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My interview in Money Mantra magazine

Pick the right health insurance
There are scores of health insurance plans available in the market, but it is very important to pick the one that suits your requirements. Tips for the right choice:

Have you ever you sat with your family and sifted through the health insurance policy you bought a couple of years back to review whether your health plan provides adequate cover to you or your family in case of any mishap?

Health insurance is must because of the uncertainties in life and the high cost of medical treatment. But many of us just buy a health insurance policy and sit on it for years, only to take out the policy document while making a claim.

A health insurance policy is not like a gadget or a decorative piece which you just buy from the market, bring it home and put it in a corner. It’s a misguided and flawed approach to health insurance, experts say. Rather, a health insurance is a critical protection should something wrong happens to you or your family. And, therefore, you should do due diligence before buying any health insurance policy and do a regular review after buying it. But how to go about finding the right health insurance plan for yourself or your family?

Read between the lines
How many of us even care to read a health insurance policy document from A to Z before and after buying it? Many people just rely on word of mouth or get carried away by advertisement of insurance companies before opting for a health cover. But if you follow this short-cut way, you could be doing injustice to your actual health needs, warn experts.

Many people having health insurance plans crib about either the inadequate cover, poor hospital network or the policy mismatching with their needs. In a majority of cases, the problem arises because either they didn't read the terms and conditions of the policy or didn't understand the policy at all.

“Scan terms and conditions carefully, be well versed with them before you take up a mediclaim policy,” cautions Adhil Shetty, CEO, bankbazaar.com.

“If you are opting for cashless facility, ensure that it is mentioned clearly in the contract and also make sure you get treated in a hospital that falls under the TPA (Third Party Administrator) network. Understand whom you should contact and amke it an issue if your insurance company does not honor your claim,” he adds.

Further, he says, make sure the track record of your insurance company is flawless before inking your contract with it.

Match your needs with cover

Another mistake people make while choosing a health cover is going just by a cheaper plan than the one required as per their age, income, employment conditions, health and paying ability, say experts. Opting for a health plan that is cheapest is a grave folly. Although the amount you pay as premium does matter, it should not be the only criterion for choosing a health plan.

"You should opt for the mediclaim policy that has a good hospital network and that provides you coverage for the maximum number of diseases and up to the maximum age limit. Premium should be given less weight,” says Sanjay Matai, promoter and owner of The Wealth Architects, Pune.

Exclusions, or what is not covered, is another critical but oftne overlooked part; find out these before you buy the health insurance. There are certain types of diseases which are either not covered by some health insurance companies, or they deny claim by terming these diseases as preexisting. Therefore, make sure what types of diseases are covered by the insurance plan.

K Ramalingam, Director and Chief Financial Planner, Holistic Investment Planners, Chennai, says, “To decide which health plan is the best for a person the factors to be considered are exclusions and the extent of coverage, the premium amount and tie up with your preferred/nearest hospital.”

Brand or settlement ratio?

Another criterion many buyers apply while selecting a health plan is to check the company’s claim settlement ratio, which simply means how much claim the company settles compared with claims made.

But this approach too may not give you a fair valuation of the company, say experts.
“Examining the claim settlement ratio is yet to give a true picture as it is a new concept in the Indian market, since health insurance companies have been reporting their claim settlement history for the last five-six years. More important than the company’s claim settlement ratio is the company’s brand value and the length of its presence in the market,” says Matai.

He said claim the settlement ratio may keep changing, unlike a company's brand value which is more stable.

"Health insurance is a long-term relationship between a buyer and a company and, therefore, one should go for big names which are operating in the market for a long time (15-20 years),” he adds.

Agrees Shetty. “It is important to establish the reputation and popularity of the insurance company concerned as it enable you to complete your research and zero in on the best policy provider who can prove useful in your hour of need,” he says.

Take a combo

Though it depends on an individual's needs and premium-paying ability, it's not a bad idea to combine two or more health plans or take additional riders with the existing plan to get more benefits and coverage.

Two or more health insurance schemes should be combined to get maximum benefits, says Ramalingam. “For example, having a separate critical insurance policy, accident and disability insurance along with mediclaim policy will give better coverage,” he adds.

Matai adds, “I believe traditional mediclaim policies are still the best option as no health insurance plan is complete enough in terms of health cover or the benefits offered. Therefore, one should keep the medicalim policy as the main health cover for oneself and one’s family and can buy a couple of additional covers from among many health plans available.”

For instance, the daily hospitalization cash plan has a limit on daily hospital expenses of, say, Rs 2,000 per day. However, if the hospital expense is more than that, the plan won't reimburse beyond the expense limit. In the case of medicalim policy, there is no such daily expense limit. Secondly, the number of days spent in hospitals is limited in daily hospitalization cash plans which restrict the benefits of the whole idea of health insurance.

Further, Matai continues, one can also take critical illness cover (of Rs 5 to Rs 10 lakh) along with medicalim policy for added benefits. Critical illness plans, for instance, pay full sum assured and thus cover for any loss of income during recuperation whereas mediclaim policies cover the hospitalization expenses. A combination of these two provides maximum coverage in the case of critical illness. If one wishes, a third plan -- daily hospitalization cash plan -- can also be bought for a small premium, along with this combination, to cover allied hospital expenses not covered by the mediclaim policy.

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