Health insurance has been getting a lot of attention lately. The sales of health policies are rising not only in the metro cities where the awareness levels are relatively higher but also in smaller towns and rural areas. People in India have realised that the only way to fight the spiraling cost of health care and safeguard them against critical illness is by buying a comprehensive health insurance plan. Every day thousands of visitors search for health insurance plans on MyInsuranceClub but most of them have no idea on how to pick one for themselves or their family. Hence, we compiled a list of few things which you should avoid at the time of buying a health plan -
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1. Hold back facts about your medical history – In their eagerness to get a health policy, many individuals do not declare their medical history in the policy application form. Some do this because they are aware that declaration of condition/s (like diabetes, high/low blood pressure, etc) may result in rejection of their application and others skip it out of sheer laziness. Please note – any nondisclosure of facts is considered incorrect by the insurance companies and they may reject your claim.
2. Rely on employer-provided health plan – Several companies (employers) offer group health cover to their employees. Due to this many individuals feel that there is no need to buy a separate health insurance plan. Please understand that the employer-provided group cover will terminate once you leave the job.
3. Choose co-pay – In an effort to reduce premiums, people sometimes proactively opt for a co-pay facility. Co-pay means that during the event of a claim, the policyholder will pay a certain percentage (for example 10%) of expenses himself. The idea of a health insurance policy is to protect your own money as much as possible. Plus by opting for co-pay, the discount in premium is not very high.
4. Assume that all health plans are the same – Today, there is a wide array of health policies available in the market such as the staple health plan, accident policies, special cover for critical illness, etc. The benefits offered under each type of policies are different so do not pick any plan off the shelf without reading about its benefits in detail.
5. Expect your money back – For a lot of people, insurance still continues to be an alternative to fixed deposits and mutual funds. People search for health plans which will give them a part of premiums back on maturity. We should not look for such features in health plans. The idea is not to save a few thousand rupees in premium but to save an expense of lakhs of rupees if it occurs.
6. Overbuy – While there is low awareness of health insurance in most parts of the country, there is a small set of population who are obsessed with health insurance. They buy multiple health policies, higher coverage amount with extra riders and end up spending a sizeable part of their income on health insurance. Please stay away from overbuying insurance plans. The idea of insurance is to create a back up and not splurge money in the name of protection.
7. Make claims for petty expenses – Then there are people who think of health insurance policy like an ATM machine which will pay for their day-to-day medical bills and treatment costs. Again, this is a wrong notion under which people buy health plans. If a policyholder makes frequent claims then s/he will lose the No claim bonus (NCB) on renewal. This bonus percentage compounds every claim-free year and the discount goes as high as a 50% of premium. Save the petty claims for a hefty bonus!
8. Delay policy renewal – Renewal of insurance policies is often taken lightly by most Indians. The fight to improve ‘persistency’ rate is an ongoing battle in the Indian insurance industry. Every year, large number of policyholders fail to renew their policy. Renew your insurance policies as religiously as you pay your utility bills.
Indians are known for using products / appliances without reading the safety instructions or product manuals. But sometimes failing to read the product literature can cost us a lot of money and stress. So let’s make it a habit to read the product literature and understand the benefits before buying a health insurance plan.
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