Buying health insurance is one of the most important financial decisions, but many people make mistakes that lead to unnecessary expenses or rejected claims. Mis-selling, hidden clauses, and inadequate coverage are common issues buyers face. Here’s how you can make a smarter decision and avoid costly mistakes when purchasing a health insurance policy.
1. Cheap Policies Are Not Always the Best
It’s tempting to choose a policy with a low premium, but such plans often come with limitations. They may not cover important aspects like room rent, certain treatments, or post-hospitalization expenses.
- What to do instead: Focus on comprehensive coverage instead of just the premium cost. Look for policies that include benefits like day-care treatments, pre-existing disease coverage, and sufficient room rent allowance.
2. Be Honest About Your Health History
Many buyers avoid disclosing pre-existing health conditions like diabetes or high cholesterol, thinking it will raise premiums. However, hiding medical history can lead to claim rejection later.
- Tip: Always be transparent about your health while filling out the proposal form. This ensures your claims are processed smoothly when needed.
3. Check the Insurer’s Claim Settlement Record
A policy is only as good as the insurer’s ability to honor claims. A high claim settlement ratio indicates the company’s reliability in paying out claims.
- What to verify:
- Claim settlement ratio (CSR): Should ideally be above 90%.
- Claim rejection rate: Lower is better.
- Claim processing time: Faster processing can be a lifesaver in emergencies.
4. Read and Understand Policy Documents
Agents might simplify details for you, but relying entirely on them can be risky. Insurance clauses often include terms like waiting periods, exclusions, and sub-limits that can catch you off guard later.
- Action point: Read the Customer Information Sheet (CIS) provided by the insurer. This document summarizes key features and exclusions in simple language.
5. Ensure Adequate Sum Insured
Medical inflation is rising rapidly, and treatments are becoming more expensive. A low sum insured might not cover your hospital bills, forcing you to pay from your pocket.
- Expert advice: Opt for a policy with at least ₹10–15 lakh coverage for a family floater plan. For individual plans, choose coverage based on your location and healthcare costs in your city.
6. Look for Cashless Network Hospitals
Cashless claim facilities ease the financial burden during emergencies, as you don’t have to pay upfront for treatments.
- How to check: Review the list of network hospitals in your insurer’s panel. Ensure they include reputed hospitals near your residence.
7. Watch Out for Sub-Limits and Co-Payment Clauses
Many policies include sub-limits for expenses like room rent or co-payment clauses requiring you to bear a percentage of the claim amount.
- Tip: Choose policies with minimal or no sub-limits to avoid surprises during claim settlement.
8. Add-on Covers Can Enhance Your Policy
Standard policies may not include benefits like critical illness coverage, maternity benefits, or OPD (out-patient department) expenses.
- Recommended add-ons:
- Critical illness cover for severe ailments like cancer.
- Super top-up plans to increase coverage beyond your base policy.
- OPD cover for regular doctor visits and diagnostics.
9. Consider Long-Term Policies for Better Benefits
Single-year policies are standard, but multi-year plans can offer additional discounts and benefits.
- Why opt for long-term plans:
- Lower premiums due to discounts.
- Avoid the hassle of yearly renewals.
- Lock-in benefits even if premium rates rise.
10. Evaluate Family Floater vs. Individual Plans
For families, a floater plan is economical as it covers multiple members under one sum insured. However, for older members, individual policies might be a better choice.
- When to choose what:
- Family floater: Ideal for young families with children.
- Individual plans: Better for senior citizens or individuals with health risks.
11. Check Waiting Periods for Pre-Existing Conditions
Most policies have a waiting period before covering pre-existing conditions or specific illnesses like hernia or cataract.
- Pro tip: Opt for policies with shorter waiting periods, ideally 2–3 years.
12. Focus on Preventive Healthcare Benefits
Some insurers offer coverage for preventive health check-ups or wellness programs. These benefits encourage regular monitoring and early detection of illnesses.
- What to look for: Policies that include free annual health check-ups or fitness rewards.
13. Portability Can Help If You’re Unhappy
If you’re dissatisfied with your existing insurer’s services, you can switch to a better provider while retaining your benefits like waiting periods.
- Portability tip: Start the process 45–60 days before your current policy expires.
14. Digital Services and Apps Add Convenience
Many insurers now offer mobile apps for policy management, claim tracking, and health monitoring.
- Why it matters: Apps can provide instant updates on claim status, policy renewal reminders, and even wellness tips.
Final Note
Buying health insurance is a long-term commitment, and the right choice can save you from financial stress during medical emergencies. By keeping these tips in mind and researching thoroughly, you can choose a policy that offers true value and peace of mind.
