4 Thumb Rules of Purchasing a Medical Insurance Policy!

While there has been a significant increase in overall life expectancy, the number of diseases affecting people has also risen alarmingly.  With the booming cost of health care services and the increasing rate of medical inflation in the country, accessing the right medical treatment has become very difficult and it can burn a hole in your pocket. Hence, one of the best ways to make yourself financially secured against the uncertain health risk is to have a medical insurance plan. However, buying the right policy is what matters!

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    Further in this article, we have explained 4 thumb rules you should follow to make an informed decision while purchasing the medical insurance plan. However, before proceeding further, let’s under why you need health insurance policy.

    Why is Health Insurance Needed?

    Health insurance helps in mitigating the exorbitant medical expenses arising out of a health emergency.  The medical insurance policy offers coverage for day care expenses, in-patient hospitalization, pre & post hospitalization, OPD expenses, domiciliary hospitalisation etc. Also, pre-exiting illness, critical illness cover etc. are some of the unique features to be availed.

    Basic Rules of Buying a Medical Insurance Policy

    Let’s take a look at the simple tips to follow while purchasing the right medical insurance.

    Buy Medical Insurance that Suits Your Top Requirement

    These days, the insurance company offers an extensive range of health insurance policies to cater to the various requirement of insurance buyers. Nowadays, you can either choose an individual health insurance policy or go for a family health insurance plan as per your requirement or suitability. Moreover, if you want to provide financial security to your parents against unwanted medical expenses then you can also purchase health insurance for senior citizens.

    With plenty of plans available in the market, choosing the right plan can be a herculean task. Thus, the first thing you should do is to identify your main requirement. Do you need health insurance coverage for any pre-existing illnesses? Or for the availability of abroad treatment or you want coverage for childbirth and maternity. Once you identify your needs, you can decide the type of coverage you want.

    Find Cashless Hospitalization Network, Which Covers Best Hospitals in the City

    Cashless service means that you will not need to pay the medical bills yourself for your medical treatment. Under the cashless hospitalization facility, the medical bills are directly settled by the insurer with the hospital. Even though all the health insurance companies offer cashless hospitalization service, not all hospital in our country is a part of insurance companies’ cashless network. In Fact, in India, the insurance companies offer the facility of the cashless network only with 8,000- 4,000 hospitals out of 50,000 private hospitals.

    Thus, while purchasing the policy make sure that you check the list of the cashless hospital network of the insurer to find out whether the best hospitals in your city are covered in the list or not. To ensure good medical treatment, go for the hospitals that offer the top quality health care services.

    Analyse the  Plan’s Co-payment, Waiting Period, and Exclusions

    It is important to thoroughly read the prospectus of the health insurance policy to understand the co-payment, waiting period, and exclusion of the health insurance plan. The waiting period is the time-period the policyholder must serve before claiming the policy benefits.  This clause is only applicable in the case of pre-existing illness. As a basic rule, the lower the waiting period, better it is. Moreover, check the co-pay clause of the policy, which means that you will need to pay a share of the claim from your pocket. The co-payment clause is mostly seen in health insurance for senior citizens or in case of specific needs. Also, don't forget to check the exclusions of the policy. Make sure you check the healthcare expenses and medical conditions that are not covered by your medical insurance policy. Thus, it is crucial to read the fine prints of the policy before making an informed decision.

    Identify Benefits that Increase Your Sum Insured

    With an increasing rate of medical inflation, it is wise to choose a health insurance policy that enhances the coverage over time. There are two ways this can be done. First is the no-claim bonus (NCB) and second is restoration.

    No-Claim Bonus

    A no-claim bonus is a benefit offered to the policyholders in their health insurance policy. It is a way by which the insurer rewards the insurance holder for having a claim-free year. The no-claim bonus works in two ways:

    • Cumulative benefit where the coverage amount of the policy increases if the insured has a claim-free year and the premium of the policy remains the same.
    • Savings on Premium, where the premium amount of the policy decreases by a specific percentage for every claim-free year, however, the coverage amount of the policy remains the same.

    Different insurance companies have different rules for the no-claim bonus.

    Restoration for Additional Coverage

    Under this benefit, if you need to use the entire sum insured amount during the treatment/hospitalization and still need more, then the sum insured will be restored automatically without paying an additional premium.

    Therefore, make sure you read the policy documents in detail while purchasing the medical insurance policy.

    Wrapping it Up!

    If you follow these thumb rules while purchasing a medical insurance policy, then you will be able to find the most beneficial plan that fulfills all your criteria and ensures the financial security of you and your loved ones against any type of medical emergency.

    Written By: PolicyBazaar - Updated: 29 July 2021

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