How to Pick the Best Health Insurance in 2024

How to Pick the Best Health Insurance in 2024

Extending health insurance coverage to your entire family is crucial, considering that a medical emergency can affect any family member at any time, potentially depleting family savings with a single hospitalization. Health insurance is a crucial financial tool covering medical expenses. It is important that we should read policy key aspects. Otherwise, you will be misinformed or be surprised during claims.

What Are important components of Policy wordings or Documents?

Terms and Conditions: Governs the policy rules, detailing rights and responsibilities.


Inclusions: Lists covered medical expenses like hospitalization, surgeries, and tests.


Exclusions: Specifies non-covered items, such as pre-existing conditions and specific treatments.


Definitions of Treatment: Clarifies terms related to medical procedures to prevent ambiguity.


Insurance Company Undertakes to Pay Hospitals: Commits the insurer to pay hospitals for covered medical expenses per policy terms.


Medical Treatment under Medical Practitioner or Surgeon: Covers treatments by qualified professionals, with detailed coverage explanations.


Expenses Due to Hospitalization: Covers inpatient or domiciliary hospitalization, with a 24-hour clause for validity.


Exceptions due to Technological Advancements: Acknowledges advancements exempting certain procedures from the 24-hour rule. The policy specifies conditions for these exceptions.


Treatment for Claim Honoring: Details the necessary procedures and documentation to honor a claim, emphasizing adherence to policy terms for successful reimbursement.


Before we proceed, sharing one incident.......


Friend experiences chest pain at a party, and we rush him to the hospital. After thorough observation and a series of tests, the medical reports reveal that everything is normal. The doctors advise a few multivitamin tablets, and  friend is discharged.

In this case, the patient stayed in the hospital for more than 24 hours, meeting one of the conditions for a health insurance claim. However, when the claim is submitted, it was rejected. The reason behind the denial is that although the patient spent more than 24 hours in the hospital, no specific treatment was administered. The insurance company requires evidence of medical treatment for a valid claim.

It's crucial for policyholders to be aware of such conditions, including exceptions.

Why Do I Need a Health Insurance Plan?

There are so many health insurance options available, and it can be hard to know which one is right for you. This article will provide you with a comprehensive guide to help you choose the best health insurance plan for your family as per your requirements.


1. You should get a health insurance policy because of  lifestyle, diseases are becoming more common and expensive to treat.


2. Medical inflation in India is on the rise and is usually around 15% per year. To keep up with these high prices and not put you and your family at risk, it is very important to have a good and complete health insurance policy.


3. Not only will your health insurance cover all kinds of hospital expenses, but it will also provide you with immediate coverage for accidental injuries and other complicated health issues that could cost you a lot of money or force you to take out a loan if you don't have a health insurance policy.

Tips to Help You Pick Up the Best Health Insurance Policy

1. Room Rent Capping/Sub Limits.

Room capping is a significant aspect of health insurance policies that influences various aspects of the treatment process. Traditionally, room capping has been set at a certain percentage of the sum assured, often around 1%. This means that the insurance policy would cover room rent expenses up to a specified daily limit, calculated as a percentage of the sum assured.

In recent times, some health insurance policies have been introduced without room capping. However, in such cases, there may be a correlation with a minimum sum assured requirement.

- Understanding the implications of room capping and the interplay with the sum assured and Proportionate Deduction,can help policyholders make informed decisions when selecting a health insurance plan that aligns with their healthcare needs and financial considerations.

Room Rent Sub Limit Misunderstanding. Example of Mr X.

Sum Assured: INR 3 Lakhs

Room Rent: 1 % of Sum Assured (INR 3000 per day)

Mr X admitted in hospital where the Room Rent including Nursing charges were INR 4000 per day

Duration of Stay: 3 Days

Total bill of hospital stay: INR 1 lakhs

So the question arise, Will the Insurer pay and settle entire bill ?

Normally we would think, since room rent as per policy was INR 3000 and we need to pay INR 4000-INR 3000 = INR 1000 x 3 Days -WRONG

Here the concept of Proportionate Deduction will apply : Insurer will pay only 75 % of the entire hospital bill (3000/4000x 100 %) and the insured will have to pay 25 % i.e. 100,000 @25 % which equals to INR 25000.

2.Day Care treatment

Day cover treatment in health insurance refers to medical procedures completed within a single day, eliminating the need for overnight hospital stays due to advance medical technology. Opting for a policy with detailed coverage categories is beneficial as it ensures transparency and adaptability to evolving medical procedures. This approach provides comprehensive coverage across various treatments. i.e cancer chemotherapy, angiography, radiotherapy etc.

3. Hospitalization Criteria and Network

The research shall be done before buying any Health policy, to get maximum coverage of hospitals. 

In non-metro areas:


- Hospitals must have a minimum of 10 beds if the population is less than 10 lakhs.


In metro areas:


- Hospitals must have a minimum of 15 inpatient beds if the population exceeds 10 lakhs.


When seeking admission


- Verify the hospital's bed capacity based on the location's population.


- Ensure the facility meets the prescribed criteria for the given population.


Understanding these categories helps individuals and healthcare providers determine the appropriate level of care based on the nature and severity of the medical condition. 

4.Pre-existing disease

A pre-existing disease refers to any health condition, ailment, or injury that the individual already has before obtaining a health insurance policy. These can include chronic conditions, past injuries, or ongoing health issues. 

For individuals with existing policies, it’s normally between 3-4 years and those contemplating new coverage, the declaration of pre-existing diseases is a crucial step. 

Look for policy which gives minimum waiting period for Pre-Existing diseases.


Example: The consequences of Inaccurate Declaration:

Consider where an individual experiences knee pain and seeks medical advice. The doctor recommends treatment and inquiries about the history of the condition. The patient reveals a childhood incident of being hit while playing hockey, leading to recurring knee pain.

The doctor, noting this as a childhood trauma in the medical records, provides treatment for the current pain. However, when the patient files a health insurance claim related to the knee treatment, the insurance company rejects the claim. The reason cited was the non-declaration of the childhood trauma as a pre-existing condition during policy application.

Key Lesson:

(1) It is crucial to declare all pre-existing conditions accurately during policy application or renewal.

(2) Keeping track of any remarks on doctor's prescriptions and ensuring comprehensive disclosure helps prevent claim rejection based on non-declaration.

(3) Transparent communication with the insurance provider is essential for a fair and smooth claim process

5. Understanding Waiting Periods:

-When you take policy Initial waiting period is 30 days except in accidental emergency

- Waiting periods are specific time frames during which certain benefits are not accessible or are limited. So, choose policy with gives minimum waiting period and list is minimum. 


- The waiting period for enhanced coverage helps prevent individuals from obtaining higher benefits immediately after porting.

6. Co-payment Clause:

-Choose policy which has no Co-Payment clause or minimum co-payment clause at higher age.


- Example: A policy with a 20% co-payment clause means that for a claim of ₹100,000, the insured pays ₹20,000, and the insurer covers ₹80,000.

7. Maternity Clause:

In case of young couples, check after how much period it would be provided and the amount of Maternity expenses. Normally it’s between 9 Months-36 Months.

- Example: A policy may have a waiting period of 2 years for maternity coverage. If a pregnancy occurs within this period, the expenses won't be covered.

8. Restoration/Reinstatement/NCB (No Claim Bonus):

Crucial and important to understand, Restoration etc. will be done only when SUM ASSURED is fully exhausted.


- Example: If a policy has a restoration feature, and the SA is ₹5 lakhs, it will be reinstated to ₹5 lakhs if fully exhausted during the policy year.

Example: Suppose in this case 1st claim is INR 4 lakhs (1 lakh balance of sum assured) and 2nd claim is 6 lakhs during same year. The company will pay only 1 lakh, as the amount 5 lakh was not fully exhausted. Remember during FULLY EXHAUSED i.e. 5 lakhs.

8. Premium at different Age bracket:

Check the slabs in respect of premium during later stages of your life. Premium rises drastically when you attain half century. Go for Insurance company which have minimum percentage rise in different age brackets.


- Example: Premiums may significantly increase after age 50. For instance, a policy that costs ₹20,000 at age 45 might increase to ₹40,000 at age 50.

9. Base Policy with Super Top-Up policy 

Take combination of base and Super Top-Up policy, the ratio can be 10 % Base and 90 % Super Top Up or 20 % Base and 80 % Super top up or mix as per your requirement’s.


The greater the deductible, the lower the cost for the equivalent amount of coverage. In this context, expenses refer to hospitalization costs for the insured and potential payouts or losses for the insurer.

Therefore, super top-up featuring a Rs. 1 lakh deductible and Rs. 10 lakh coverage will be more expensive than one with a Rs. 5 lakh deductible and the same Rs. 10 lakh coverage.It's recommend gradually enhancing the base policy if financially feasible.

 10.Choosing a Family Floater Health Insurance Policy

Selecting a family floater health insurance policy is crucial for addressing health issues related to all family members under a single coverage plan.


Individual Coverage: Choose a base health insurance policy covering at least 50% of your annual income, with a minimum coverage of Rs 5 lakh for comprehensive protection.


Cost-Effective Approach: Consider a mix of base and super top-up policies to strike a balance between coverage and budget. A base policy handles routine expenses, while a super top-up policy offers additional protection for major unforeseen medical costs.


Family Coverage: For families of four, a minimum health insurance cover of Rs 10 lakh is advised. Opt for a family floater plan for cost-effectiveness and supplement it with a super top-up policy to enhance overall coverage.


Tailored Approach: The factors like health risks, budget constraints, and family determine the right mix. Seek professional advice for personalized guidance.


"If the insured lives in a second-tier city or town, health insurance of 5 lakhs is sufficient. But if the insured lives in a major city like Delhi, Mumbai or Gurgaon, health insurance of more than 5 lakhs. Buy health insurance of more than 500,000 rupees.the insurance includes residents "Purchase a health insurance policy with an average cost of 50 to 10 million rupees, which includes a basic policy and an additional super top-up policy."

11. Ensuring Long-Term Coverage with Lifetime Renewability:

Check if health insurance plans offer lifetime renewability, ensuring continuous coverage without the need to obtain a new policy, particularly crucial as health needs tend to increase with age.

Under Section 80D of the Income Tax Act, the exemptions and amounts for tax deductions on health insurance premiums are as follows:

1. Self and Family (All below 60 years):

- Exemption Amount: Rs. 25,000


2. Self and Family + Parents (All below 60 years):

- Exemption Amount: Rs. 25,000 for self and family + Rs. 25,000 for parents

- Total Exemption: Rs. 50,000


3. Self and Family (Below 60 years) + Senior Citizen Parents:

- Exemption Amount: Rs. 25,000 for self and family + Rs. 50,000 for senior citizen parents

- Total Exemption: Rs. 75,000


4. Self and Family (Eldest is above 60 years) + Senior Citizen Parents:

- Exemption Amount: Rs. 50,000 for self and family + Rs. 50,000 for senior citizen parents

- Total Exemption: Rs. 1,00,000

Example


Rahul is aged 45 years, and his mother is aged 75 years. Rahul has taken a medical insurance plan for himself and his mother, paying a premium of Rs. 30,000 and Rs. 35,000, respectively.

- Rahul can claim a deduction of Rs. 25,000 for his policy covering himself and his family.

- Additionally, he can claim a deduction of Rs. 50,000 for the policy covering his senior citizen mother.

So, Rahul's total tax benefit under Section 80D would be Rs. 75,000 (Rs. 25,000 + Rs. 50,000).

Update on 14th January 2024.

Access Cashless treatment in Hospitals not in Cos network 

The General Insurance Council has introduced the "Cashless Everywhere" initiative, providing health insurance policyholders access to cashless treatment in hospitals not affiliated with their insurance company's network.

This initiative aims to safeguard customers from upfront payments at non-networked hospitals, reduce costs, resolve disputes through discussions, and combat fraud through real-time claims verification.

To utilize this service, policyholders must inform the insurance company 48 hours before planned procedures and within 48 hours for emergencies.

Policyholders now have the option to choose from a vast network of over 40,000 hospitals, a significant expansion from the previous few thousand.

This facility consolidates each insured hospital network into a unified one, allowing insurers to promptly include non-network hospitals in their network upon receiving a claim, ensuring timely and efficient claims processing.

Synopsis: Tips to choose best health policy 2024

Health insurance is an indispensable financial safeguard against escalating medical expenses. To effectively choose the best plan in 2024, understanding key policy components is crucial. This includes terms and conditions, inclusions, exclusions, and definitions of treatment. A notable lesson underscores the importance of not just hospitalization duration but also the necessity of actual medical treatment for a successful health insurance claim.

This condensed guide equips individuals with essential insights to navigate the complexities of health insurance in 2024, promoting informed decisions for comprehensive coverage and financial protection against medical uncertainties.





Disclaimer:

The content in this article is for informational purposes only. It does not constitute professional advice, and readers should consult with relevant experts for personalized guidance. The author and publisher are not responsible for any inaccuracies or consequences arising from the use of the information provided. Health insurance decisions should be made after careful consideration of individual circumstances and consultation with qualified professionals.


special credit: Mr. Melvin Joseph was a SEBI registered Individual Advisor (RIA) with registration number (INA 000000342) whose link are there in the post to give you more clarity.(  +91) 9820843739  |  melvin@finvin.in


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