensive health insurance policy that offers coverage to the entire family under a single plan. It covers all family members, including children, spouses, and parents. The sum insured, the maximum amount the insurance company will pay for covered services, is shared among all family members. Any member can use it for hospitalization or medical expenses.
This type of policy is an excellent option for families with multiple members who want to have a single policy with a higher sum insured. It is also cost-effective compared to buying individual policies for each family member. The policy cost is determined by the selected sum guaranteed and the age of the oldest member covered.
Family Floater Health Insurance Plans are a convenient and affordable way to provide health coverage to all family members under a single policy.
But there are some invisible traps we want to let you know.
Let's assume that if you take a floater plan of 20 lakhs for five people covered, every member will have four lakhs coverage in case of hospitalization. It means if one family member is hospitalized in a year and exhausts the amount of 10 lakhs, then only ten lakhs will be left for three members of your family, leaving the other family members with limited coverage for any further medical expenses.
Another disadvantage of family floater plans is that the age of the oldest member covered determines the premium. Suppose an older family member is included in the policy. In that case, the premium may be higher than individual policies for younger family members. Additionally, suppose the oldest member reaches the policy's maximum age limit. In that case, the policy may no longer be valid for family members.
Third, the policyholder may need more control over utilizing the fully guaranteed. Suppose one family member exhausts the sum insured. In that case, the policyholder can only renew the policy the following year. It can be problematic if other family members require medical care during that period.
Let's imagine three people are fit and healthy, and two eldest have existing diseases, such as diabetes or heart conditions. In that case, the policy company increases the premium and charges it based on the existing diseases and age. Your floater plan includes five members, but two must pay the same premium as the eldest.
Suppose your three members are the same age, and two are the eldest. In that case, you can combine the same-age people in one group and the other eldest members in another group and buy a premium. By doing this, you and your family can claim a tax deduction for both policies in Section 80D.
Consider this and understand Floater Insurance before buying a premium.
Now, let's talk about hidden traps the insurance company doesn't want you to know about.
If you are a health insurance policyholder or considering purchasing health insurance, you must be aware of potential scams that some health insurance companies may not disclose. These hidden scams can negatively impact your coverage and financial well-being, so it is essential to stay informed and vigilant.
What are the Traps and mistakes lurking in your Health Insurance Policy?
Hidden Deductibles
Some health insurance companies may need to tell you the amount you must pay before your coverage starts, but sometimes they don't. These can result in unexpected expenses you must pay out of your pocket.
Pre-existing condition
Knowing that before buying health insurance, some companies may decline coverage for pre-existing conditions is essential. Pre-existing conditions refer to illnesses before acquiring your health insurance policy. It means that if you have a pre-existing condition, you may not have access to medical care or treatment for that particular condition. It can be a noteworthy consideration for individuals with chronic illnesses or long-term health conditions. As a result, it is crucial to review the terms and conditions of your health insurance policy carefully and understand the limitations that may apply to pre-existing conditions.
Limited network coverage
Some health insurance companies may limit your access to certain healthcare providers or hospitals, resulting in insufficient care or higher out-of-pocket expenses.
Denied claims
When you file a health insurance claim, you expect it to be processed and approved without issues. However, there are models where insurance companies may deny your claims, even if they are legitimate. These can be due to various reasons, such as errors in documentation, lack of medical necessity, or not meeting specific policy criteria. Denial of claims can lead to financial loss and inadequate care, leaving you stranded with medical bills you thought were covered by your insurance policy. It is essential to understand the terms and conditions of your policy and be prepared to appeal the denial if necessary.
Fine Print
Before signing up for a health insurance policy, it's essential to read and understand the terms and conditions carefully. Some policies may have complicated wording that can be difficult to comprehend. Be sure to take your time and ask any questions that you need to help understand what you're signing up for.
Sub-Limits
Sub-limits refer to the maximum amount an insurance policy will pay for a specific medical expense or category of costs. Let us clear you: even if the overall sum insured is high, there may be sub-limits on particular costs, which could limit the amount of coverage available for those expenses. Sometimes, you can be tricked into getting 50 lakhs of coverage at a cheap premium. If you signed up for this policy, you are fooling yourself. But you'll never be able to claim a coverage of 50 lakhs. It is essential to review the sub-limits in a health insurance policy to ensure that you are fully aware of the coverage available for each type of expense.
Room Rent Cap
When you buy health insurance, the policy company will pay a maximum amount for your hospital room. It is called the "room rent cap." It's an essential factor to consider when choosing a policy because it can affect how much you pay for your hospital stay.
People sometimes need to make sure they choose a room that costs more than the cap set by the insurance company. In those cases, the insurance company will only pay a portion of the bill; you must pay the rest out of your pocket.
Another trap to watch out for is when the insurance company sets the room rent cap as a percentage of your total coverage.
For example, if you have coverage for five lakhs and the room rent cap is 1% of the total coverage, the maximum amount the insurance company will pay for your room is 5,000 rupees per day. If you choose a room that costs more, you must pay yourself.
To avoid falling into these traps, it is essential to carefully read and understand the terms and conditions of your health insurance policy. Make sure you choose a policy with a room rent cap that is appropriate to your needs and budget. Also, check for any sub-limits or exclusions that could impact your coverage.
It's also good to compare policies from different insurance companies to ensure you get the best health coverage.
Co-Pay
Co-pay is a type of cost-sharing in health insurance. In some written insurance policies, the policyholder pays a fixed percentage of the medical expenses out of pocket. For example, suppose a health insurance policy has a 30% co-pay clause. In that case, the policyholder pays 30% of the medical expenses, and the policy company bears the remaining 70%. The co-pay amount is usually pre-decided by the insurance company and mentioned in the policy document.
Let's assume you have a coverage of 20 lakhs. Because of the Co-pay, you have to pay six lakhs yourself, and you can claim the remaining 14 lakhs from the insurance.
Then, the question arises.
Why I'm Paying Premium?
We buy premiums for future health security without affecting savings. Still, we must pay extra due to co-pays and insurance clauses. Then why do we need health insurance when the policy company offers more circumstances than facilities?
Remember, your health is essential, and you deserve the best care possible. Don't let these hidden scams prevent you from getting the necessary coverage and care. Stay informed, stay vigilant, and always prioritize your health.
What is the waiting period for Health Insurance?
A waiting period is a specified period during which the insured individual is not entitled to receive the benefits of the health insurance policy. It is usually designed to prevent fraud and ensure that the insured individual has been a policyholder for a particular period before they can make a claim. The waiting period typically varies depending on the type of policy and the insurer.
There are around 4 to 5 types of standard waiting periods.
First Waiting Period
It is the standard waiting period of 30 days. If you buy a premium today, you can claim insurance only after 30 days.
But the thing is, most of the surgery or any critical treatments you plan before a month or week. Still, accidents are not predictable, and you cannot predict which day or time they will happen.
If you buy a premium today and between 30 days, you face an accident that you need to be admitted to the hospital, and you want to claim insurance, but you can't due to the waiting period of 30 days.
Make sure when signing up for premium whether accidents are allowed between waiting periods.
90 Days of 2nd Waiting Period for Critical Illness
When buying a premium, you must ensure the waiting periods for critical illnesses are 90 days or less. What critical illnesses are included?
Also, the policy executive should be asked whether maternity benefits can be claimed between 9 and 36 months.
3rd Waiting Period for pre-existing disease
It is basically for people with a pre-existing disease related to a heart condition or diabetes who want to get Medicare for it. Usually, the waiting period for this kind of situation is 3 to 4 years, depending on the policy company. You have to survive to claim when you buy a premium with a pre-existing disease.
We suggest you buy an affordable health premium when you don't have any medical issues.
Waiting Period for Slow-Growing Disease
If you have a disease like TNT disorder, Hernia, Cataract, Osteoporosis, joint replacement surgery, and other diseases or don't have any, but when you buy insurance for this specific policy, you must wait a maximum of 2 years.
Restoration of Sum Assured
Restoration of sum assured is a feature offered by some health insurance policies that can prove helpful in certain situations. Suppose you have a policy with this feature. In that case, if you exhaust your sum assured during a policy year due to multiple claims, the insurance company will restore the entire sum assured amount for you to use for any future claims within the same year. You can again claim for the same or a different illness during the same policy year without further financial burden.
This feature is particularly beneficial for those more likely to require medical treatment due to pre-existing conditions or a family history of illnesses. It can also be helpful for those who have opted for a lower sum assured due to budget constraints, as it provides an extra layer of financial protection.
At the same time, not all health insurance policies offer the RSA feature; even those may have specific limitations or conditions attached to them.
Condition #1
If you have a coverage of 20 lakhs per year and it is restored in the same year, it might not be restored after the second restoration.
Condition #2
After the restoration, is it possible to use the coverage for the same diseases or other diseases? If yes, then it is a great benefit, but if not, then you have to be prepared from the beginning.
Zonal policies
If you were born in a rural area but grew up in a city where you lived on rent, in apartments, or a home, if you sign up for a premium by mentioning your birthplace address and go to claim the policy at the city hospital, your co-pay will be increased up to 20%.
If you are from a rural area, mention your address. If you temporarily live in the city, you must mention your birthplace address.
If you are from a city area, then provide your city address.
This way, you can avoid an extra amount.
Most policies are pan-Indian, but checking whether your buying policies are Zonal or pan-Indian is essential.
List of Exclusion
It refers to the diseases and treatments that some cannot claim.
When buying a premium, you must ask for a list of Exclusions.
Some health insurance policies have introduced a scheme where you may not be able to claim coverage or receive medical treatment if the hospital you want to go to or have already gone to is not listed in your policy.
Example:
Suppose the hospital you choose is outside the network of hospitals listed in your policy. In that case, you may have to pay the medical expenses out of your pocket, even with health insurance coverage. It's important to review your policy carefully and ensure that the hospitals you frequently visit or may need to visit are included in the network of hospitals listed in your policy.
Cashless claim and Reimbursement
Regarding health insurance, there are two ways to make a claim: cashless and Reimbursement. Let me explain the difference between them and which method is best suited for you. With cashless claims, we don't have to pay the hospital bills directly out of our pocket. The hospital bill is settled by the insurance company directly instead of being paid by the patient. We don't have to worry about arranging funds for medical treatment. We have to show our health insurance card at the time of admission to the hospital. However, our insurance provider's network hospitals only offer a cashless facility.
On the other hand, reimbursement claims involve paying the hospital bills first and then getting the amount reimbursed from the insurance company. The policy will be applied when we get treated in a non-network hospital or cannot avail of the cashless facility for some reason. In this case, we must submit all the original bills and documents related to the hospitalization to the insurance company. After verifying the documents, the insurance company will reimburse the eligible amount.
Now, the question arises: which method is best suited for you?
Cashless claims are the best option if treated in a network hospital. This way, you don't have to worry about arranging funds for the medical treatment, and the insurance company takes care of the bills directly.
However, suppose you are getting treated in a non-network hospital or, for some reason, cannot avail of the cashless facility. In that case, reimbursement claims are the only option. To sum up, the main difference between cashless and Reimbursement claims is that in cashless claims, the insurance company pays the bills directly to the hospital.
In contrast, in reimbursement claims, we pay the bills first and then get reimbursed later.
But now, many policies implement cashless claims only in their network hospitals. If you go to hospitals outside the insurance network, you'll not get coverage, even a reimbursement claim. Otherwise, you must pay all the medical bills from your savings.
Ensure that cashless and Reimbursement claims are included when signing up for premium.
(We will deeply research the sites and policy companies available now, show you how to choose the best insurance, and guide you through the forms step-by-step.)
Top-up and Super Top-Up Policies
Regarding health insurance, top-up and super top-up policies offer additional coverage beyond the basic plan. These policies provide an extra safeguard against expensive medical bills that could exceed the coverage limits of the basic plan.
A top-up policy is an add-on plan that offers additional coverage over and above the basic health insurance plan. It comes into play when the basic sum assured is exhausted.
For example, suppose you have a basic health insurance policy with a sum assured of Rs. 5 lakh, and you purchase a top-up policy with a sum assured of Rs. 5 lakh. In that case, you will be covered for Rs. 10 lakhs. The premium for the top-up policy is relatively lower than the premium for the basic plan.
On the other hand, a super top-up policy is similar to a top-up policy but with a significant difference. It offers coverage for multiple claims in a year, even if each claim is below the threshold limit of the basic plan. For instance, if you have a basic health insurance plan with a sum assured of Rs. 5 lahks and a super top-up plan with a sum assured of Rs. 10 lahks, you can make multiple claims throughout the year. The total amount will be covered up to Rs. 10 lakh, subject to the deductible.
Advantages of Top-up and Super Top-up Health Insurance Policies:
1. Cost-effectiveness: Top-up and super-top-up policies are cost-effective as the premium is relatively lower than the premium for the basic plan.
2. Additional Coverage: These policies provide additional coverage beyond the basic health insurance plan, which is helpful in case of high medical expenses.
3. Multiple Claims: Super top-up policies offer coverage for multiple claims annually, even if each claim is below the primary plan's threshold limit.
Disadvantages of Top-up and Super Top-up Health Insurance Policies:
1. Deductible: These policies have a deductible, the amount the policyholder must pay before the insurance coverage begins.
2. Limited Coverage: Top-up and super top-up policies offer coverage only after the basic sum assured is exhausted.
3. Limited Coverage for Pre-existing Diseases: These policies may have limited coverage for pre-existing diseases, which may disadvantage people with pre-existing medical conditions.
In conclusion, top-up and super top-up policies offer additional coverage beyond the basic health insurance plan, which is helpful in case of high medical expenses. However, these policies come with certain limitations and deductibles, which must be considered before purchasing them.
Corporate Plan and Individual Health Insurance Plan
Health insurance is an essential aspect of life that provides financial protection against the unpredictable and often high costs of medical care. When considering health insurance, individuals have the option to choose between corporate plans and individual plans. Corporate and Individual plans have advantages and disadvantages, and it is vital to understand their differences before making a decision.
Corporate Plan
Corporate health insurance is a type of health insurance an employer or company offers employees. It is a group health insurance policy that covers all company employees. The employer pays the premium for this policy, and coverage is extended to all employees and their dependents. Corporate plans are often more affordable than individual plans as the employer pays a significant portion of the premium.
The advantage of a corporate plan is that it provides widespread coverage to a large group of people. It is also usually more affordable than an individual plan due to the bulk rate at which the policy is purchased. Another advantage is that the premium is deducted from the employee's salary, so they do not have to worry about paying it separately.
However, there are some disadvantages to a corporate plan. One of the most significant disadvantages is that it is not customizable to the individual's needs. The employer or company determines the coverage, which may not be sufficient for some employees. Additionally, if an employee leaves the company, they lose their coverage.
Individual Plan
On the other hand, an individual plan is a health insurance policy that individuals can purchase for themselves or their families. The premium for this type of policy is paid by the individual rather than the employer. An individual plan allows for more customization in terms of coverage. It can be tailored to fit the needs of the individual or family.
The advantage of an individual plan is that it is customizable and can be tailored to fit the specific needs of the individual or family.
Additionally, if an individual leaves their job, they can still maintain their coverage. Another advantage is that the individual has more control over their coverage and can choose the deductible, co-pay, and other benefits. However, there are also disadvantages to an individual plan. The premium cost is often higher than a corporate plan, as the individual pays the entire premium. Additionally, the individual has to manage the policy, which can be time-consuming and confusing. In conclusion, both corporate plans and individual plans have their own set of advantages and disadvantages.
It is crucial to weigh the options and choose the plan that best fits your needs and budget. If you are still determining which plan is best for you, consult a health insurance professional to guide you through decision-making.
How To Choose the Best Insurance policy for you and your family?
Choosing the right company for health insurance can be daunting, but ensuring that you have the best coverage for your needs is crucial. Here are some factors to consider when selecting a health insurance company:
1. Reputation: Choose a company with a good reputation for providing quality health insurance coverage. You can check company reviews and ratings online or ask for recommendations from friends and family.
2. Network of Healthcare Providers: Check if the company has a vast network of healthcare providers, including hospitals and doctors. This is crucial to ensure you have access to quality healthcare when needed.
3. Coverage and Benefits: Look for a company that offers comprehensive coverage and benefits that meet your needs. Ensure you understand the coverage limits, deductibles, co-payments, and out-of-pocket expenses.
4. Customer Service: Excellent customer service is a plus. You want a company that is responsive to your needs and willing to assist you with any questions or concerns.
5. Cost: Compare the costs of different health insurance plans and choose one that fits your budget. However, don't compromise on coverage and benefits just to save money.
6. Additional Services: Consider if the company offers additional services such as wellness programs, health coaching, or telemedicine services that can enhance your overall health and well-being.
Considering these factors, you can choose a health insurance company that provides you and your family the best coverage and benefits.
Don't hesitate to contact your insurance provider with any questions or doubts about your coverage. They can help you understand your policy and answer any questions. It is always better to be well-informed and make an informed decision when choosing a health insurance policy that best suits your needs.