Avoid these six common health insurance mistakes

• Depending only on your employer’s Group Policy: You should check what kind of benefits your employer’s group health insurance policy offers. Check what is the total amount and nature of illnesses that your company’s group insurance covers. Does the policy cover your spouse, children, parents and other dependents? If your company’s group insurance is not adequate for your needs, then you should buy additional health insurance to protect your family’s healthcare needs. You should also consider buying additional healthcare cover as a security for your family’s health protection, in case your employer suddenly decides to cut down the benefits or if you leave your current employer for better job prospects


• Buying a health insurance policy without comparing with other policies: There are more than 25 General Insurance Companies marketing and selling a large number of health insurance plans. These plans have a wide range of premiums, limits and features. Please read our article, Protect your family with health insurance, to know the key considerations involved in buying health insurance. If you buy your health insurance policy without adequate research and comparing with other policies, you may end up buying an expensive policy or a policy that is not best suited for your needs.


• Choosing the cheapest policy: The cheapest policy may not be the best one. Premiums should be commensurate with the benefits offered by the health insurance policy. There are a number of policy features that you should review:-
  
  
  • Treatment wise limits and co-pay policy
  
  
  • Day wise Cash limit
  
  
  • Maximum renewal age
  
  
  • Network of empanelled hospitals
  You should understand the benefits and carefully review the policy wordings, and then compare the premiums. Health insurance is a complex contract. You should engage a good financial adviser, experienced in health insurance, to help you select a health insurance policy which is suitable for you. Finally, you should do a credibility check on the health insurance companies you are considering. You should read online reviews or find out from your financial adviser, about the claims experience, policy changes, and customer service of the health insurance companies.


• Underestimating your sum assured: Sum assured is the maximum amount of cover for medical expenses in one policy year. You premium is directly linked to the amount of cover or sum assured. You should be pragmatic in determining how much cover you need. You can save on premiums by choosing a lower sum assured, but you may be exposed to financial risks if the cost of medical treatment in the event of a serious illness in the family, is more than the sum assured. As a thumb rule, the cost of bed per night is usually 1% of the sum assured. You can find out how much is the cost of bed per night in a hospital of your choice and estimate how much sum assured you need. This is just directional. You should ensure that the sum assured is adequate to cover your needs in a medical emergency.


• Not paying attention to the Health Insurance Exclusions: You should read very carefully, the exclusions in your health insurance policy. If you or your family members suffer from a medical condition that is not covered by your health insurance policy, your claim may be rejected and you may get hit with a huge bill. Check your family’s medical history and make sure that your health insurance policy covers the illnesses in your family’s medical history. Some diseases are hereditary and therefore it is prudent to ensure that they are covered in your policy.


• Not disclosing all information to the Health Insurance Company: Sometimes insurance buyers do not disclose all information to the insurers in the fear of paying higher premiums. This is a mistake and can often be a costly one. Health insurance companies reject claims of insured on the grounds that the insured did not disclose correct information. You should disclose all information honestly to your insurer. It will save you a lot of headache later on.

Conclusion

Investors should avoid these common mistakes when buying health insurance policies. Health insurance is essential in ensuring our family’s critical healthcare needs. Therefore, thoughtful consideration must be devoted to health insurance. It is always beneficial to engage a financial adviser with sufficient experience in health insurance, because of the complexities involved with the product.