In this uncertain world, health insurance planning has become an integral aspect of overall financial planning. You could even call it the backbone of a healthy life. However, if your health insurance goes awry, the price you pay to rectify it may be higher than you could imagine. Small mistakes made when purchasing or renewing a health insurance policy can compromise healthcare quality for you and your family members. You may even have to deplete your savings to pay the high medical bills.
Selecting a good and right health insurance policy is easier said than done. Whether you’re purchasing a new policy or renewing a health insurance policy, you must consider various aspects covered by the plan. However, most people either do not research their policy thoroughly or do not know what factors to consider leading to purchasing the wrong health insurance policy.
Here are some common mistakes made while purchasing a health insurance policy and what you can do to avoid them:
Not getting sufficient coverage
The rapid increase in healthcare expenses has made health insurance purchase a mandatory requirement in today’s world. However, policy buyers often make the mistake of buying health plans with lower and cost-effective premiums, leading to purchasing a policy with insufficient coverage. A health insurance policy with inadequate coverage beats the whole purpose of opting for health insurance. Further, when a medical emergency arises, the low cover will be exhausted in no time. The policyholder will then have no choice but to dig into the savings or liquidate assets to pay for the medical expenses.
Therefore, it is recommended that you research your family’s healthcare needs, understand prior family history, compare various policies, and then narrow down on a health insurance policy that matches your needs and your budget.
Hiding prior medical history
It is also observed that insurance policy buyers tend to hide crucial details of their medical history with the fear of the policy getting rejected or because this may lead to paying higher premiums. Do not hide your medical history or lifestyle, as this could lead to rejection of your insurance claim later. It will also impact your medical profile negatively and, in some cases, may even be called out as insurance fraud.
Not reading the policy terms and conditions thoroughly
Reading your policy’s terms and conditions is as important as purchasing the policy. These contain crucial information on policy coverage, inclusions, exclusions, network hospitals, etc., which is essential to help you avoid any unpleasant surprises at the time of submitting or raising a claim.
Not understanding the co-pay clause
Some insurance policies levy a co-pay clause for policyholders with medical conditions, expensive medical treatments, metros, non-network hospitals, etc. This clause states that the policyholder must share the cost of the treatment with the insurer. The cost borne by the policyholder could be between 10 - 20 percent depending on policy terms. Therefore, policies with a co-pay clause tend to have a lower premium rate.
Relying solely on insurance provided by the employer
It is good that employers sponsor group mediclaim policy; however, relying solely on one policy is not a wise decision. More often than not, a group policy covers anywhere between 2 - 4 lakhs, which is considerably low. Furthermore, the employer may suddenly decide to cut down on benefits, defeating the purpose of having insurance. Lastly, if you choose to leave the company, you will lose the health cover. Therefore, having an individual health insurance policy along with the group cover is advised.
Making any of the mistakes mentioned above while buying health insurance can have adverse effects that may become a financial burden rather than security. Instead, it is best to steer clear of these mistakes and pick the right insurance plan for you and your family.
The author, Nikhil Chopra, is Chief Business Officer at Medi Assist Healthcare Services. The views expressed are personal
(Edited by : Anshul)