How to choose a health insurance plan

Most individuals especially the employees believe that their corporate insurance cover is sufficient. In many cases, it could be so due to the added additional advantages of covering for maternity expenses, pre-existing diseases and parents (even for an extra cost). Moreover, with the top-up options available to add on over the corporate cover, the benefits outstrip most of the otherwise available options for the public. These are good but if one were to change jobs or even quit job and start on their own, in these cases it wouldn’t fit the bill. So, how would one approach to this?

The most common criterion for deciding an additional or even a primary health plan is the premium it costs. The problem with this approach is that it mayn’t address what’s necessary for them. This is because the premium of a health insurance plan depends upon the age of the individual, family members and the options one is getting them covered for. So, this kind of analysis would not be helpful.

One should be, first, aware of their requirements. For instance, if they already of children or have decided to not to have further children then it doesn’t make really sense to opt out for a health insurance which covers a maternity benefit. Instead, one could explore other options which could include for instance any critical illnesses or cancer related ones, if there’s a family history, to ensure protection against such risks. The bottom line is that instead of trying to understand the various possible options available in the market, one has to concentrate more on understanding their own needs.

This also brings into focus on what one is opting for the cover. For example, most health insurance products have limitations on various parameters like the room rent, procedural costs and other including the ambulance services. While opting for a health insurance cover, it becomes critical to choose options, depending upon the location one is living or where it’s required. Also, one could consider the possible hospitals they have in mind within their locations/cities. This would help to freeze the most suitable ones especially if it includes the parents and other dependants.

Additionally, one needs to look into the conditions like co-payment, co-insurance, deductibles and upper limit on respective diseases or/and procedures, etc. to zero-in on an insurance plan. Also, one needs to consider the additional benefits like free or conditional health check-ups which keep track of the health conditions. The other critical factor to take note is the exemptions or conditions to relieve out of these exemptions. Some of the diseases or procedures are only considered after a certain period and this needs to be compared across the products to arrive at the best suited option.

This brings one to check for the alternatives available in the market at a competitive price. Things like no-claim bonus varies across the products with some providing a discount upon the renewal premium while in one plan the sum assured or the insurance cover is increased upon each claim-free year. One has to consider their requirements and accordingly opt for a matched plan. Also, one needs to deliberate on the waiting period(s) available for certain diseases or procedures which would clear path for a seamless claim.

If possible, a claim ratio or claim history of a particular insurer could be considered before taking into a contract. However, the current portability option provides for shifting between the insurers without losing the benefits, one need to be aware of these issues. The other important issue is to have a buffer in terms of insurance coverage despite the corporate cover to supplement in case of an additional cover or even for an additional requirement. So, having a personal cover is critical and important suiting ones need.
(The author is a practising financial planner and could be reached at k.naresh.k@gmail.com)