World Health Day 2023: 3 things you must check before buying health insurance

World Health Day 2023: Given how expensive medical treatment can be, it is prudent to cover expenses with a health insurance policy rather than by dipping into your savings.

On World Health Day, celebrated every year on April 7, has turned the spotlight on health insurance which should be an essential part of your financial plan. Not only does it help you cover the cost of health emergencies that land you hospital, but it also helps you focus on utilising your savings better given that health-related expenses are taken care of.

Here's a breakdown of the three things to check before buying health insurance:

1.) For a good health insurance policy, scrutinise the premium, the hospital network, the illnesses that are included, whether it is cashless or not, and the waiting period before you can claim for general treatment and for expenses on maternity and pre-existing illnesses. Also, check for sub-limits. These limit how much you can claim for certain things. For example, your insurance may cover cancer treatment, however, if there is a sub-limit, you will be able to claim the cost only partially. If your insurance policy has a room rent sub-limit, it means that you may not be eligible for the room you desire.

2.) Look out for deductibles and co-pay. Deductible refers to the amount (of the hospital bill) you have to pay before claiming the rest from the insurance company. This amount will be specified in the insurance agreement and you should be aware that you need to have at least this much set aside for hospitalisation expenses. Co-pay is similar. However, it refers specifically to a percentage of the claim you will need to pay.

3.) The most important aspect of any insurance policy is claims. When it comes to this, you should assess the no-claim bonus that your policy provides, and the claim settlement ratio of your insurer. A no-claim bonus shows up as an increase in the coverage if, in a year, you do not put in a claim. Comparing the no-claim bonus across policies is one way to make your policy efficient in the long run. If you have taken a policy at a younger age, no claims for the next few years can even double your sum insured without having to pay a higher premium.