Here are some of the common mistakes that people make while purchasing health insurance and some suggestions to avoid them which will make for a happy claim experience
One of the most important things these days is to buy a suitable health insurance plan for our family. But we need to understand different aspects of the policy before buying and this is where sometimes we may make a mistake. If we buy a health insurance plan either in hurry or without complete understanding of the plan it may result in unpleasant experience at the time of claim.
Here are some of the common mistakes that people make while purchasing health insurance and some suggestions to avoid them which will make for a happy claim experience.
The most common health insurance mistake is skimping on the coverage amount. You tend to lower your premium costs because of which the coverage gets limited. Would the low coverage be sufficient in meeting your medical expenses?
The remedy – medical expenses have become unaffordable to the common man. Since health plans are designed to protect you against such medical costs, invest in an optimal sum insured. Take into consideration the number of members to be covered under your plan and the current medical expenses when selecting the sum insured. If affordability is an issue, buy a top-up plan for supplementing your cover but do ensure a higher coverage.
Overlooking the sub-limits
When you buy a health plan you seldom spare a look at the limits and sub-limits applicable on the coverage features. Consequently, when you are presented with the medical bills in excess of the sub-limits you face a financial strain. You should have been careful about this particular clause of your health insurance policy before buying the health policy.
The remedy – Always find out which coverage benefits have limits and sub-limits associated with them. The most common one is room rent sub-limits under inpatient hospitalisation coverage. This sub-limit has an effect on the total admissible hospitalisation claim. So, check these sub-limits before buying the plan. If possible, try and buy a plan which has higher coverage limits or no sub-limits.
Ignoring the exclusions
Health plans have become comprehensive, but they are not universal in terms of coverage. There are some instances which are excluded from the scope of coverage of any plan. Most of you are unaware of these exclusions as you don’t tend to notice them. The result – rejection of your claim if it is for an excluded ailment/illness.
The remedy – Always go through the exclusions of your health insurance plan. This would give you a clear picture of what is covered and what is not covered under the plan so that you can make a claim accordingly and also decide whether to buy the plan in the first place.
Non-disclosure of your previous medical history
Some of us may tent to hide our existing medical ailments or previous medical history when buying a health plan fearing that either the proposal would be rejected, or the premiums would be higher. This is a big mistake that people generally make because, during a claim, if the insurer finds out that you had purposefully wrongly stated your medical history when buying the plan and the claim is due to an existing illness, the claim would be rejected.
The remedy – Insurance contracts are the contracts of utmost good faith where the policy is issued based on the information you provide. So, always be truthful when buying the health plan. An adverse medical history might raise your premium but at least your claims would be honoured as the insurance company would be able to account for the additional risk when issuing the policy.
Imitating your friend’s and relative’s health insurance choice
Do you wear the same clothes that your friends and relatives wear? Then why buy the same insurance plan which your friends and relatives have. Your needs are different from others, aren’t they? The plan should, therefore, suit your needs and not the needs of your friends and relatives.
The remedy – Compare health insurance plans before you buy them. The online platform allows easy comparison where you can find the different health plans suiting your requirements, their coverage features and their respective premiums. Buy a plan only after comparing and ensure that the plan is tailor-made for your healthcare needs.
Making mistakes due to lack of knowledge is common but now that you have a ready reckoner of common mistakes, be careful while choosing your health insurance plan. Avoid the above mentioned common mistakes while choosing a health plan, so that your health insurance policy provides you the best coverage benefits and pays the claims when they incur.The writer is CEO of RenewBuy.comGet access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.