An ideal health insurance not only aids your financial health but also your access to necessary medical care for a very long time. However, the market is full of options these days. Unless one knows how to read between the lines of options and complex terms, it is easy to fall for the wrong plan which can lead to inadequate coverage or unexpected expenses. In this regard let’s learn common pitfalls to avoid while selecting a health insurance to truly protect you and your family.
10 Critical Mistakes to Avoid When Selecting a Health Insurance Policy
- Not Adjusting Coverage to Keep Up with Inflation
It is important to go for a plan in which your coverage amount keeps pace with inflation. For instance, in 2022-2023, Asia experienced a rising healthcare cost inflation of 14%. If your coverage doesn’t adjust itself with the inflation, you may find yourself underinsured during the need in future.For example, if you have a cover of ₹10 lakh, you need to increase the amount by at least 14% each year to keep up with the inflation rate. Alternatively, you could consider increasing your coverage every 5 years to ensure it remains adequate. This will ensure your insurance plan provides sufficient coverage to meet rising healthcare costs. - Underestimating Super Top-Up Plans
Super top-up plans of most healthcare policies provide additional coverage at a competitive price. Once you hit your basic coverage limit, this additional coverage will continue to save you from out-of-pocket medical bills for further treatments. This is a very important factor to consider for those with ongoing health issues. - Overlooking the Claim Settlement Ratio
The claim settlement ratio indicates the percentage of insurance claims settled by the insurance company in a given year. These ratios are evaluated by the IRDAI to maintain a fair and efficient claim process. So, next time you choose a health insurance plan, don’t get decieved by the premiums and benefits; look for the company’s track record for claim settlement practices. - Wide Network of Affiliated Hospitals
People often ignore to assess the network of hospitals the insurance company is affiliated with before committing for a long term premium. If the company has a limited hospital network, you may struggle to find a nearby affiliated hospital while travelling in another city. Plus, a wide network of hospitals means, there is a chance to get cashless admission and get an immediate admission during the time of an emergency. - Overlooking Comprehensive Coverage Details
Two same priced premium plans from two different insurance providers may differ from each other from different aspects. For instance, one may provide a low waiting period for pre-existing conditions whereas the other may have a robust critical illness coverage. Taking into consideration such factors can significantly affect your decisions when making a choice. - Not Utilizing Add-on Riders to Customize Policy
Very few people know that a single policy may not cover all potential health cases. With add-on riders, you can customise your plan for specific benefits important to you. For instance, if a basic policy does not cover OPD expenses or alternative treatments, you can add two riders for each to save your money on related expenses. - Ignoring No-claim and Cumulative Bonuses
If you’re opting for the premium at a healthy stage of your life, never miss to opt for the plan that offer no-claim and cumulative bonuses. A no-claim bonus offers you discount on the premium for every claim-free year. Similarly, a cumulative bonus increases your sum insured for every renewal without a claim. A plan without these benefits may cost you higher out-of-the-pocket expenses during the time of admission. - Ignoring the Benefits of Sum Insured Recharge
Some insurance companies offer you a special feature to reinstate your coverage amount if you exhaust it within the policy year. This is called the Sum Insured Recharge feature. However, there could be different conditions. For instance, some plans may require you to wait for at least 45 days after exhausting the sum or might allow a recharge for a different medical condition. On the contrary, some may offer unlimited recharge for the same medical condition without any waiting period. So, be sure to compare the plans carefully in terms of a better deal for a sum-insured recharge option. - Not going through the Concept of Sub Limits
Often health insurance companies set a maximum cap of the amount they would bear against different components of a hospital. Imagine the policyholder is getting hospitalised for a serious condition that requires an extended ICU stay for the next 10 days. The per day ICU charge is Rs 15,000 but the policy includes a sub-limit on ICU at Rs 7,000 per day. The insurer could have easily avoided this additional out-of-pocket expense of Rs 80,000 by opting for a policy in the beginning with higher or no sub-limits. - Concealing Medical History
Hiding your past or current medical conditons when applying for health insurance is the biggest mistake. Most people choose to hide their existing or past medical conditions to avoid higher premiums or policy rejection. But, it is imperative to note that all insurance companies have a strong network to investigate and discover such cases on their own, eventually leading to policy rejection for non-disclosure.
End Thoughts
Selecting the right health insurance plan takes more than just finding the cheapest option. You have to take into account the full spectrum of benefits and potential drawbacks each policy offers. Afterall, the aim is to select a plan that aids you to focus on recovery rather than financial stress during the time of medical emergencies.
