When applying for health insurance in India, a smart choice hinges on balancing adequate coverage with favorable policy terms and a reliable insurer. Key considerations include selecting an appropriate sum insured that accounts for future medical expenses and city-specific costs. Check out the inclusions and exclusions (including specific limits like room rent caps and co-payment clauses).
Given below are the handpicked top 10 recommended tips to opt for the best life insurance. To learn more about insurance caps, read on.
Use Adequate Sum Insured
• How much cover do you need? This is critical to further planning and to ensure you assess the risk of hereditary illnesses that might occur. Consider your city of residence (metro cities have higher medical costs), family size, age, potential future medical needs, and lifestyle diseases.
• A ₹5-10 lakh cover might be a good starting point for individuals in smaller cities, but in metros, ₹15-25 lakh or even more might be needed for a family floater.
• Future inflation: Medical costs are rising rapidly. Account for this in your sum insured.
Choose the Type of Coverage
• To simplify this, Individual vs. Family Floater: Choose based on your family structure. Family floaters are cost-effective for covering multiple members under one sum insured.
• Specific Plans: Consider plans for critical illness, cancer-specific, or senior citizen plans if applicable.
• Group Health Cover: If you have this through your employer, assess if it’s sufficient or if you need a personal top-up/super top-up policy.
Check on Inclusions and Exclusions
• Inclusions: What does the policy cover? (e.g., in-patient hospitalization, pre & post-hospitalization expenses, daycare procedures, ambulance charges, domiciliary hospitalization, organ donor expenses). Check for mental health, dental, and alternative medicine coverage if relevant.
• Exclusions: What is not covered? (e.g., specific diseases, cosmetic surgery, self-inflicted injuries, experimental treatments). Always read the fine print.
Be Aware of Waiting Periods
• Initial Waiting Period: Usually 15-30 days, during which no claims are admissible except for accidental emergencies.
• Specific Disease Waiting Period: For certain ailments like cataracts, hernia, etc., this can be 1-2 years.
• Pre-existing Disease (PED) Waiting Period: This is critical. For any illness you had before buying the policy, there’s a waiting period (typically 2-4 years) before it’s covered. Disclose all pre-existing conditions truthfully.
Know Sub-limits and Room Rent Capping
• Room Rent: Many policies cap the maximum room rent you can claim (e.g., 1% of sum insured for normal rooms, 2% for ICU). If you opt for a more expensive room, you’ll pay the difference plus a pro-rata deduction on other hospital bills.
• Disease-wise Sub-limits: Some policies have caps on specific treatments (e.g., cataract surgery). Understand these to avoid surprises.
Check Co-payment Clause
This specifies a percentage of the claim amount you’ll have to pay from your pocket. High co-payment reduces premiums but increases out-of-pocket expenses during a claim. For example, a 10% co-payment means you pay ₹10,000 on a ₹1 lakh bill.
Know Deductibles
An initial fixed amount that you pay before the insurer starts covering expenses. Often seen in super top-up plans, but some base policies also have it. Choosing a higher deductible lowers premiums.
No-Claim Bonus (NCB)
A reward for not making claims in a policy year, usually in the form of an increase in sum insured or a discount on renewal premium. Check how it works and if it accumulates or gets reversed.
Restoration/Reinstatement Benefit
This is a highly valuable feature. If you exhaust your sum insured in a policy year, this benefit restores the sum insured once (or sometimes more) for subsequent unrelated illnesses/injuries in the same year.
Claim Settlement Ratio (CSR) & Incurred Claim Ratio (ICR)
• CSR: The percentage of claims settled by an insurer out of the total claims received. A higher CSR (above 90-95%) indicates reliability.
• ICR: The total value of claims paid by an insurer vs. the total premiums collected. A healthy ICR (between 80-95%) suggests stable operations without being overly strict on claims or too lenient.
When you need hospital care, you just want it to be easy. So, make sure your insurer has cash-less tap on insurance accepted at the hospitals nearby – it means less worry about bills when you’re recovering. Life changes, and your insurance should too; that’s why portability is key, letting you switch insurers without losing benefits you’ve earned. For lasting peace of mind and to avoid yearly price surprises, consider a multi-year policy. But most importantly, you need an insurer you can truly trust. Always check their customer service and reviews to ensure they’ll be a helpful and understanding hand for you and your family when it matters most.
Also Read: Axis Bank Life Insurance for Coverage of ₹ 2 Crore
Conclusion
It’s vital to understand all waiting periods (initial, specific disease, and pre-existing conditions) and verify the insurer’s Claim Settlement Ratio (CSR) and Incurred Claim Ratio (ICR) for their reliability. Don’t forget to look for valuable benefits like No-Claim Bonus (NCB) and Restoration Benefit, the convenience of a broad network of cashless hospitals, and the flexibility of portability. Always disclose health information accurately to ensure a smooth claim process.
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FAQs
Q: What are “waiting periods” in a health insurance policy?
A: Waiting periods are specific durations during which certain claims are not covered. These include an initial waiting period after policy purchase, specific waiting periods for certain diseases, and a period for pre-existing conditions before they are covered.
Q: How can I assess an insurer’s reliability?
A: To verify an insurer’s reliability, you should check their Claim Settlement Ratio (CSR), which indicates how many claims they settle, and their Incurred Claim Ratio (ICR), which shows the value of claims paid versus premiums collected.
Q: What is a “No-Claim Bonus (NCB)” and a “Restoration Benefit”?
A: These are valuable policy benefits. A No-Claim Bonus (NCB) rewards you for not making claims, typically by increasing your sum insured or offering a premium discount. A Restoration Benefit restores your sum insured if it gets exhausted within a policy year.
Q: Why is having a broad network of cashless hospitals important?
A: A broad network of cashless hospitals offers significant convenience during hospitalization, allowing you to receive treatment without paying upfront and ensuring a smoother process.
Q: What does “portability” mean in health insurance?
A: Portability is the flexibility to switch your health insurance policy from one insurer to another without losing accumulated benefits, such as credit for completed waiting periods.