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Health insurance is often a misunderstood financial product. Particularly in India, various misconceptions revolve around health insurance policies, stemming from general lack of understanding.
Here are the most common health insurance myths, busted:
In reality, the ideal time to purchase health insurance is when one is younger and healthiest. A policy purchased early in life and renewed regularly, leads to better claim experiences should the need arise.
Certain maladies remain undiscovered until symptoms become evident. As per health insurance regulations, these pre-existing diseases are covered only after a person holds a health insurance policy for at least 48 months.
Buying health insurance early is therefore a good idea, as the policyholder stays insured at any life stage. Health insurance also acts as a shield against accidents that come unannounced any time.
Every health insurance policy comes with a ‘waiting period', before which, claims against specific ailments are not entertained. In the first 30 days from commencement of the healthcare policy, no diseases are covered.
Only accidental hospitalisation gets coverage from the beginning. Pre-existing diseases are usually covered after four claim-free years, and for certain other diseases, there are one, two, three and four-year exclusions.
While purchasing health insurance, it is wrong to seek a plan with the lowest premium. Low-cost/basic plans have restricted offerings, with important features excluded. While basic health insurance policies include the obvious, updated policy versions come with numerous additional and crucial benefits.
It is important to check benefits and total policy coverage in a group health insurance policy, and assess if it adequate for your family’s needs. To stay protected at all times, it is best to buy additional health insurance in case one decides to change jobs or if the employer decides to restrict coverage or slash benefits.
Not renewing on time = loss of benefits
Even if the health insurance policy is not renewed on the due date, the policyholder can renew it within 15 days of the policy’s expiry date. In this way, the insured is treated as 'continuously covered' in terms of continuity benefits like pre-existing disease coverage and waiting periods.
Note: If a policy is renewed ‘X’ days after the due date, treatments undertaken during those ‘X’ days cannot be claimed even after policy renewal.
Insurers reimburse all costs
Not true, insurers sometimes only pay partially. The policy may have sub-limits, for instance, hospital room charges may be capped at 1% of the sum insured, and the excess must be borne by the policyholder.
Sometimes, a policy can have sub-limits on other expenses, specific medicine purchases may not be reimbursed if they come under non-admissible expenses. The insured may even need to bear various incidental expenses.
Another common health insurance myth is that a minimum 24-hour hospitaliation is mandatory to avail a claim. With growing medical advancements, certain surgeries/procedures that earlier required prolonged hospitalisation now need less than 24 hours.
Many health insurance plans have started providing coverage for procedures like chemotherapy, radiotherapy, lithotripsy, dialysis, eye surgery, etc. These procedures, termed as day care procedures, do not require 24 hours hospitalisation for availing claims.
Procedures like dental treatments do not fall under day care nor do they need 24-hour hospitalisation – these are out-patient procedures. Some insurance plans have started permitting claims on out-patient procedures too, subject to restrictions.
This myth in India has emerged because until a few years ago, most health insurance providers were unwilling to cover pregnancy, seeing it as a sure-shot claim. Now however, health insurers have started covering pregnancy and maternity expenses, subject to certain conditions. Some policies require a three-year waiting period before covering pregnancy-related claims, while some cover only the first pregnancy.
Another myth is that more exhaustive the list of covered day care procedures, the better is. However, more the exhaustive the list, higher is the chance of claim rejection because everything is mentioned in minutest detail. It is better to opt for a policy that states broad treatment categories and generic procedures rather than specific ones.
People fret about the waiting period (usually four years) applicable for pre-existing ailments. However, for those who are healthy while taking the policy, this clause does not apply. In case one has a pre-existing disease, most policies cover it after the four-year waiting period. It is crucial to disclose pre-existing ailment(s) while buying a policy to ensure a hassle-free claims settlement process.
In fact, purchasing health insurance policies online is a trend fast catching up, since premiums are usually lower for online policies. This is because no agents are involved, so insurers save on payable commissions and pass on the benefit to the customer. As long as one reads the policy document carefully, buying health insurance online is perfectly fine, maybe even better than buying through agents.
Changes in TPAs lead to scattered claims data. During a claim, the new TPA may not know how long the person was continuously covered - a vital data point for claim approvals, particularly treatments with waiting periods. To evaluate continuity of cover, TPAs may ask for policy copies of the past three to four years. For smooth claim settlement, it is important to retain policies of at least previous three years, plus the current.
People tend to believe that policy terms and conditions remain unchanged and that cashless is the ultimate insurance solution. When purchasing health insurance, it is important to do away with all these myths and buy a policy in sync with your healthcare needs, lifestyle, and financial capacity. Always read the policy document in detail.