A Comprehensive Health Insurance Checklist to Purchase Best Health Insurance Plan in India
Amit Chhabra
Chief Business Officer at Policybazaar.com | On a mission to simplify health insurance, and assist with claims
Buying your health insurance policy can be overwhelming. But at the same time, this is one of the most important decisions of your life. To assist your buying journey, we have created a checklist to go through before buying your policy.
1. Coverage Amount (Sum Insured)
The sum insured is the maximum amount you can claim under your policy and should be in sync with your anticipated healthcare needs. If you live in a tier 1 city, you should buy a minimum of 10 lacs, and in small cities, a minimum of 5 lacs is the bare minimum.
PB recommendation – The cost of the 1 Crore sum insured is 10-15% higher than the cost of the 10 Lacs plan. Buying the 1 Crore plan is always the right choice if you are not extremely price-sensitive. It will give you extreme peace of mind for the years to come.
2. Waiting Period for Pre-Existing Conditions
While the first two are standard across all policies, you can optimize to reduce the pre-existing disease wait period. Many policies also offer the option to buy out the waiting period, and coverage for existing illnesses can start as early as day 1.
PB recommendation – If you anticipate a claim for a pre-existing disease might happen soon, buy a policy allowing Day 1 coverage. It typically costs 10-15% extra premium but gives you 100% additional peace of mind.
3. Room Rent type
It refers to the maximum amount the insurer will pay for your hospital room rent. In old plans, the room rent limit was usually capped at around 1-2% of the sum insured. The problem is that it also meant the customer had to pay a large part of nursing, ICU, Surgery charges, doctor's fees, etc.
However, thankfully, most modern health insurance plans now have no room rent limit and no capping on related expenses such as doctor consultations, nursing and ICU charges, etc.
PB recommendation – You must at least look for plans that provide a Single AC room, and it is even better to have a plan with no room rent capping
4. Deductibles/Co-Pay
Deductibles and co-payments represent additional costs that policyholders will need to bear during medical emergencies. Consider these only when you want to reduce the premium; but at the same time its very important to be aware of the terms. Example: Let's say you have a health insurance plan with a ₹25,000 deductible. If you have a hospital bill of ₹2,00,000, you'll pay the first ₹25,000 as a deductible, while the insurance company covers the rest.
PB recommendation: Ideally avoid co-pay and deductible. If you have to Opt to reduce premium, take a deductible instead of co-pay because of fixes your liability to a certain amount, rather than as a % of claim
5. Exclusions
Familiarize yourself with the list of exclusions in your health insurance policy to avoid any unpleasant surprises during claim settlement. Exclusions refer to specific conditions or treatments not covered under the policy.
PB recommendation: Wherever you buy from, ensure the seller informs these exclusions. If exclusions are not informed, it can lead to massive issues at the time of claims
6. Disease Sub-limits:
Some plans impose sub-limits on specific diseases or treatments, capping the maximum amount the insurer will pay for those expenses. For example, a policy might have a sub-limit of ₹ 30,000 for cataract surgery. Similarly, many plans impose a limit of 10% of sum insured on modern treatments.
For example, in this case for a policy of 20 lacs sum insured, a robotic surgery will be covered only upto 2 lacs.
PB recommendation: Opt for plans with no sub-limits and opt for an advisor who is transparent and explains all the sub-limits
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6. Pre-Post Hospitalization Care
Most plans cover not only the hospitalization expenses but also the medical expenses incurred before and after hospitalization, such as diagnostic tests, consultations, and medications.
Example: If you're hospitalised for surgery, your health insurance plan may cover the cost of pre-hospitalization diagnostic tests, surgeon consultations, and post-hospitalization medications prescribed during your recovery period.
PB recommendation: Opt for plans with atleast 60 days of pre and 180 days of post hospitalization expenses. This is fairly standard across plans now
7. Day Care Treatment:
Daycare treatments are medical procedures or surgeries that can be completed within a single day without needing an overnight hospital stay. All health insurance plans cover these treatments.
PB recommendation: Opt for a plan which covers all day care treatments, rather than a specific list of treatments only. It ensures peace of mind in the long run as new treatments keep coming up and policy TnCs may not get updated otherwise
8. Restoration Benefits:
Restoration benefit is when the insurance company restores the insured's original sum after it gets exhausted to treat the illnesses. This allows you to have coverage available for additional medical expenses.
Example: Suppose you have a health insurance plan with a sum insured of ₹5,00,000 and restoration benefits. If you claim ₹5,00,000 during the policy year and exhaust your coverage, the restoration benefit will provide an additional ₹5,00,000 coverage for any subsequent medical expenses within the same policy year.
PB recommendation: Take a plan that allows restoration for the same person and disease, unlimited number of times. It’s a rare event; but when it gets used, it’s a life saver. We have paid claims worth crores in Cancer related claims, when the sum insured is only 20 lacs.
9. Blacklisted Hospitals
All Insurers exclude coverage for treatment received at specific hospitals deemed substandard or have a history of fraudulent practices.
PB recommendation: Know the blacklist before buying the policy, and if your advisor isn’t informing about this, please question your advisor
10. Claim Support from Intermediary
Intermediaries, such as insurance agents or brokers, can provide valuable support during the claims process, assisting policyholders in filing claims, understanding policy terms, and resolving claim-related issues.
How big are the intermediaries? Don’t get attracted by small cashbacks. Check how committed the intermediary is towards claim support.
PB recommendation: Hospital and claims can be hectic, and you need someone standing in the hospital 24*7 in the case of emergency and also takes full ownership.
11. Declarations are Crucial:
Accurate and complete declarations on the insurance application are essential to ensure that the policy covers all relevant medical conditions and risks. Providing false or incomplete information could lead to claim denial and policy cancellations.
PB recommendation: Health insurance policies are issued based on the information provided in the proposal form and it’s a legal contract. Sometimes, sellers may provoke to not declare medical history, but it will only lead to claim denial later. Over communicate as much as possible.
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