A major illness in the family can throw the entire household budget out of gear. Even then, buying medical insurance is seen by many as a tax-saving device than a necessity.
Less than one in five Indians possess health insurance. If you don’t have health insurance, it’s time to get one. To help you find the right plan, here are six mistakes to avoid:
1.Starting late in life
Being young is no excuse to not have health insurance because illness can strike anyone, anytime. Starting early has advantages too.
You are less likely to have pre-existing diseases, making it easier to get cheaper cover and accrue no-claim bonuses.
Waiting for too long may mean insurance cover being denied or a waiting period for pre-existing illnesses, usually four years.
2.Depending on employer provided insurance alone
This perk is always welcome, but may provide insufficient coverage or be tailored to your unique requirement.
Plus, you are left unprotected when you are in between jobs.Make sure to buy your own policy to supplement your employer’s cover- a family floater policy is a good option that covers all family members with one plan.
Tip: prioritise the employer’s policy for claims, thereby allowing you to accrue a no-claim bonus on your own policy.
3.Using cheaper premium as the main yardstick
A low premium policy might have several exclusions that would make the support offered insufficient.
When you buy a policy, make sure that specific diseases or conditions you or your family members are prone to contract based on family history, are covered.
To this end, you may need a critical illness rider with youror a standalone Critical Illness Plan.
In case of a life threatening disease or condition, this will cover non-hospitalisation expenses that a normal indemnity policy such as health insurance does not cover.
4.Not reading the fine print
It is critical to read the fine print carefully so that you’re not in for disappointments. Check which hospitals in your neighbourhood are on the list of cashless hospitalization facilities as per your insurer.
Insurance companies could limit the hospital room cost/rent covered by them to 1 per cent of the sum insured. So, if the sum assured is Rs. 2 lakhs, they will pay only Rs. 2,000 per day towards room charges.
You will end up paying the rest. Thus, look out for clauses like the co-payment clause, where you have to share the cost with the insurer.
5.Not reviewing the policy
At least once in five years, review your cover and compare it to existing expense levels for various treatments.
If required, buy additional cover. If your premiums increase or any new clauses are introduced at the time of renewal, ask why that has happened. Keep track of new products.
For instance, a top-up cover is a relatively new product. If you find your policy restrictive, you could switch providers after comparing features and costs.
With a little due diligence, health insurance can be a life saver in dire circumstances. All you need to do is ensure you’ve chosen your plan carefully.