6 Health Insurance Prerequisites

How to Buy the Best Health Insurance Policy?

A survey of 1400 people in the age group of 25-35 by ICICI Lombard in 2015 revealed that 75% of them had a health insurance plan. Interestingly, an astonishing 46% of those buyers cited tax deduction on premium as the prominent reason to buy health insurance.

While one of the benefits of health insurance is tax exemption, the apparent lack of awareness for the major benefits is reflected in the low insurance penetration in the country. Which means, a majority of Indians are burdened with the out of pocket medical expenses.

Health insurance is a crucial financial tool to avoid unexpected financial crises. However, you must know the following basics before you consider buying a policy:

• Sum Insured and Policy Period: The sum insured in a health insurance policy may be on an individual basis, or on a floater basis. The policy is usually available in one, two or three year options. Always opt for a policy that offers a higher sum insured with higher discounts for multi-year option and tax benefits.
  
  

• In Patient Treatment: Several policies offer medical expenses for hospitalisation for a minimum period of 24 consecutive hours. However, most of them do not cover the expenses for AYUSH treatment regardless of the treatment carried out in a government or recognised institute.
  
  
• Pre-existing Diseases: Almost every insurer has a waiting period of 3-5 years for a pre-existing disease. Usually top-ups or add-ons reduce the waiting period based on the number of years spent in the base policy.
  
  
• Cashless Hospitalisation: Insurance companies have tie-ups with leading hospitals in all major cities across the country. They arrange for direct payment with these network hospitals through third party associations to help you avoid out of pocket expenses. It is always better to go with an insurer with a broader network of hospitals, with one close to your residence.
  
  
• Wellness Program: Several insurers provide wellness benefits, either directly through their basic cover or through a top-up. These wellness benefits cover wellness activities such as membership to gym, yoga classes, sporting events, health risk assessments and much more. For every wellness point earned, you can claim redemption against the medical expenses not covered in your policy as per terms and conditions.
  
  
• Top Ups: While most health insurance policies provide only the basic coverage, a suitable add-on or top-up extends your coverage towards illnesses not covered in your basic plan.
  
  

New age super top-ups such as the Health Booster, for instance, features fixed deductibles, reset benefits, critical illness cover, personal accident cover and many more, over and above your base policy. Super top ups are helpful in case of floater policies as well, where one family member is more prone to illnesses and there is a risk of multiple hospitalisations.