5 Factors to Consider Before You Buy a Medical Insurance Plan

When you buy a health insurance policy, the insurer covers the costs of medical treatment of all the people insured under the policy. Also known as mediclaim insurance, these policies either offer reimbursement of the medical bills or a cashless treatment facility at a network hospital. 

You can buy a policy for yourself or look for health insurance plans for your family to ensure that your loved ones receive the best medical treatment without having to worry about expenses. There are different types of medical insurance in India offered by numerous providers. So, how does one choose? Here are five factors that you must consider before you buy a medical insurance plan.

What is Health Insurance?

Health insurance is a financial product that offers reimbursement of the expenses incurred by the insured person(s) for medical treatments subject to certain terms and conditions. You can buy a health policy for yourself as an individual or for your family (including your spouse, children, and parents). In addition, the premium paid on health insurance policies offers a tax deduction under Section 80D of the Income Tax Act, 1961. 

There are numerous insurance providers offering different types of medical insurance plans. This makes finding the right one difficult. The first thing you need to do is think about the coverage you want. Also, think if you want to buy a health insurance policy for yourself or your entire family. Once you have these aspects clear, start looking at the insurance plans available to you and compare features. 

5 Factors to Consider Before Buying Medical Insurance 

Here are five crucial aspects that you must keep in mind that can help you find the right medical policy:

1. Network of hospitals

When you are faced with a medical emergency and rush the patient to the hospital, you are usually required to make a deposit with the hospital to begin treatment. Depending on the emergency, this can be a sizable amount. 

If you visit a hospital that is not tied up with your insurer, then you will have to pay the money first and claim reimbursement later. This can get difficult for expensive treatments. Hence, it is prudent to look for an insurer that has a wide network of cashless hospitals in and around the area you reside. 

2. Claim Settlement Ratio

The purpose of buying an insurance policy is to receive reimbursement when you file a claim. Hence, a good insurer will have a high ratio of claims settled to the ones received. Every insurer displays its claim settlement ratio on the website. Compare the ratios and look for an insurer with a higher ratio.

3. Capping and limits

Most people are unaware of the fact that mediclaim insurance policies usually limit the compensation amount under different heads of expenses. Allow us to explain:

A hospital bill includes a range of expenses like ambulance charges, room charges, consultation charges, tests, etc. Many health insurance providers limit the compensation under each of these sub-heads. 

For example, an insurer might cap the room rent compensation to one per cent of the sum assured. If the room rent goes beyond this capped limit, then you might have to bear the expenses from your pocket.

Hence, before buying a mediclaim insurance policy, make sure that you understand these caps and limits and look for a provider with low or no such limits.

4. Waiting Period

Almost all health insurance plans have a waiting period for pre-existing ailments and also some specific illnesses. During the waiting period, the insurer does not cover any medical expenses for the said illnesses. This period can go up to four years for certain ailments. So, when you are buying a mediclaim policy in India, try looking for one that has a low waiting period.

Further, many insurers allow policyholders to pay a higher premium to reduce the waiting period. If this is financially viable to you, then pay the additional premium and get rid of the waiting period.

5. Premium amount

Mediclaim insurance policies have annual premiums. The amount of premium is calculated based on the risks perceived by the insurer. Once you have shortlisted plans based on your needs and the points mentioned above, compare premiums and try to find the most cost-efficient one. Remember, the cheapest option might not always be the best option. Don’t compromise on coverage but don’t overpay the premium. Choose judiciously.

Summing Up

Most insurers offer an online platform to help you look at options and choose the right mediclaim insurance policy for your needs. They also offer a range of add-on covers to help you customise the policy. However, these add-ons increase the premium amount. Remember, while the health insurance premium might seem like a cost today, the coverage it offers can save you a lot of money during a medical emergency in the future. Hence, assess the health requirements of your family and choose the right policy to offer them the best medical care without worrying about the expenses. Good Luck!