With increasing health costs, the most effective way to secure your and your family is to buy a personal health insurance policy. While most salaried individuals may have a group insurance cover, it is always advisable to buy a personal cover which can be renewed every year. Also, under Section 80D of Income Tax Act, 1961, a taxpayer gets deduction of up to Rs 25,000 for heath insurance of self, spouse and dependent children.
At present, all health insurance policies provide for entry age of up to 65 years and do not have any exit age once the proposal is accepted, provided the policy is continuously renewed without any breaks. A policy can be either individual or floater, and one can increase the sum insured at the time of renewal.
Moreover, at some point of time if a single health cover plan is not enough to deal with the needs of an entire family as many insurers put a cap on the sum insured, one should look at a top-up plan as it gives additional cover over and above the normal coverage, and is helpful if the normal cover is exhausted.
Buying a health cover can be tricky as there are multiple products in the market. Therefore, one must look at the product information on the company’s website, which will include a description of the product, clauses, exclusions, network hospitals and premiums. Here are five things that one should look at before buying a health insurance policy.
Pre-insurance health check-up
Insurance companies insist on a health check-up if the applicant is above 45 years of age, or if the sum insured is of higher amount. The tests are conducted in hospital empaneled with the insurer and as per the regulator’s rule, the insurer will bear at least half the cost of the medical check-up.
Treatment-wise limit for claim
One must look at the treatment-wise limit for amounts one can claim under a health insurance policy. If the claim amount exceeds the amount set by the insurer, one has to pay the balance despite having a higher overall sum insured. Many insurers provide daily cash benefit for each day of hospitalisation.
One must also note the terms and conditions of pre- and post-hospitalisation offerings, no-claim bonus and waiting period for specified ailments, which vary from company to company.
Cumulative bonus and premium
While buying a health insurance policy, one must ensure that the cumulative bonus is stated explicitly in the prospectus and even in the policy document. Also, look at the product information on the company’s website, which will include a description of the product, clauses and premium rates inclusive and exclusive of the service tax payable. If the policyholder has made a claim in the policy year, the insurer cannot load any charges on an individual insurance policy at the time of renewal.
At the time of signing the insurance proposal, one has to disclose any pre-existing ailments and based on that the insurer decides whether to provide you insurance and the premium for it. Never hide or provide incomplete information in this disclosure as it may result in rejection of claims later. Many insurance companies do not give a cover if an individual has or even in the past had a pre-existing illness with major consequences. If they still do, the insurer will load the premium to cover additional costs that may arise due to one’s existing medical condition.
Waiting period and exclusions
Every insurer will have a waiting period for pre-existing diseases, which ranges from two to four years. Check the waiting period before you sign on the dotted line because if you have a pre-existing medical condition you cannot depend on health insurance policy in case there is any medical emergency due to the existing illness. It is always better to buy a health insurance policy at a young age when the chances of falling ill and pre-existing ailments are minimal. In individual health policies you can port your policy from one insurer to other, along with your waiting period already covered.