While we plan for some of our future Financial Goals like Children’s education, Retirement etc. we often don’t plan for mishaps like ill health or loss of life which could adversely affect our finances. Planning for uncertain emergencies should be the first step towards financial planning as occurrence of such emergency can disturb future financial life. It’s prudent to plan for risk management while you plan your finances to fulfill your goals. Buying a simple insurance plan can protect you from significant downsides. Health insurance is one of the insurances which concerns most of the individuals.
While looking at the options available one should choose a plan which suits them rather than going by the options provided by the insurance agents. The requirement of how much you need to be covered in your health plan is only one factor. The remaining factors should be considered depending on your lifestyle. If you haven’t spent some quality time in choosing the right plan, you have encouraged insurers to pose you irrelevant questions ultimately leading to rejection of the claim. These situations arise when you choose the wrong health plan. Here are 9 do’s and don’t before you plan to take a health plan.
1) Don’t think your company’s group health insurance is sufficient:
Most of the employees think that the group health insurance will cover the risk. However, these insurance plans have certain defined limitations. You need to check how much amount is covered under this and should know whether it would support your family members. Most of the health insurance covered under this is inadequate and also this coverage would not be there at the time of leaving the job. So, it is ideal to take an additional health plan for you and your family members despite of having group health insurance.
2) Don’t commit Moral Hazard:
One should be honest in revealing all the facts regarding health on the proposal form of the health plan. A major mistake committed by people is that while taking a health plan they don’t disclose the facts. This is a moral hazard and considered as a fraudulent act by the insurers which ultimately leads to rejection of the claim. There are a few health plans which come by without undergoing medical test but these plans will not serve the purpose. It is always wise to take a health plan which need all the details regarding your health and it is also important to clarify everything from your end as well.
3) Don’t look for Low Premium Payment Plans:
You might not be aware of the risk that you face in future. So you might underestimate the situation and take a low premium health plan. It is important to note that the low premium plans don’t include several important features. So, in this way one might face a critical financial situation despite of having a health plan at the time of crisis. However, this doesn’t mean that you should take a high premium plan but one should choose the appropriate plan by considering factors which is useful to him/her.
4) Check the factors which impact the Premium:
Premium prices of health insurance is based on individual’s age and health condition. But, there are some factors which impacts the premium prices. One of the factors is Co-Pay. In this feature, the insured may have to make a partial payment towards the overall hospitalization expenses. This generally happens when one crosses the age of 60 years. It will be wise if you go for a No Co-Pay option even if the premium payment is high compared to a Co-Pay option. The next factor is the Sub-limits in which insurers tend to cap certain expenses on lodging. So, it is ideal to choose a plan which is free from these factors.
5) Check the No-Claim Bonus:
Every Insurance company would offer a bonus on the sum insured for the next cycle of years only if you haven’t claimed in past. Generally a bonus of 5% or 10% is given by the insurers. It is advisable to go for a plan which has higher incremental no claim bonus, preferably one which would be at par with the increase in hospitalization expenses. This is because a bonus less than 10% won’t make any difference at the time of claim. People would generally check this feature and take a health plan but there are many other things to be considered as well in order to choose the right health plan.
6) Be firm on low Pre-existing exclusion:
In some cases there are Preexisting conditions of the insurer with regards to hospitalization. Almost all of the insurance plans have a waiting period for pre-existing conditions so that the insured does not use the coverage immediately after making the premium payment. The maximum period for Pre-existing exclusion would be for four years. As one cannot make claims during the period of Pre-existing exclusion, it is beneficial to choose a policy with a low waiting period.
7) Choose the plan which has no disease waiting period:
Some health plans have a clause which has a waiting period of some specified diseases like cataract, hernia etc. One cannot wait for so long for insurers to cover, so this causes the individual to pay from his pocket though he procures a health plan. So, it is important to choose plans which have very few diseases under such waiting period or no disease waiting period in order to be on a safer note.
8) Know the disease-wise capping:
Even the petty part of the plan will play a major role at the time of claim. There are some plans which have cap on certain ailments. In such cases one cannot claim the total amount. So it is always good to spend some time on the health plans to study the features. Then choose the plan which is hassle free in nature and suits your profile.
9) Claim settlement ratio:
Claim settlement ratio represents how quickly and efficiently the insurer has serviced the claims. It generally becomes an important decision making factor as people consider this as a major feature for a Health Insurance Plan. But one also needs to check the rejection ratio of the claims and the number of pending claims. Choosing health insurance plan by only considering claim settlement ratio might not save you from risk.
Conclusion:
People would be in a misconception that their health plan will cover all the costs at the time of claim but in reality there are situations where their claims got rejected or covered only to some extent. This happens because of choosing inadequate health plans. Therefore, it is important to choose a health plan by considering all the factors in detail. This process may be time consuming but once the appropriate plan is chosen then your health plan can save you from risks in the future. Even having a sound health insurance plan may not be the only way out of such trouble as there are expenses which may occur during the treatment which are not a part of health expenses like transportation charges or a stay in outside city during the treatment or expenses for the attendant. It is advisable to create some health emergency fund which may cover these expenses as well as certain treatments which are not covered in any health insurance plan.
