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Health Insurance : Checklist for buying a policy

Planning to buy a new health insurance policy, then go through this checklist before you zero down on any particular policy or health insurance provider.

1. Individual or family floater : Premium for health insurance decided based on age of oldest member in family floater policy. If you are planning buy a policy for yourself and parents, then buy two separate polices one for yourself and other for your parents to reduce premium. In your policy your can include your spouse ,children and siblings.

If you are unmarried then buy a individual policy, you can convert your individual policy to family floater when you have to include your spouse and later children.

2.Cashless treatment: Check if the policy covers cashless treatment and list of network hospitals approved for cashless treatment. It will not make any sense to buy a policy, if there is no good hospital in your neighborhood providing cashless treatment.

3.Maximum age covered: Go for insurance policy with no upper age limit. Some insurance providers cover only upto age of 65 years. Thus you will have to buy a new insurance after at age of 65 and premium charged at that age will also be higher , plus your pre-existing diseases may not be covered in initial years.

4. Sub-limit : Check for any sub-limit on room rent and medical procedure. Sub limit is cap set by insurance company on medical expenses.​ For example insurance company has sub-limit of Rs 50,000 on kidney treatment and your actual treatment cost is Rs 60,000 , then balance Rs 10,000 has to be paid by policy holder.

5.Co-payment clause : In this clause certain percentage of claim amount has to be borne by policy holder.​For example if there is 20% co-payment clause and total hospital bill is Rs 50,000, then insurance company will only pay Rs 40,000 and balance 20%(Rs 10,000) has to be payed by policy holder.

Insurance company may quote a lower premium as compared other company, but they may have a sub-limit or co-payment clause.

6. Pre-existing diseases cover: If any of the members to be covered has any pre-existing disease, then check after how many these disease will be covered. As per IRDA, they should be covered after 4 years, but some providers cover them after 3 or 2 years.

7.Claim Ratio: Check health insurance incurred and settlement ratio.

Incurred ratio is total value of claims paid by the insurance provider upon total value of premium collected by it. For example if provider has collected paid Rs 80 crores as claim and collected 100 crores as premium, then incurred ratio is 80/100 = 80%

Incurred ratio of above 100 means that insurance provider is collecting less premium then claims, hence chances of rejecting claim are high.

Settlement ratio is total no of claims approved by the insurance provider upon total claims submitted to it. For example if health insurance provider approves 80 claims out of 100 submitted claims, then claim ratio is 80%. Go for insurance provider with higher claim ratio.

8.Maternity benefit: If you require maternity benefit then check if it is covered under the policy and waiting period for the same.

9.Exclusion list: Go through insurance exclusion list mentioned in the policy document carefully, to avoid surprises in future when making a claim.

10. Additional benefits: Do not get attracted to benefits like ambulance cover, domiciliary treatment, free health check up etc. As this benefits are not of much relevance.

You can go in for add on covers like daily cash benefit and critical illness rider.