Things to look out for when buying health insurance policy

When it comes to buying health insurance policy, most people are often confused as to which policy to buy. They are clueless about what factors to consider when buying health insurance and end up buying a policy that is available at the lowest premium. But this is not the way to buy health insurance because if the policy does not offer protection against an ailment from which the policyholder is suffering, it defeats the very purpose of buying health insurance.

So, how does one buy a health insurance policy that is suitable and offers adequate protection against various kinds of ailments? There are four major factors to consider before deciding on which health insurance policy to buy. These are as follows:

Premium amount: The premium amount charged by the insurer for a specified sum assured is an important factor, but it must be noted that the cheapest policy may not be the best. So, it is necessary to take a hard look at the benefits, facilities and services offered by various policies and choose the policy that offers maximum benefits at minimum price.

Exclusions: Health insurance policies usually have set of exclusions that are not covered by the policy. One needs to look closely at the ailments and diseases not covered by the policy and decide whether or not to buy the policy.

Waiting period: All policies specify the waiting period for pre-existing medical conditions or diseases. The pre-existing diseases or ailments will be covered only after the expiry of the waiting period, so a policy with the shortest waiting period should be preferred.

Network of hospitals: The insurance company with the largest network of hospitals would be able to service the policyholders better than an insurance company having smaller network. Check whether some of the reputed hospitals in your area and city are within the insurer’s network and choose the one with the maximum number of network hospitals in your area and city.

Sub-limits: Health insurance policies specify sub-limits on various expenses such as room rent, surgery, etc. For example, if a health insurance policy of Rs 3 lakh specifies that the limit of room rent would be 1%, the policy would reimburse room rent up to a maximum of Rs 3,000 per day. Hence, any rent in excess of Rs 3,000 would have to be borne by the policyholder.

Co-payment clause: Some insurance policies may include co-payment clause whereby the insured has to pay a specified percentage of the expenses, while the rest is borne by the insurance company. So, the co-payment clause may stipulate that 20% or 30% of the expenses shall be borne by the insured. The higher the co-payment percentage, the lower will be the premium. So, it would be better to go for a policy that offers maximum benefit without any requirement of co-payment.