FinanceFellows
KF Rookie
When it comes to health insurance, we've all been in that situation where a friend or relative just started working as an insurance agent and needs to meet their targets. So, to help them and ensure you get the most value for your money, consider the following points before making your first health insurance purchase:
1. Individual vs. Floater Policies: Decide if you want individual coverage for a specific member (such as parents above 40 or yourself) or a floater policy that covers multiple family members. Be cautious about adding your parents to your policy, as it can increase your premium significantly.
2. Private or Government Insurance: Consider whether you want to buy insurance from a government agency or a private firm, as each has its own advantages and limitations.
3. Base Cover and Super Top-up: Determine how much coverage you need, taking into account factors like a 7% normal inflation rate (or possibly higher in healthcare). Calculate the insured amount and consider adding a super top-up to handle situations where you exhaust your coverage in a single year.
4. Sub-limits on Diseases: Pay attention to sub-limits imposed by insurance companies, which may limit coverage for specific treatments or conditions. This could significantly impact your out-of-pocket expenses.
5. Room Rent: Opt for a policy with no room rent limit to ensure that you have the flexibility to choose your preferred hospital accommodation without incurring additional expenses.
6. Co-pay: Some policies offer lower premiums but come with a co-pay clause, where you need to share a percentage of the medical expenses. If possible, avoid policies with co-pay clauses.
7. Zonal and PAN India Policies: If you're purchasing health insurance for parents residing in tier 2 or 3 cities, consider zonal policies to reduce costs. However, keep in mind that these policies may have a 20% co-pay if treatment is required outside the designated zone. PAN India policies, while more expensive, provide coverage nationwide.
8. Pre-Post Hospitalization Coverage: Check how many days of pre and post-hospitalization expenses are covered under the policy, as this can vary between insurance providers.
9. Daycare Charges: Ensure that your policy covers daycare procedures, allowing you to receive treatment without requiring hospital admission.
10. Cosmetic and Ayush Treatments: Decide whether you need coverage for treatments like plastic surgery or Ayurvedic treatments, as this varies based on personal preferences.
11. Waiting Period: Understand the waiting period for pre-existing diseases before you can make a claim. Different policies may have varying waiting periods.
12. No Claim Bonus (NCB): Find out if the policy offers a no claim bonus, which rewards you for not making any claims during a policy year.
13. Cashless Hospitals: Opt for policies that provide cashless hospitalization facilities, ensuring a hassle-free experience during medical emergencies.
14. Ambulance Charges: Confirm whether your policy covers ambulance charges, as these can be substantial during emergencies.
15. Free Health Checkup: Some policies offer free yearly health checkups, which can be beneficial in case of disputes over pre-existing conditions.
By considering these factors, you'll be better equipped to make an informed decision when purchasing your first health insurance policy. Remember that insurance is a long-term commitment, so take your time to evaluate different options and choose one that best suits your needs and financial circumstances.
1. Individual vs. Floater Policies: Decide if you want individual coverage for a specific member (such as parents above 40 or yourself) or a floater policy that covers multiple family members. Be cautious about adding your parents to your policy, as it can increase your premium significantly.
2. Private or Government Insurance: Consider whether you want to buy insurance from a government agency or a private firm, as each has its own advantages and limitations.
3. Base Cover and Super Top-up: Determine how much coverage you need, taking into account factors like a 7% normal inflation rate (or possibly higher in healthcare). Calculate the insured amount and consider adding a super top-up to handle situations where you exhaust your coverage in a single year.
4. Sub-limits on Diseases: Pay attention to sub-limits imposed by insurance companies, which may limit coverage for specific treatments or conditions. This could significantly impact your out-of-pocket expenses.
5. Room Rent: Opt for a policy with no room rent limit to ensure that you have the flexibility to choose your preferred hospital accommodation without incurring additional expenses.
6. Co-pay: Some policies offer lower premiums but come with a co-pay clause, where you need to share a percentage of the medical expenses. If possible, avoid policies with co-pay clauses.
7. Zonal and PAN India Policies: If you're purchasing health insurance for parents residing in tier 2 or 3 cities, consider zonal policies to reduce costs. However, keep in mind that these policies may have a 20% co-pay if treatment is required outside the designated zone. PAN India policies, while more expensive, provide coverage nationwide.
8. Pre-Post Hospitalization Coverage: Check how many days of pre and post-hospitalization expenses are covered under the policy, as this can vary between insurance providers.
9. Daycare Charges: Ensure that your policy covers daycare procedures, allowing you to receive treatment without requiring hospital admission.
10. Cosmetic and Ayush Treatments: Decide whether you need coverage for treatments like plastic surgery or Ayurvedic treatments, as this varies based on personal preferences.
11. Waiting Period: Understand the waiting period for pre-existing diseases before you can make a claim. Different policies may have varying waiting periods.
12. No Claim Bonus (NCB): Find out if the policy offers a no claim bonus, which rewards you for not making any claims during a policy year.
13. Cashless Hospitals: Opt for policies that provide cashless hospitalization facilities, ensuring a hassle-free experience during medical emergencies.
14. Ambulance Charges: Confirm whether your policy covers ambulance charges, as these can be substantial during emergencies.
15. Free Health Checkup: Some policies offer free yearly health checkups, which can be beneficial in case of disputes over pre-existing conditions.
By considering these factors, you'll be better equipped to make an informed decision when purchasing your first health insurance policy. Remember that insurance is a long-term commitment, so take your time to evaluate different options and choose one that best suits your needs and financial circumstances.
