Health insurance: Here’s how to choose the right plan

Updated: November 20, 2019 12:40:33 AM

Most coverage benefits under a health plan have sub-limits which limit the extent of coverage allowed under the benefit. Room rent limit is one such common sub-limit found in many health insurance plans. The limit is usually either expressed as an absolute amount or as a percentage of the total sum insured.

Health insurance, money news,  health insurance plan, NCB, health insurance policy, health insurance tpaFor instance, if the allowed room rent limit in your health plan is Rs 5,000, your plan would cover your room rent expenses up to Rs 5,000.

By Amit Chhabra

The cost of healthcare has increased significantly, thanks to the growing demand for medical services. That, along with increased awareness about medicine and preventive measures against illness, has rendered medical insurance more essential.

Having health insurance comes handy in times of medical emergencies. By assessing his or her financial position and requirement closely, one can plan and financially prepare against medical emergencies through a medical insurance plan.

Whether you are married, single, have children, young, or old, you need some level of health insurance to protect yourself against financial disaster in the event of a serious illness or accident. Whether you choose a group plan or an individual plan, there are important choices to be made that will affect not only the quality of your medical care coverage but also your wallet. Let us go through some of these choices so that you can make an informed decision that fits your specific needs and your budget.

Room rent capping
Most coverage benefits under a health plan have sub-limits which limit the extent of coverage allowed under the benefit. Room rent limit is one such common sub-limit found in many health insurance plans. The limit is usually either expressed as an absolute amount or as a percentage of the total sum insured. For instance, if the allowed room rent limit in your health plan is Rs 5,000, your plan would cover your room rent expenses up to Rs 5,000. However, if the limit is expressed as 2% of the sum insured and the chosen sum insured is Rs 5 lakh, your room rent limit is Rs 10,000. While choosing a health insurance cover, it is important to select a plan that comes without any sub-limits to enjoy comprehensive coverage.

No claim bonus
Another important feature is no claim bonus (NCB). Under this feature, the insurer offers additional coverage for not making any claims during a policy year. Most insurers provide an additional 5% increase in sum assured amount for NCB. The bonus can also be availed while renewing your health insurance policy as most insurance providers in India offer NCB to the insured during the policy tenure. You may also choose to increase sum assured, in the form of a cumulative bonus, to replace the NCB. As the number of claim-free years increases, the percentage of NCB also increases. While buying a health cover, do make sure you choose a policy that has the feature of NCB.

Free health check-up
Over the last few years, the structure and features of health insurance plans in India have become more customer centric. Moreover, more people have started following a healthy lifestyle backed with efficient and effective wellness programmes. Thankfully, to cater to the needs of fitness conscious customers, some insurers have come up with new-age health insurance plans that are increasing fitness levels amongst the masses. It is important for you to choose a plan that comes with new-age features like free health check-up and discount on the premium upon achieving certain pre-defined fitness goals.

Choose the right sum insured
When you buy health insurance, remember to buy for the future. If a heart surgery cost Rs 5 lakh today, it may cost Rs 20 lakh 20 years later. The lowest cover you must have is Rs 7 lakh-Rs 10 lakh, going all the way to Rs 25 lakh–Rs 30 lakh. Look for policies that increase your insurance cover every claim-free year. Also, consider a top-up cover with a deductible to enhance your existing insurance. Such covers are cheaper than basic plans since they kick in only after a threshold has been crossed.

Other factors to consider
Before finalising a policy, one should take cognisance of factors such as current health status, life-stage, city of residence, medical history, nature of the job, and the extent of coverage an individual can afford. One should be mindful that premium comparison is not the right evaluation parameter while choosing an insurance policy. It is also important to choose the right insurer. It is prudent to take into account the claim settlement ratio. Cashless and reimbursement turnaround times are a reasonable indicator of how fast the processing of claims is managed by an insurer.

The writer is business head, Health Insurance, Policybazaar.com

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