Buying Health Insurance? Here’s What You Must Know

Hospitals can be frightening for many people. Blame the bad vibes, health scares or expensive hospital bills that can burn a hole in your pocket. However, if it is the latter, you are most concerned about, just know you don’t have to be if you have health insurance on your side. 

Health insurance might not be mandatory, but it is essential if you don’t want to sabotage your savings fund. Gladly, people are beginning to realize the importance of health insurance

If you belong to the very category of people and are planning to buy health insurance, don’t let it be a random and mindless decision. Ensure you are enlightened about the following details before proceeding with the purchase. 

  • Health Insurance Needs to be Renewed Every Year: 

Unlike other forms of insurance, most health insurance plans in India have a policy tenure of one year. This means they must be renewed every year before the grace period ends. A grace period starts when health insurance matures; it is usually a 15-day window wherein you must renew the policy to retain the health insurance benefits. 

 The good news is health insurance plans come with lifetime renewability. So, you can renew it innumerable times to keep the benefits. 

  • The Sub-Limit and Co-Payment Clause: 

The sub-limit and co-payment clause puts caps on the claims you make on health insurance. While a sub-limit clause limits the coverage you can avail on certain medical procedures, a co-payment clause sets a proportion to hospital bill payments between the insurer and the insured. Therefore, it’s essential to check if the health insurance policy you are planning to purchase has these clauses to avoid any last-minute surprises. 

  • Waiting Period: 

A waiting period prevents a policyholder from making health insurance claims during the first few years of commencement and purchasing health insurance. It can extend to 24 to 48 months in case of pre-existing diseases. Otherwise, it can extend up to 30 days; accidents are an exception in this case. Furthermore, a waiting period applies for specific diseases, procedures, and critical illnesses. For example, a critical illness waiting period can usually extend to 90 days after the commencement of the health insurance policy. 

  • Tax Benefits: 

Premiums paid for health insurance are tax deductible as per Income Tax Act, Section 80D. It means you save tax while paying your health insurance premium. 

  • Additional Riders: 

Almost every type of insurance in India gives you the option of purchasing riders. These riders are add-ons to the policy that can extend your range of benefits at a nominal cost. These riders vary according to the health insurance provider. However, the most commonly available riders in India are waiver of premium, accident insurance rider, and critical illness rider, to name a few. 

  • Cashless Hospitalization:

 Back then, you had to file for health insurance reimbursement after paying hospital bills from your own pocket. Now with cashless hospitalization offered by network hospitals of the insurer, the bills get directly settled between the health insurance provider and the network hospital. 

  • Health Insurance Comes with Exclusions: 

It is a common misconception that health insurance covers everything. To clear the air, health insurance does come with some exclusions. These exclusions include HIV aids, injuries caused by riots, wars, drug abuse, liquor overdose, and cosmetic and dental treatments, to name a few. It is highly advisable that you know about the exclusions your health insurance plan comes with. 

  • Health Insurance Would Now Cover Mental Illness: 

As per the new regulation by IRDAI dated 1st November 2022, health insurance in India would now begin covering mental illness. This comes as a consequence of rising awareness about mental health issues. According to WHO, every 1 in 3 Indians suffers from depression. Thus, to help individuals deal with mental health issues, health insurance would now cover it in the policies. No claim related to mental health can be denied by health insurance companies. 

  • No-Claim Bonus: 

A no-claim bonus rewards policyholders when they do not file a health insurance claim in a year. Some health insurance companies in India offers this benefit. 

  • Claim Settlement Ratio: 

A Claim Settlement Ratio determines the claim settlement capability of a health insurance company in India. The metric shows the number of claims settled against the number of claims filed. A high claim settlement ratio of more than 90% increases the probability of your health insurance claims getting settled. Therefore, when choosing a health insurance policy in India, ensure that you buy it from an insurer with an impressive claim settlement ratio. 

Final Thoughts: 

Now that you know all the essential things about health insurance in India, we are sure you will be able to make a wise choice. Keep in mind all the mentioned pointers before purchasing health insurance

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