Purchasing a Health Insurance Policy? Avoid the Common Mistakes and Read the Fine Print of Policy Document

A medical emergency can arise in our lives at any point in time without any prior notice. This situation can be a situation of mental turmoil due to health issues and also because of financial issues as well. With the highly inflating prices of medical facilities today, any medical emergency can financially drain all our savings and create a situation of a financial crisis. 

Health insurance will be our saviour in such times of distress. A health insurance policy guarantees reimbursement of the medical expenses incurred during treatment, thus giving us the time and a mental state to focus on our health and recovery rather than worrying about finance. There are several renowned health insurance plans which are quite beneficial to the common people such as Max Bupa Health Companion Individual plan, Manipal Cigna Prohealth Plus etc. 

Top #5 reasons to opt for a health insurance policy

Let us have a look at the significant reasons as to why do we need to purchase a health insurance policy.

1. Medical inflation

There has been a tremendous rise in the costs of medical facilities leading to situations of financial emergency during health problems. You will drain out all your savings to pay the medical bills and expenses. So, a health insurance policy is a must to save your savings.

2. Coverage of pre-hospitalisation and post-hospitalisation expenses

One of the most important benefits provided by health insurance policies is the coverage provided for pre-hospitalisation as well as post-hospitalisation benefits. Pre-hospitalisation includes those expenses which are incurred before actual hospitalisation such as various diagnosis tests whereas post-hospitalisation includes certain treatment procedures which can be carried out at the home of the patient. These are major expenses that are covered by health insurance policies.
 
3. Coverage for other expenses

There exist a bunch of other medical expenses also which are covered by the health insurance policies such as domiciliary expenses, expenditure in alternate treatment, ambulance charges, day-care services, etc. which are covered by health insurance plans.

4. Increase in the number of diseases

With deteriorating environmental conditions and an increase in lifestyle stress, lifestyle ailments are a common problem. With this rapid increase in the number of diseases, it is quite necessary to have a health insurance policy to handle situations of a medical emergency. 

5. Tax benefits

The premium paid for medical insurance policies is eligible for tax deductions under Section 80D of the Income Tax Act, 1961 till INR 25,000 for a premium paid towards self, spouse as well as children and an additional of INR 25,000 for a premium paid towards parents. If your parents are more than 60 years of age, then you get 80D benefit of INR 50,000 per annum.

You may also like to read Top 10 Health Insurance Policies with Tax Benefits

#5 Common mistakes made by policyholders while purchasing health insurance policies

There are certain common mistakes made by people during the purchase of health insurance policies.

1. Not availing sufficient coverage

Many policyholders try to keep the medical coverage low to avoid paying a higher amount of premium. This will result in inadequate coverage and in turn, the health insurance policy does not serve its purpose of purchase.  Due to insufficient coverage, the policyholder will end up spending the savings and face financial emergencies.

2. Non-disclosure of previous medical history

Many people try not to disclose their previous medical history or other facts like smoking or drinking with the fear of the policy getting rejected or the need to pay an extra premium.  But this should be avoided, as these types of practices can lead to rejection of claims in the future.

3. Not reading the fine print of the policy document

Most of us do not have the time and patience to read the entire policy document properly. But, this is quite important as the fine print of the policy document consists of details about the inclusions and exclusions of the policy. By properly going through the document, you can avoid any claim rejection at the time of emergency.
 
4. Ignoring the co-pay clause

Many of us tend to ignore the co-payment clause present in the health insurance policy. But, ideally, a co-pay clause can be of great help to you if you are being treated for some critical medical conditions. Depending on the contractual terms, you have to pay a specific percentage of the medical expenditure, i.e. around 10% or 20%. A higher percentage of co-pay will, in turn, lower the premium payment of the policyholder. 

5. No use of health insurance policy at a young age 

This is very common thinking among youngsters that at a young age when they are healthy, there is no use of a health insurance policy for them. But, a health insurance policy when bought at a young age fetches you a lower premium.

So, amongst these mistakes committed during the purchase of a health insurance policy; the most common one committed by the majority of us is not reading the fine print of the policy document carefully. This can be disadvantageous many times as there could be some hidden clauses and exclusions in the fine print of the policy document which can come to you as a surprise at the time of making the claims.

Know the top #5 clauses included in the fine print of the policy document

Let us have a look at some of the hidden clauses present in the fine print of a health insurance policy.

1. Waiting period in a health insurance policy

The Waiting period in a health insurance policy is defined as the time period for some particular ailments before which the insurance provider provides no coverage for these ailments. This can be applicable in cases of maternity coverage, pre-existing diseases, infant care, certain ailments like osteoporosis, ENT disorders, etc. Most insurance providers have a waiting period of 2 years-4 years, after which these situations are being covered. The details about the waiting period are clearly mentioned in the fine print of the policy document. You have to read the policy document thoroughly to be aware of this clause present in a health insurance policy.

2. Room rent limit

The limit of the room rent you can avail is a hidden clause in the policy document. You will be permitted according to the policy for availing the maximum charges for a room. However, if you are selecting a room whose charges are more than the room rent expense coverage provided by your policy, then you are liable to pay the exceeding amount.  Along with that, other expenses will be charged according to the size of the room you have selected. So, you should be aware of these implications of room rent limit in advance to avoid confusion.

You may also like to read Best health insurance policies without room rent sub-limit

3. Age limits for policy renewal

Usually, there are a number of insurance providers who have fixed up a particular age beyond which insurance renewal is not permissible. You should be aware of this factor before you purchase the health insurance policy. After the renewal ceasing age, you will not be able to avail of any further benefits related to the policy. So, it is quite essential to know about this fact by reading the policy document and then by a discussion with your insurance provider.
 
4. Pre-hospitalisation and post-hospitalisation expense coverage

This is a common coverage provided by the health insurance policy. The diagnostic tests, blood tests, medications, etc. before hospitalisation and the treatment procedures after discharge from the hospital are covered under the health insurance policy. But, there are even some limitations in this coverage like pre-hospitalisation expense coverage is for a particular period like 30 days or 60 days, post-hospitalisation expense coverage does not include other therapies like acupuncture, the number of days for which post-hospitalisation expenses are covered, etc. So, these factors can be clarified by reading the fine print of the policy document carefully or by consulting the insurance provider directly.

5. Exclusions of your health insurance plan

There are quite a large number of ailments for which many insurance providers do not provide coverage. Many ailments such as dental treatment, fertility operation, AIDS, etc. and many more which are not included in the coverage list of insurance providers. However, the exclusion list is different for different insurance providers.  A thorough study of the policy document will help you to be aware of all these ailments which are not included in the coverage provided by the insurer.

Also Read

The top most common exclusions of any health insurance plan

Top 5 Health Insurance Plans Available At Low Premiums

Hence, if you are purchasing a health insurance policy, it is very important to avoid the common mistakes and carefully read the fine print of the policy document. This will help you in avoiding any unfavourable situations in the future, especially while making health insurance claims.