Factors, Ways & Benefits of Buying Health Insurance

Rising medical costs these days can burn a hole in anyone’s pocket if they don’t have a strategic plan to tackle them. Health insurance is one such tool that can be extremely useful in a medical crisis.

With so many health insurance companies offering lucrative polices in India, one may wonder—how to buy health insurance?

Whether a health insurance plan is being explored online or through consultation with an agent, there are some things to look out for before buying a plan. This is a guide on how to buy medical insurance.

What is a health insurance plan?

A health insurance plan is like a subscription (of a financial service), which is paid for on a regular basis. The financial service in question is the coverage for medical treatments.

In exchange for financial support, a health insurance company collects policy premium from its customers. When a customer purchases a health insurance plan, they enter into a contract with the insurance company. This contract is an official document that binds both parties to fulfil their parts as per the terms and conditions laid out.

Why is a health insurance plan necessary?

There are too many variables in real life; one can never know what problems they’ll encounter in the future. Hence, the best way to move forward is to invest in the possibility of a secure future. There are various reasons for buying a health insurance plan, some of them are mentioned below:

Combat medical inflation

Medical inflation in India is on the rise, affecting the health care industry. Investing in a medical insurance is the best way to ensure the availability of optimum medical care for you and your family in the upcoming future without worrying about your finances.

Financial sustenance against lifestyle diseases

Looking around, one can find several people being afflicted by lifestyle diseases including diabetes as well as respiratory and cardiovascular ailments. Earlier, these diseases were more common in the elderly, but now they are prevalent in the younger generation too.

Purchasing a health insurance plan can ensure that one overcomes both the physical and financial challenges caused by such diseases.

How to buy health insurance?

Having a clear picture of requirements that must be fulfilled from a health insurance plan makes it easy to choose the right plan. Purchasing a policy is not as complex as one may think; it just requires patience and a thorough analysis of the situation from different aspects. Do some research before purchasing health insurance.

Following factors can be helpful in deciding the best plan available in the market:

Current health status

Going for a general-physician consultation before shortlisting policy options is a good idea. It can paint a clear picture of an individual’s health and potential risks. Once a person has this insight, they’ll be able to decide on the type of policy they need to buy.

Sum insured

By analysing the medical history and treatment costs against inflation rates, an individual can come up with an approximate idea of how much coverage they may require. Choosing the policy that covers the medical costs for a person along with their family is an ideal scenario as a family plan can have higher coverage and premium than an individual plan.

Taking suggestions from a doctor can be helpful too as they are aware of the cost for medical treatments in present times.

Claim process and sub-limits

Aim for a policy that has an easy-to-understand claim process and settles quickly. Health insurance companies nowadays have a network of hospitals and clinics at which they offer cashless claims. If any of these company is chosen, one can avail free medical treatment just by filling out some forms and sharing their e-health card.

Bear in mind that some policies have sub-limits on how much the insured can claim in a particular time period for certain treatments.

Additional features

Ask the health insurance company about the additional features of their policy. Looking for policies that have the following can be extremely beneficial:

No claim bonuses
Maternity benefits
Add-ons such as outpatient department (OPD) cover
OPD, inpatient department (IPD), and day care treatments
Lifetime renewal
Floater/family add-ons
Free medical check-ups (including general-physician consultation)

Where should you buy health insurance?

As of today, there are two ways in which you can purchase a medical insurance plan:

Online

You’ll get multiple search results for buying a policy just by typing “health insurance plan” in the search bar on any browser.

Either go for a standalone website of popular health insurance companies such as LIC or ICICI or compare different options from various websites. Almost all of these websites have detailed information about their policies including insured sum, tentative premium, and eligibility criteria. In case of any confusion, one can reach out to the assistance team of a company (contact information is generally available on their websites) and get their doubts cleared.

Through agents

This is a traditional approach for which, the demand is steadily decreasing with changing times. If an elderly person has an insurance plan, it is likely they were approached by an agent or concluded the deal through them. As humans, we have a natural tendency to listen to another person more than a Webpage. Hence, some people still prefer to buy medical insurance through agents of the insurance provider.

Anyone can easily book an appointment with an agent by approaching the company’s local branch or contacting them via their website.

Finalising a plan

After doing some research, one can get a vague idea about the policy they wish to purchase; exploring different options is the best course of action then. Compare different health insurance plans against each other, weighing their benefits and potential investment costs and consider the sum insured.

Policy documents

Always read policy documents cautiously to understand details about the claim process, payable premium, etc. Doing this provides the necessary clarity to proceed further.

There are chances that some people may have doubts after reading the document and need clarification. They can contact the company/agent to understand their opinion regarding such doubts.

Only after obtaining satisfactory response from an insurance company, one should proceed further. If the company’s explanation sounds even slightly dubious, it is better to take a step back and explore alternatives to stay protected against a fraud.

Share your medical history

When the best available option is selected, it is time for moving on to the next stage. Make sure that medical history (supported by past records) is shared with the insurance provider. It is very likely that a new policyholder can be asked to complete a waiting period for pre-existing diseases. This wait period can last for a few years.

Disclosing medical history will enable good-faith and increase one’s chances of getting their claims approved in the future.

Acquire a copy of the contract with all the details

Lastly, one should confirm that they have received the promises made to them in writing on the official policy document before signing off the deal. Verbal agreements will not be enough to get a claim.

Benefits of buying health insurance

Health insurance can be used as a financial tool to navigate difficulties that may arise in the future due to health problems. Some of the key benefits of a health insurance plan are listed here:

Cover for medical expenses

Most health insurance plans offer cover for medical treatments received in OPD, IPD, and day care. The things covered under health insurance can include doctor consultation, diagnostic tests, pharmacy bills, ICU charges, room rent, ambulance charges, and more.

The policy also covers pre- and post-hospitalisation charges up to a certain number of days. A few policies provide cover for a pre-existing disease as well; a person can claim these expenses after the waiting period, which may be a few years.

Cashless claim

Several health insurance companies have a curated list of in-network hospitals/clinics where treatment can be availed without paying. As mentioned above, a policyholder only needs to fill out some forms and show their e-health card for verification to avail this facility.

Tax redemptions

A policyholder can be eligible for availing a tax deduction of up to INR 25,000 while filing for ITR under Section 80C and 80U of the Income Tax Act, 1961.

How to Buy Health Insurance FAQs

Can we buy health insurance online?

Yes. Since most insurers are making their products available online, you can easily buy medical insurance from almost any company on the Internet. Many websites are specifically dedicated to compiling lists of viable options for you to consider and compare.

How much does health insurance cost?

Starting from as low as INR 250 for government health plans for a person with disability, INR 500–1000 is the average premium cost for health insurance. Following factors affect the premium cost:

Location/city
Sum insured/coverage
Current health
Age
Family income
Payment plan (monthly/annual)

What documents are required for insurance?

For purchasing a health insurance plan, you require the following documents:

Proof of identity (such as Aadhar or PAN card)
Proof of age (such as birth certificate or voter ID card)
Proof of address (such as ration card or passport)
Proof of income (such as payslips)
Past medical reports

All of these will be required along with a duly filled proposal form (provided by the health insurance company) and passport sized photographs.

For filing a claim, you require the following documents:

Duly filled claim form
Doctor consultation form
Hospital bills and receipts
Discharge summary
Test results
Pharmacy bills
Any other document supporting the claim

In case of accidental injuries, FIR or Medico - Legal Certificate (MLC) will also be required. The health insurance company will require all the bills and receipts with the hospital stamp for validation.