Saving money on expenses to keep the aggregate expenditure within the budget is a common exercise. Whether it is shopping for grocery, apparels, gifts, or the daily household expenses, all of us go that extra mile if it means saving a few hundred rupees. Bargaining – the word we stick with whenever we shop. Are you ashamed you haggle over the prices or buy something which is cheaper than the pricey substitute? You shouldn't be, after all it’s your hard earned money and saving always comes in handy in contingencies. However, always buying a cheaper product without considering other factors is unwise. Say health insurance for example, with a multitude of choices available in the market, do you settle on the plan only based on the premium? What about the plan’s features and scope of coverage?
For the investor it is good news since newer features are available to him yet at the same time, you must be careful not to indulge your choices only based on the cost of buying the plan. Here are some pointers an average customer must take into consideration while shopping for a health insurance policy:
• Coverage – When you buy a health plan, you want your plan to cover every medical eventuality you might face. However, every plan does not have the same coverage options. While most plans have a universal scope of coverage which includes hospitalization expenses, ambulance charges, pre and post hospitalization expenses, day care treatments, etc., some coverage options are not universal. Features like maternity cover, restoration of Sum Assured, critical illness cover, AYUSH treatments, etc. are not offered by every plan and as such, before buying, you should check the list of expenses covered and those which are excluded to determine which expenses pertain to your lifestyle and which do not.
• Sum Assured – Ensuring the minimalistic premium does not ensure that you are optimally insured. In the modern age of cutting edge treatments and surging medical costs, having a low coverage amount is risky. You must ensure that the amount of coverage opted will be sufficient to meet the medical casualties faced by you and your family even if the underlying premium increases in amount.
• Pre-existing Waiting Period – Almost all health insurance plans have a waiting period ranging from 2-4 years during which pre-existing ailments are excluded from the scope of coverage. Those of you whose ailments are within the purview of pre-existing diseases need a plan which has the lowest waiting period so that any complications arising out of such illnesses are insured against. Thus, you should look at the waiting period clause instead of only the amount of premium
• List of network hospitals – Every insurer has a specified list of hospitals under its tie-up and availing a treatment at one of the network hospitals will ensure a cashless and speedy claim settlement. Look at the list of hospitals under the insurer’s tie-up when you are considering buying a policy offered by that insurer. Check whether your preferred hospital and a hospital of your area is in the list or not so that when time comes, you don’t have to run around searching for hospitals that will honor your cashless treatment request
• Renewability – The Insurance Regulatory and Development Authority (IRDA) has asked insurers to allow lifelong renewability clause in their plans which enable individuals to renew their plans throughout their lifetime without there being a limit on the exit age. This comes in handy in older ages when buying a new plan becomes difficult and fraught with limitations. Even so, many plans do not come with the lifelong renewability clause and cease coverage after a certain age. Needless to say, such plans should be avoided and plans with lifelong renewability should always be invested in.
• Company’s claim settlement process and history – Reputation is what differentiates one company from the other and in the health insurance sector reputation is merely the reflection of the company’s claim settlement ratio. The ratio depicts the proportion of claims honored by the company against the total claims raised against it. Higher the ratio, better the reputation. Look at the company’s claim settlement record before you buy the plan to ensure that your claim will be honored. Another thing to check is whether the company provides cashless settlement facility or reimbursement facility. The former facility of claim settlement is hassle-free and does not require you to foot your medical bills while the latter may be burdensome as you have to foot the bills yourself and later get them settled from the insurer. So, two things to make sure of – the facility of claim settlement and also the settlement record of the company.
What should you do?
It is true that saving money is important and we usually buy things which are cheaper than their counterparts but is it always wise? In the context of mobiles which all of us use, the market is surging with China-made models which promise great features and cheap prices, yet we buy a branded model from Samsung, Nokio, Micromax or, if we can afford, Apple. Why not settle with China-made models which are cheaper? Why do the brands attract us? Even among such brands, we have specific preferences even if it means shelling out a bit extra. Why? It is because of the brand’s reputation and the mobile’s longevity and durability. If we do not compromise on that then why do we compromise on securing our own health? The promise of cheaper premiums may hide relevant features which you might ignore. Do not ignore such features which have a higher bearing at the time of claim. Your little saving today may result is a great loss in future if your policy excludes certain coverages and you have to foot the huge bill involves. So, be wise and buy the plan looking at all the relevant points besides premiums.