Things you should know before taking Health Insurance in India

Before purchasing health insurance in India, there are several important factors to consider to ensure you make the best choice for your healthcare needs and budget.

1. Types of Health Insurance Plans

• Individual Health Insurance: Covers the medical expenses of a single person.
• Family Floater Health Insurance: Covers the entire family under one policy, usually offering a higher sum insured for a lower premium compared to individual policies.
• Critical Illness Insurance: Provides coverage for specific serious illnesses such as cancer, heart disease, kidney failure, etc.
• Top-Up and Super Top-Up Plans: Additional plans that increase your coverage over and above your existing policy, usually at a lower premium.
• Maternity and Newborn Insurance: Covers expenses related to childbirth and care of newborns, often with a waiting period.
• Personal Accident Insurance: Covers accidental injury and death, including disability-related expenses.
• Disease-specific Plans: Some plans focus on a specific condition, such as diabetes, cancer, or heart disease.

2. Sum Assured (Coverage Amount)

• The sum assured is the maximum amount an insurer will pay for your medical expenses. Choose a sum assured that’s adequate for your needs, considering the rising costs of medical care.
• For individuals, a minimum coverage of ₹5 lakh is recommended, but higher coverage might be necessary depending on factors like age, lifestyle, and family medical history.
• For family floater plans, the sum assured should be sufficient to cover all family members.

3. Pre-Existing Conditions

• Pre-existing conditions (such as diabetes, hypertension, etc.) are often excluded from coverage or subject to a waiting period (typically 2-4 years).
• Some insurers may provide coverage for pre-existing conditions after a waiting period, while others may not cover certain conditions.
• It’s important to declare any pre-existing health conditions when purchasing the policy to avoid claim rejection later.

4. Waiting Period

• Health insurance policies often come with a waiting period before certain benefits are available:
  • Initial Waiting Period: Usually 30 days for general illnesses, during which no claims can be made.
  • Pre-existing Disease Waiting Period: As mentioned earlier, pre-existing conditions may have a waiting period of 2 to 4 years.
  • Maternity Waiting Period: Maternity benefits may only be available after 2 to 4 years.
• Be aware of the waiting periods and make sure your needs align with these conditions.

5. Network Hospitals (Cashless Treatment)

• Ensure that the insurer has a large network of cashless hospitals where you can get treatment without paying upfront. The insurer directly settles the bill with the hospital.
• Always check if your preferred hospitals are included in the network.

6. Exclusions

• Understand what is not covered under your policy. Common exclusions include:
  • Cosmetic treatments
  • Pre-existing conditions (during the waiting period)
  • Injuries caused by self-harm or substance abuse
  • Experimental or unproven treatments
• Thoroughly review the policy to avoid surprises during a claim.

7. Premium and Deductibles

• Premium is the amount you pay for your insurance coverage. It depends on factors like age, medical history, sum assured, and policy type.
• Some policies offer a deductible (an amount you pay out of pocket before the insurer steps in) to lower the premium. Assess whether the trade-off makes sense for your financial situation.
• Premium Increases with Age: As you age, the premiums can increase, so it’s better to buy health insurance early to lock in lower premiums.

8. Claim Process and Settlement Ratio

• Claim Settlement Ratio (CSR) is an important factor. A higher CSR indicates that the insurer has a good record of settling claims.
• Understand the claims process: Check the documentation, procedures, and timelines involved in filing claims. Most insurers offer cashless claims but may require pre-authorization for non-emergency treatments.
• Be aware of any documentation required for the claim, such as medical reports and hospital bills.

9. No-Claim Bonus (NCB)

• If you do not make any claims during a policy year, you may be eligible for a No-Claim Bonus. This increases your sum assured in the next year without increasing the premium.
• This bonus can help you build a larger coverage over time.

10. Sub-Limits and Co-Pay Clause

• Sub-limits: Some policies have limits on specific treatments (e.g., surgery, room rent, maternity care). It’s essential to know if your policy has any sub-limits on different medical expenses.
• Co-pay Clause: This requires you to bear a fixed percentage of the total claim amount. For instance, a 20% co-pay means you pay 20% of the treatment cost, and the insurer covers the rest.

11. Renewability and Portability

• Ensure the policy offers lifetime renewability, which allows you to continue your coverage without having to worry about age restrictions as you grow older.
• Portability: If you’re unhappy with your current insurer, you can transfer your policy to another insurer without losing benefits like waiting periods or accumulated bonuses.

12. Tax Benefits

• Health insurance premiums are eligible for tax deductions under Section 80D of the Income Tax Act:
  • For self, spouse, and children: Up to ₹25,000 (₹50,000 if the policyholder is a senior citizen).
  • For parents: Up to ₹25,000 (₹50,000 for senior citizens).
• These tax benefits make health insurance a smart financial decision.

13. Riders and Add-ons

• Many health insurance policies offer riders (additional coverage) that can be added for extra benefits, like critical illness coverage, personal accident coverage, or room rent waivers.
• Adding these riders increases the premium but can provide more comprehensive coverage for specific needs.

14. Insurer’s Reputation and Customer Service

• Choose an insurer with a strong reputation for customer service, claim processing, and prompt support.
• You can check online reviews, ratings, and claim settlement ratios to ensure you’re dealing with a reliable insurer.

15. Regular Review of Your Policy

• Review your health insurance policy periodically to make sure it continues to meet your needs as your lifestyle, health, and family circumstances change.
• Ensure that your coverage is updated to reflect any new medical conditions or treatments you may require.

16. Emergency Care and Hospitalization

• Review the policy to see if it covers emergency care and ambulance charges.
• Many policies provide coverage for emergency ambulance services and hospitalization expenses, but you should confirm the limits and conditions.