Health Insurance policy

How to Choose Health Insurance Policy in India

You love your family and want to support them in times of any medical emergencies. A good way to get healthcare financial aid for your family is to buy health insurance. With rising inflation and lifestyle-related diseases, the health insurance cover that you might have now may not be enough for the future. Hence, it is essential to consider how much sum insured you should take so that you don’t have to bear any financial expenses in the future in case of a medical emergency. Health insurance will provide you with coverage only up to a specific amount and any expense incurred above that will have to be borne by you. Hence, selecting the right health insurance policy cover amount is important. Read on to know all the features you should consider before deciding on the coverage amount. 

Selecting the right sum insured 

This is the coverage amount up to which the insurance company will agree to pay you the claim amount. When choosing a health insurance policy, selecting the right sum insured is the key. People tend to opt for a lower sum insured since it decreases the premium, however, at the time of hospitalization, a lower sum insured may not help you take care of all the medical expenses, thereby increasing your out-of-pocket expense. For instance, if you are diagnosed with cancer and you only have health cover of Rs. 5 lakh and Rs. 2 lakhs in your savings account, but the hospital bill runs up to Rs. 10 lakhs. How will you manage to pay the remaining Rs. 3 lakhs? In such cases, you must select the right sum insured, keeping in mind the expenses you cannot afford.  

  • In the past 3 years in India, 40 lakh cancer cases have been reported out of which 22.54 lakh deaths have been caused 
  • As per a renowned cardiologist, India will be recording the highest number of cardiac deaths by 2030 
  • Over 481,000 COVID-19 deaths were reported between January 1, 2020, and December 31, 2021 

Consider inflation 

A piece of lemon which costs around Rs. 2 in 2021 has now increased to Rs. 10 each. Inflation has increased due to which basic commodities have become expensive. Inflation has had an impact on medical facilities too and it can hit you harder if you reside in a metro city. If you are looking to get health coverage for the next 10 years, then it is important that you opt for larger coverage than what you are thinking would be enough for now.  

In the Economic Survey of 2022, India’s public expenditure on healthcare stood at 2.1% of GDP in 2021-22 against 1.8% in 2020-21 and 1.3% in 2019-20.

Types of health insurance policy

Health insurance is available in India under the regulations of a dedicated insurance body. Individual and family floaters are the most relevant in India. If you opt for family floater health insurance policy, it is important to know that the entire sum insured is shared between all the members covered. For instance, if you are a family of 3 having a sum insured of 5 lakh and in case you meet with an accident then sum insured of 5 lakhs will be much less to cover the entire cost of treatment for 3 individuals. Hence, you must double the coverage to what you think would be enough for the whole family. 

On the other hand, when choosing a family floater or individual health insurance policy it is important to note that the premium for a family floater would be charged based on the age of the eldest family member. Hence, if the eldest member in your family is 45 years of age and others are in their 30s then the premium would be charged based on the age of the 45 years individual which could be very high. Moreover, your kids when they attain the age of 25, will no longer be eligible to receive coverage under the family floater plan. Hence, if you have a young family, buying a family floater is recommended. In case you are looking to cover your parents or parents-in-law, then buying a separate individual or senior citizen cover is recommended.  

Opt for a higher sum insured early in life 

When people are young and healthy, they feel a lower sum insured would be sufficient for them. But it is important to note that young people are more prone to accidents and lifestyle-related diseases. Also, when opting for a high sum insured at a young age, insurance companies will be happy to provide you with it at a low premium. The premium too will be lower for the same sum insured when you are younger. The earlier you buy, the better for you as you will be able to get high coverage at a low premium. 

Deciding on the co-pay 

Co-pay is the percentage of the claim amount which you will have to pay out of your pocket at the time of claim. Opting for a higher co-pay will increase your premium, whereas a lower co-pay will attract a lower premium. If you are buying the policy for your young family, then opting for a policy without co-payment is recommended, whereas, if buying an individual policy for your parents, choose a policy with co-payment as the premium would be on a higher side owing to their age, health condition, etc. Also, if there is a difference in the age gap between your parents, opting for a separate individual cover for both is recommended. 

Features to check on before buying health insurance policy

Sum insured restoration: The restoration benefit in health insurance policy restores your entire sum insured upon exhaustion of the entire coverage amount after the claim. This is commonly known as a refill benefit and is usually covered under the policy or offered as an add-on. In times of need, this can be a great backup for meeting emergency medical expenses. This is a benefit of a family floater plan since the entire sum insured is shared between the members.  

Check on the room rent: Room rent is the cost of occupying a room in a hospital on a 24-hour basis. Room rent is mentioned in the policy document in the percentage of the sum insured form or a specific amount only up to which the insurance will provide you with coverage. Surgeon fees, consultation charges, consumable charges, etc. are associated with room rent charges. If you opt for a higher room category, the charges of such costs would be higher too and vice versa. If you choose to stay in a room higher than the amount mentioned in your policy, then you will have to pay the additional charges along with the cost of all the associated expenses that are charged as per the room category. If you are someone who prefers staying in a private AC room, then opt for a policy with such specifications or look for a policy with higher room rent. 

No claim bonus: No claim bonus is a form of reward that the insurance company offers you for not claiming in a policy year. For every claim-free year, your sum insured is increased by a certain percentage each year which can go up to 100-150% in case of making no claims for five or more consecutive years. 

Maternity benefit: Few policies do cover maternity benefits i.e., coverage for both normal and caesarean delivery along with newborn expenses is covered. However, this benefit is covered only after a waiting period of 2-4 years. If you are young, planning a family then having this benefit is a great option. Moreover, you can also purchase maternity cover as an add-on. 

Critical illness: Check the number of critical illnesses covered in the policy. If you feel that a certain medical condition which you have witnessed to be common among your friends or family is not covered then buy a separate critical illness cover add-on. 

OPD: Outpatient department expenses are good to have benefit as it provides coverage for routine doctor visits, pharmacy bills, etc. For more information and insights on reading on Health insurance policy with OPD cover 

Experts recommend you have health insurance policy cover that is at least 50% of your income. For instance, if you earn 12 lakhs a year, then having a minimum 6 lakh cover is a must. However, analyse your requirements, keeping in mind your current health condition, and finances and opt for the right health cover amount for you and your family.  

You can also keep in mind the above factors when deciding on the coverage amount for your employee healthcare.