With medical expenses going through the roof, hospitalisation can be a nightmare for the middle class. Health insurance can be a good tool that can help surmount the difficulties arising out of increasing healthcare costs. While having a health insurance has almost become a necessity today, one needs to be mindful of a handful of factors before taking up a policy. According to experts, choosing a policy is akin to investing in mutual funds or stock markets.
All these require proper a n a lysis and care f u l planning. In fact, in the case of health insurance policies a lot more careneeds to taken as the terms and conditions are replete with jargons which only mavens can decipher. Some of the things one needs to look at while choosing the policy are: ensure that claims process is easy; have access to a large network of hospitals, etc. “Before buying a health insurance policy, one needs to assess one’s lifestyle and health status.
The best option would be to cover all family members,” says Adhil Shetty, CEO of BankBazaar.com, adding that the sum insured should be finalised after taking inflation into account. “Health insurance is for lifetime. While one may feel that one could always buy another insurance policy a few years down the line, premiums become more expensive with age of the insured.
Therefore, it is better to buy health insurance for lifetime,” he adds. Several policies come with a cap on the room rent, ICU charges and doctor’s fees. “This is one key factor one should consider while deciding an insurer, as this factor could depreciate the value of health insurance with inflation. Assume that the room rent for a privateroom today is Rs 4,000. In 10 years, at an inflation of 7.5 percent, the room rent would be more than Rs 8,000. If one has a cap of Rs 5,000, one would be paying close to 40 per cent of the room rent from his pocket. In 20 years, the same room would cost approximately Rs 18,000.
So, less than 25 per cent of the room rent would be borne by the insurer, while the remaining has to be paid by policy holder,” says Shetty. Ideally, one should opt for a policy with private room eligibility.Most policies come with clauses on sub-limits and copay. The former puts a limit on particular expenses, usually as a fraction of the sum assured. For example, a particular surgery may be capped at 50 per cent of the sum assured. On the other hand, in case of co-pay, a part of the total expense would have to beborne by the insured, even if the total amount is well within the sum assured of the policy.
“There are several trade-offs here, and people optingfor health insurance should make sure that they understand what all these mean and compare different policies on these factors before taking a decision,” says Shetty. Experts aver that understanding the policy iscritical as it involves financial implications. If you haven’t understood properly, seek expert advice.
“Another important factor to check is if the policy pays for medicines or not, as these expenses make up a major portion of overall bill. Also, focus on the network of hospitals covered by the insurance company. Insurance holders should compare the hospital network covered by the insurance provider and see if the areas and hospitals they and their family members likely to be hospitalised come under this,” says Subba Rao Anupindi, senior chartered accountant from Hyderabad.
Source- The Indian Express