Looking to buy a health cover? Check these factors before selecting

5 MinsApr 9, 2021

With the number of health insurance policies available today, choosing the right one can be a challenge. That's how Arvind Iyer, 28, felt when he was trying to buy a health insurance policy. He had to consider multiple factors before purchasing the right one. He spoke to a financial planner who guided him on the aspects he needed to look for before buying a policy:

health insurance cover

1.  Medical inflation rates: A medical procedure that costs Rs 3 lakh today can cost Rs 7 lakh within a decade, due to the rising cost of medical technology. A policy that offers a cover of Rs 5 lakh might seem sufficient now, given that Arvind is young and healthy. But it makes sense to spend a little more on the premium and take a higher cover, say, Rs 10 lakh – Rs 15 lakh. The higher cover will come in handy in future when Arvind is older. Also, opting for a higher sum assured today will help in keeping the premium under manageable limits. If Arvind were to buy a higher cover when he is older, he would have to shell out much more for the premium. Hence, it makes sense to opt for as high a cover as he can afford, right now.

2.  Policy limits: Some insurance policies have limits on the expenses for hospitalization. For instance, some policies have limits of Rs 3,000 to Rs 5,000 per night for room rent. If Arvind wants a room that costs more, he will have to pay the balance out of his pocket. What’s more, typically, additional expenses such as charges for operation theatre and diagnostic tests, doctors’ fees, etc, are linked to the room rent. If the room rent exceeds the policy limit, Arvind will have to pay those charges too out of his pocket. Hence, it is better to buy a policy that does not have room rent limits.

3.  Critical care coverage: Unfortunately, acute diseases are increasingly common among young people. More and more people below 40 are being affected by ailments like kidney failure, heart attacks, cancer, bypass surgeries, to name a few. Arvind should look at health insurance policies that offer critical care coverage or opt for a top-up.

4.  Waiting period clause: A waiting period in an insurance policy means that the insurer will not pay claims for existing illnesses or specific illnesses until a particular amount of time has passed. For example, diabetes is a disease that often has a waiting period. If Arvind contracts diabetes within a year of buying the policy, and the waiting period in his health insurance is 48 months, getting a claim passed for an ailment before the waiting period ends, may prove to be difficult. Generally, waiting periods range from 24-48 months. Arvind should check the waiting period of the policy before selecting one.

[Also Read: Six ways to save money on your health insurance premium]

5.  Pre-and-post hospitalization coverage: Serious illnesses are rarely resolved when one is discharged from the hospital. Many policies today offer coverage for procedures or treatments before and after the hospitalization period. Arvind should make sure that he buys a policy covering both pre-and post-hospitalization costs like ambulance expenses, medical tests, doctors’ fees etc.

6.  Additional Sum Insured: If you make no claims during a year, most health insurance policies offer a No-claim Bonus. The amount varies from insurer to insurer. For instance: If Arvind’s cover is for Rs 10 lakh and doesn’t make a claim in the year, his sum insured could go up by 10% to Rs 11 lakh. Hence, he should preferably choose a policy that offers the highest No-claim Bonus.

7.  Lifetime renewability: This is one of the most important factors when it comes to health insurance. Some health insurers only insure people up to the age of 50 or 60 years. However, ideally, Arvind should choose a company that will let him renew his insurance policy for life. As he gets older, his chances of getting ill are higher, for which he will need coverage. And it would be easier for him to renew his existing policy than buying a new one.

8.  Other factors: These include a cashless network of hospitals, family insurance benefits (if he is buying health insurance for his family), and maternity benefits (in case he is buying health insurance for his wife).

Once Arvind has taken all these factors into account and looked at his options, he can make an informed choice best suited for him.

Axis Bank has tie-ups with multiple health insurance companies, including Aditya Birla, Digit and Tata AIG that provide a range of well-crafted coverage options. Visit our Insurance section to check the other insurance plans provided by Axis bank. Also, use our online life insurance calculator to estimate the life insurance cover you may need.

Disclaimer: The Source, a Mumbai-based content creation and curation firm has authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.