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Health Insurance - Reading the Fine Print

What you do when you buy a new product, get to know its functions and features, right?

Health Insurance is no different. But the merit to a health plan is that it comes with a 15 days gracing period to let you go through the fine print. If within 15 days, you get to discover any clause in the plan that doesn't go with your needs, you can return the plan and get your money back.

But the grim reality is, just a look at the lengthy fine print and most of the people end up skipping it or caring not to give it a complete read. But there's a price to pay later, should you choose to ignore the fine print now. It is wiser to go through all the clauses in the fine print, one at a time.

(a). Start with the Main Course

The best way to start reading the fine print is to see what the plan covers. Apart from the regular coverage, you should look out if your health plan features the following benefits:

  • Cashless hospitalization
  • Pre and post hospitalization
  • Maternity benefit
  • Pre-existing coverage
  • Domiciliary hospitalization
  • Ambulance charges

(b). Move on to the Little Details

  • Once you are through with the meat of the plan, you can move on to finer details of the coverage. That would include looking out for value added benefits in the plan such as daily cash benefits, 24x7 medical consultation, free health check ups, medical concierge benefits, restore benefits, etcetera.
  • You should also get to know the maximum age up to which the policy can be renewed. Now a days, some insurance plans feature lifelong renewability.
  • Also look out for the network hospitals specified in the plan. If you discover that the nearest hospital is too far from your home, make sure the plan provides a non-network coverage, wherein instead of cashless hospitalization, the insured can get a treatment course in a non-network hospital and the expenses incurred are reimbursed later.

(c). Know Your Limits

  • Just knowing the sum insured is not enough, you should also be aware of the individual upper caps on specific expenses.
  • To get an idea, suppose the sum insured is 3 lakh, under which the upper cap on room expense is Rs 40,000. Suppose, you had to expend a total of Rs 2 lakh of which Rs 60,000 was spent on your room expense and the rest Rs 1,40,000 on doctor's fees, medications and treatment. The payout in such a case will be Rs 1,40,000 plus 40,000 i.e Rs 1,80,000. Thus the insured ends up bearing Rs 20,000 as an out of pocket expense.

(d). Look Out for Exclusions

  • Be well versed of the waiting period. More often than not, there's a waiting period of 4 years for pre-existing diseases, 2 years waiting period for specific illnesses and 1 month default waiting period.
  • Alternative treatment is treated as an exclusion in most of the health plans. Too good you decided to resort to nature to get healed, too bad your insurer doesn't cover you for alternative treatment.
  • Get to know the pre-existing conditions excluded from the policy. Mostly there is a 4 years waiting period, after which such conditions are included. But there are certain conditions mentioned in the fine print that won't be covered even after the waiting period.
  • The usual exclusions on a health insurance plan include expenses incurred on dental and vision care, influence of alcohol/drugs, cosmetic expenses, etcetera.

(e). Be Wary of Expenses and Charges Involved

  • Did you know that your insurer might require you to make a co-payment every time you file a claim. It's like sharing a fixed fraction of the medical costs incurred in the case of an eventuality.
  • When a claim is made, the insured has to incur an extra charge on the renewal premium, this is called as loading charge. Newer health plans are freeing the insured of having to incur the loading charge.

Most people believe than fine print is all about restrictions but it's not like that. Many a times, you might discover the little valuable benefits hidden in the fine print. So reading the fine print should not be seen as an obligation, instead as a good habit that lets you get the most of your health insurance plan.

At any point if you do not understand any clause in the fine print, you should get it clarified from your agent or directly from your insurer. Finally, we agree it's not easy meddling with the fine print. But seeing the merits, this one time pain is all worth it!