Buying health insurance? Here are 4 tips you must know about

Updated: April 3, 2017 6:10 PM

Buying a health insurance can be a difficult task. Here are four factors that you must consider before finalising the cover.

health insurance, Network hospital coverage, insurance policy, claims settlement ratio, maternity cover, No claim bonus, NCB, incentive Buying a health insurance can be a difficult task. Here are four factors that you must consider before finalising the cover.

Upendra Namburi

Buying a health insurance can be a difficult task. Here are four factors that you must consider before finalising the cover.

Network hospital coverage
While selecting an insurance policy, check how many hospitals are included under the insurer’s hospital network. Make sure that the hospital you are most likely to visit is covered in this list.

Claim settlement ratio
Look at the claims settlement ratio (CSR)—the percentage of the total claims the insurer settles. Look for an insurer that has a high CSR as such insurers settle a high percentage of claims and pay out a good amount.

Waiting period
Insurance policies don’t become active the instant you buy them. They specify a time frame after buying the policy during which you cannot claim any insurance benefits, known as the waiting period. They are of three types: initial waiting period, pre-existing ailment waiting period and disease-specific waiting period.

Pre-existing waiting period exempts the insurance company from settling a claim for an ailment you had before buying the policy. The length of this waiting period depends on the pre-existing disease one is suffering from and can be anywhere from a month to a few years depending on the product that you might be evaluating. The disease-specific waiting period is for two years but the period might depend on your age, depending on the plan you are evaluating. It applies to a list of diseases that you will receive with the policy.

Waiting period is important is maternity cover. In such cases, the waiting period is two to five years, but some covers offer a waiting period of just nine months.

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No claim bonus
Most insurers give an incentive if you don’t make a claim (sometimes even allow you to make a small one) during your policy term. This incentive is called no claim bonus and is offered when one renews the policy. While selecting a health insurance policy, look at the maximum no claim bonus period and the no claim bonus rate. Your cumulative bonus will be higher if these two are high. Accumulated NCBs may get reduced when you claim, however, some plans offer guaranteed NCB benefit that has accrued for claim free years.

The writer is chief innovation and marketing officer, Bharti AXA General Insurance.

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