Buying Guide

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Health Insurance Buying Guide

I. How to Buy Health Insurance in 5 Easy Steps

  1. Decide on the family members that you want to cover through health insurance
  2. Decide on the amount of coverage needed, based on your estimate of health costs and your existing coverage from employer provided insurance etc.
  3. Compare the options of taking individual policies vis-a-vis a floater policy, or critical illness  or  other specialized policies based on your requirements.
  4. Look for Maximum Renewal Age
    Maximum Renewal age is the age on which the coverage on your health insurance would discontinue. Remember, your core goal, when you buy Health Insurance is to save yourself from mounting healthcare costs right through your life.Better, look for Lifetime products.
  5. Contact an agent/broker to purchase the health insurance product
  6. Don’t Compare Premiums
    Never start by comparing premiums. Health Insurance is long-term purchase and it is more than a Mumbai-Delhi Air Ticket, which you can compare and buy from comparison/aggregator websites. Health Insurance is a long-term complex contract coupled with complex services. Comparison of premiums could be largely misleading and could result in a disaster. Comparing Health Insurance requires deeper insights into the overall insurance contract (called policy wordings) over and above price comparison. Either you need to get yourself into comparing the features in detail, or take help of an unbiased health insurance advisor.


II. Buyer’s Checklist

For buying a health insurance policy you do not need any documents apart from the cheque or bank draft that you need to pay your premium with. However buyers aged more than 45 years, might need to undergo a medical checkup and certain diagnostic tests like blood tests. At the time of making a claim, your health insurer might require you to show your ID proof ,medical documents and bills.


III. Where to Buy

You can buy health insurance either directly from any general insurance provider or from authorized intermediaries like insurance agents or insurance brokers. Please check that these intermediaries are IRDA certified and are able to understand your unique needs and answer your queries.


IV. Questions You Must Ask – What You Need to Consider Before Buying

Buying an individual health insurance policy is more than just looking at the premium amount.You will need to consider many factors before purchasing your health insurance policy.

Check whether the insurer facilitates cashless settlement of claims

You might have a preference for a specific doctor or hospital where you might have been seeking treatment in the past or have a preexisting relationship .This doctor or hospital should ideally be a part of the insurer's network of hospitals for cashless settlement of expenses.

Its essential to know the  ailments that will not be covered in the initial years of the policy and what pre-existing conditions that would affect coverage. As you will be open to these risks in the initial years of the policy. Also of importance are the permanent exclusions like AIDS, cosmetic surgery and dental surgery that are currently not being covered under an individual health insurance or mediclaim policy. Its important to check with the health insurer about  the coverage before going in for an expensive treatment.

Check all the details of the expenses that will be reimbursed e.g. diagnostic and medication costs might not be covered under all health insurance policies.

Due to rising costs of health care  many insurers have enforced sub-limits for various kinds of expenses. So, check whether there  is a maximum amount each plan will pay for a specific expense and if there are any sub limits on specific kinds of expenses.

Check whether expenses arising for treatment due to war, riots or a terrorist attack are covered


V. Selecting the Best Health Insurance Product for Yourself

As you might be indisposed when you need to utilize your health insurance, select a policy that you and your family members will find easy to use. After all, you or your family should not be running around to take care of paperwork when your immediate priority is to get medical care. When selecting a health plan, check the following features:

Check if cashless hospitalization is included. What is the number of hospitals where this facility can be availed ? Where are these hospitals located ?

Many plans also have inbuilt features of disability insurance and personal accident insurance. Check whether these are part of the plan you are choosing.

Check whether the plan has any specific coverage for critical illness.

In case the medical insurance policy is for dependents like parents, check the maximum entry age and the maximum renewal age. You do not want to end up selecting a policy just for a year when your actual requirement is for 5 years.

Check whether special conditions like diabetes can be covered under the plan.


VI. Now That You Own Health Insurance – Whats Next

Annual Renewal

Most health insurance plans are available only on an annual basis - timely renewal of your health insurance policy is of utmost importance. Just like car insurance needs to be renewed annually, health insurance also needs to be renewed annually. It is not a one time buy but an annual expense that you must budget for. And like you do not leave your car without an insurance cover even for a day – you certainly cannot afford to be without health insurance  for a single day.

In India as of now, the track records of consumers are not transferable across companies hence its important to choose a suitable policy the first time around and renew the same year on year and not switch the insurance provider. Also every insurer provides discounts or bonuses for customers who have a claim free year. Understand these features and take full advantage of them.

Review your coverage amount periodically

As time passes your needs will change. Therefore, you must also review the coverage amount every year keeping in mind the relative health of the family members and any birth or death in the family.

Some best practices

  • Understand the process of making a claim

Please read the fine print and understand the process of making a claim thoroughly from your agent or broker. Ensure that your family members also understand the same in case you are the one who is afflicted with any ailment.

  • Keep all your medical records in one place

Ensure that all your medical records and support documents including Health Insurance cards are kept safely in an easily accessible place known to all your family members.

  • Build awareness of network hospitals

Ensure that everyone in the family knows the network hospitals near your home covered under the health insurance policy.  Storing their phone numbers on your mobile emergency call list might be very helpful for the same.

  • Keep some cash aside for medical emergencies

Always keep some cash aside for medical emergencies as health insurance might not cover 100%  of the costs. In many cases you might end up seeking the costs as reimbursements.

Making a claim

You must follow the insurer's norms while making a health insurance claim otherwise you will face delays in processing of the claim. Please go through the following to avoid commonly made mistakes:

a) Be prepared with the correct documentation:

Every insurer specifies the documents to be submitted while making a claim they include providing the original documents like

  • original final bill with detailed break up of various billing heads
  • original and complete discharge card  mentioning duration of ailment
  • original investigation reports with corresponding prescription /request
  • pharmacy bills along with the signed claim forms.

b) Making the claim in time:

In order to get reimbursement, usually the documents would have to be submitted within 30 days after the patient's discharge. To avoid delays, please submit  your claim in a timely manner.

c) Norms for cashless settlement are different

When you buy a cashless medical policy from an insurer, you will be issued an identity card with the name of a third party administrator (TPA). The TPA helps you in the processing of a claim and ensure fair billing at the hospital.

There may be two scenarios of hospitalization - planned hospitalization and emergencies.

In the case of a planned hospitalization;  like in case of planned surgeries, you will have to inform the TPA at least 72 hours before being hospitalized. Thereafter, the insurance company will issue a letter of authorization and you will be able to avail of the cashless service.

In case of emergencies, the TPA must be informed within 48 hours of hospitalization.

(Note : The above time limits may vary by TPA/Insurer)


VII. Understand the Fine Print and Know Your Rights as a Consumer

Like any other insurance policy  a health insurance policy is a contract between you the buyer and the insurer. It is essential to understand all the terms specified in the policy document. Please remember that an insurance contract is a contract issued in good faith. And if you fail to make any disclosures required by the insurer at the time of the issual of the policy then the policy will not be in force.

For example, many insurers ask you questions about your present health before issual of a policy. If you suffer from heart disease and do not disclose this to the insurer. Your insurer might not cover any expenses you incur for treating your heart condition.

Please read all the exclusions and the applicable expense reimbursements before deciding on the course of treatment that you plan to get reimbursed through health insurance.

In case your claim is not being accepted or being delayed inordinately you can approach the Grievance Redressal Cell of the Insurance Regulatory and Development Authority (IRDA). This cell   has been specifically set up to look into complaints from policyholders.

Buying Guide