Know all About the Health Insurance Offers Online in India

If you are the type who is happy with the first health insurance plans that your health insurance agent suggests, or a plan with the lowest premium, you must definitely read this blog. You have a lot to learn about the art of accepting and rejecting health insurance plans with confidence. 

When it comes to different types of health insurance, awareness and knowledge help in making informed decisions. Rather than blindly going with what an insurance agent recommends, put your knowledge to use. Understand these factors:

Insurance plans with lower premium

Health insurance experts are of the opinion that most Indians are substantially underinsured. In India, average cost per hospitalization is around Rs 50,000. For a 40 or 50-year old, a sum insured of Rs 3 or 5 lakhs won’t suffice beyond regular hospitalization for a few days. Many people end up buying a health insurance plan of up to Rs 5 lakhs because it entails a lower premium payout.

Be wary of insurance plans with a lower premium. A survey revealed that 57% of people, who bought health insurance plans based on the low-premium factor, were not happy with the policy because it didn’t meet their expectations. The focus must be to get the maximum cover possible without overpaying for the health cover.

With increasing competition in the health insurance market, it is possible that insurers would offer basic products at cheaper costs. But do these insurance products meet your requirements? It is a question you must ask before buying any insurance policy. 

Here’s a checklist of items to consider before buying a policy with low premium:

Coverage offered

Does it provide comprehensive coverage for many diseases, pre and post hospitalization, day care procedures, OPD, maternity add-on, ambulance, room rent, etc? If a plan does not look promising enough to cover this healthcare need, reject it right away! Look for other options that offer wider and deeper coverage.

Health insurance plans with long waiting periods

What good is a health insurance policy with low premiums and a long waiting period? A waiting period of 4 years would mean that you would have to pay premiums and keep renewing your policy for 4 years before you can utilize its benefits and make claims. If an insurance policy has a lower premium but a longer waiting period, it is better to rethink and at times, reject it. Any waiting period beyond a few months is not acceptable and it defeats the very purpose of taking health insurance.

There are different types of waiting periods:

General waiting period:

Most insurance plans specify an initial waiting period that starts from the day the policy comes into force. Usually this waiting period is for a few weeks to a few months – 30 days to 90 days.

Pre-existing disease waiting period: At the time of the purchase of health insurance plans, policyholders are supposed to declare all their pre-existing illnesses and health issues. Usually, insurers have a waiting period to make claims towards expenses of pre-existing diseases. The waiting period can vary from a few months to a few years. This is what you must aim to minimize to less than 6 months. 

E.g. Max Bupa CritiCare Health Insurance has a waiting period of 2 years and United India Health Insurance UNI Criticare Policy has a waiting period of 90 days.

Maternity waiting period: Most of the maternity health insurance plans have a waiting period of 2 years to 4 years. That’s a pretty long waiting period, but insurers do so because maternity is a sure claim that they would have to pay. Hence, you will have to pay premiums for at least 2 to 4 years before making a claim. In such cases, you might want to think of another option to cover your maternity expenses. 

A longer waiting period for a smaller sum insured doesn’t make sense for a policyholder. However, if the sum insured is high, a waiting period is worth the while. 

Insurance plans with sub limits

One of the most common reasons for policyholders not being happy with their health insurance buying decisions is poor claim settlement experience with the insurance company. One of the common issues that arise at the time of claim settlement is the clause of sub-limits, which, most often, policyholders overlook when buying a policy.

What are sub-limits in health insurance plans? 

Sub-limits are the limits, which the insurer puts on the coverage of certain expenses. An insurer may put a cap on expenses such as room rent, doctor’s fee, ICU charges, surgery charges, etc. During the time of claim settlement, the insurer will only pay towards these expenses up to the sub limit. Any expense beyond the limit would have to be borne by the insurance policyholder. Typically, insurance companies have sub limits in the range of 1% to 2% of sum insured. Ideally, look for policies without such stringent sub-limits.

E.g. Mr Verma bought a health insurance plan for Rs 5 lakh. Within a year, he had to be hospitalized for an appendicitis operation. He chose the best hospital in town thinking that his insurance policy would cover the expense of the room fully. He wasn’t aware that his plan had a sub-limit on the room rent, which is 1% of the sum insured. 

At the end of his hospitalization his room rent expenditure was Rs 10000. According to his policy sub-limit clause, the insurer settled only Rs 5000 towards the room rent expense. Mr Verma had to pay Rs 5000 from his own pocket.

Always be aware of the sub-limit rules when buying a health insurance policy. Preference should be given to plans that do not have any sub-limits, even if they come at a higher premium. This reinforces point number one – not all health insurance plans, which have a lower premium, are good purchases. It is time to read the fine print carefully.

Claim settlement ratio – a key parameter

Comparing different health insurance plans and companies is a key part of the process of buying a good health plan. The claim settlement ratio of companies often comes into consideration when comparing policies. 

Let’s understand how to read the claim settlement ratio with an example.

Company A has a claim settlement ratio of 90%, which means it settled 90 claims out of every 100 claims made. Company B has a claim settlement ratio of 70%, which means it settled 70 claims out of every 100 claims made. 

Now if you’re of the opinion that Company A is definitely better because it has a higher claim settlement ratio, hold on. Here’s what experts say: Insurers may reject claims made because of fraudulent cases, or it is possible that an insurer paid small claims and rejected big claims and hence demonstrates a good claim settlement ratio. 

Experts suggest that claim settlement ratios of different insurance companies should be seen along with the rejection and outstanding ratios, and the reasons behind it. So the next time your insurance agent recommends one plan over the other simply based on the companies’ claim settlement ratios, ask more questions, find out more details and reports about the company’s settlement history and then make a call whether it should be accepted or rejected.

Over to you

A little alertness and proactive approach can make a great deal of difference to your health insurance purchases. Now you know how to outsmart your insurance agent with the right kind of information; when to reject a health insurance offer and when you accept it with confidence.