Looking to buy health insurance online? Read this before you pay your premium

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Updated: January 19, 2019 11:16:23 AM

Tax saving is incidental while the benefit of owning a health insurance policy is huge as it helps in meeting medical expenses during hospitalisation and thus protects one's investments.

 health insurance plan, online health insurance plan, tax saving, Section 80C, claim ratioMost financial planners suggest to buy a health cover for self and family members even before one starts to save.

For the FY 2018-19, the tax saving season will end on March 31, 2019, which incidentally is falling on a Sunday. Many taxpayers who have exhausted their Section 80C limit of Rs 1.5 lakh are still looking for ways to reduce their tax liability. Buying health insurance helps one cut taxes. However, even if one has not exhausted the Section 80C limit, one should consider buying a health insurance plan.

The tax saving is incidental while the benefit of owning a health insurance policy is huge as it helps in meeting medical expenses during hospitalisation and thus protects one’s investments.

Most financial planners suggest to buy a health cover for self and family members even before one starts to save. Premium paid towards the health insurance policy, which could be an individual plan, a family floater or even a critical illness plan, qualifies for section 80D tax benefit, which is over and above Section 80C benefits.

With most of us already familiar with online shopping experience, buying of health insurance online is also catching up. “The number of people buying online health insurance policies has been increasing as it is an easy and hassle free process, says Subrata Mondal, Executive Vice President (Underwriting) at IFFCO Tokio General Insurance.

But, is there a price difference if one goes online compared to policies bought offline? “The premium rates might differ for both the channels as both customers are different. When one comes directly to the company then acquisition cost is lower and therefore premium rates  might be different,” says Mondal.

Similar to buying a health plan offline, one should disclose all pertinent information about one’s health to the insurance company. Importantly, disclosing of all pre-existing ailments at the time of applying should be disclosed to the insurer. Further, ensure that there is no variation in the information provided at any time, while applying and at the time of hospitalisation, as it may lead to a delay at the time of claims settlement. A copy of the form is sent to the buyer. “A system generated proposal form is sent to the policyholder on the basis of information which was shared at the time of buying a policy,” informs Mondal .

Age is an important factor while buying health cover online. Also, the medical underwriters may ask the proposer to undergo medical tests before issuing the policy. But, how will that work in case of online purchase? “Medical tests are not required, as only people who are less than 55 years of age with no adverse medical are eligible for buying a health insurance plan online,” says Mondal.

Merely paying the premium online will not be a sufficient proof for tax benefit. Online purchasers need to ensure that the policy document is generated that will work as a proof for tax purposes.

While buying a plan online one should carefully go through the policy terms and benefits before taking a final decision. Mondal suggests, “One should read the policy document carefully to understand what are the exclusions. For example, if one has a family history of chronic issues then should confirm the coverage before buying one. Similarly, it is important to look at the claim service of the company. The high claim ratio implies that the majority of the claims get settled by the company.”

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