Want to buy health insurance but not sure how to do it? Here's some help.
01-Mar-2022 •Aakar Rastogi
With the pandemic taking a toll on our lives, the importance of adequate health insurance for all family members is felt like never before. Health insurance also reduces your tax as the premiums are exempt up to a certain limit. No doubt, buying a health cover is necessary. However, selecting the right option is quite confusing for many. In India, over 30 companies are providing health insurance and each has a variety of plans. Here is how you can choose the right health cover.
Compare premiums
You can compare various insurance plans, especially their premiums, on insurance-aggregator websites like PolicyBazaar and Coverfox. Submit your basic details like age, smoking habits and the size of the cover you are looking for. A comparative table with premiums charged by different insurers will be generated in a few seconds. Consider it as a starting point to shortlist a few insurance plans based on the premium. You may also look at some other important factors like the waiting period and the network of hospitals.
Calculate the cover amount you need
There is no thumb rule to decide how much health cover would be sufficient. You may come across policies that will offer a cover of as high as Rs 1 crore. It is, however, not necessary to buy such a high cover, as it will increase your premium. Also, the size of cover is not the only thing that one must consider while buying health insurance. Several other factors should also be considered, as discussed in this article. Still, to give you an idea, have a cover of at least Rs 15-20 lakh for a family of three to four people.
Compare floater and individual cover
Floater plans are usually less expensive than individual plans. However, floater plans run on the assumption that all the family members are very unlikely to fall ill and need hospitalisation during the same year. However, in the context of a pandemic, like COVID, this premise holds little significance, especially if the size of your insurance is too less as compared to the number of family members covered. Besides, buying a floater cover may not always be less expensive. The cost of health insurance scales up with age and the premium is usually based on the age of the oldest member. So, if you have the elderly at home, it may be beneficial to take an individual cover for them. For example, a floater cover of Rs 10 lakh for two individuals aged 35 and 61 will cost around Rs 50,000. On the other hand, if they opt for an individual health cover of Rs 10 lakh each, the total cost would be around Rs 45,000 only. So, if the age difference between the oldest member and others is quite big, try out different combinations by using online calculators to check the overall premium of buying a floater for everyone or two separate covers - one for the oldest member and one for other members.
Check the network of hospitals
Almost every insurance company provides a dedicated search box on its website to check the hospitals it is empanelled with. Check whether the hospitals near your residence or the ones that you usually go to are empanelled with the insurer or not. Do remember that you will not get the cashless facility if you are treated at a non-empanelled hospital. Although you can still claim reimbursement, you initially need to meet the expenses out of your own pocket if the hospital is not empanelled with the insurer. If your job requires you to travel or you have to visit other parts of the country quite often, don't just look at the hospitals near your house. Extend your search to areas you often visit and look for the coverage of network hospitals there too. Some health-insurance plans also provide overseas coverage. But it is usually expensive. So, while going abroad, you should rather look for travel insurance. Usually, travel insurance also covers the financial costs of health emergencies and is comparatively less expensive.
This is the first part of the story. You can read the second part here.
If only I had known this earlier...
No progress on reining in insurers
Five smart money moves to make in 2023
Surrendering a ULIP in the lock-in period
