Health Insurance Myths Busted
Written on Saturday, July 9, 2016
By Sanjiv Puri
Buying a health insurance policy for self and family is considered to be the first step in the financial planning process. Still, many of us ignore it, citing lame reasons. A medical emergency may strike anyone, anywhere at any time. Be prepared to meet the rising hospital cost before it damages your investment portfolio. Do not take chances when it comes to insuring against medical needs. Here are some myths that might be making you to not buy a cover and deter you to take informed decisions. Read on to find out the reality.
I am still young and in perfect health. Why should I buy health insurance?
In fact, the right time to buy a health insurance cover is when you are in the pink of health and leading a fit life. A reason often cited to buy health cover at an early age is its low premium as the health risk is low in younger lives. As one age, the body gets prone to illnesses and hence the morbidity risk gets higher and so does the premium.
The health insurance is not only about illnesses and diseases. It’s a universal truth that accidents may occur anytime and at any age. A health cover could come handy in such an event. At times, certain ailments remain unknown to us until their symptoms are visible. As per regulations, such pre-existing ailments are covered after at least 48 months of holding a health policy. Therefore, buying early may help in better claim management. Although, not a mandate, a policy bought at an early age and renewed for quite some years without any claim, may help in better claim experience as and when it arises. Remember, one doesn’t buy insurance to get sick rather it helps cover the risks if there is a hospitalization.
The best policy is the one that has the lowest premium.
Unlike a term life insurance plan which is low-cost and high-cover plan, an attempt to find out the cheapest health plan may not be the right approach. It’s almost improbable to find two plans with similar features to make a comparison based on premium. The low-cost plans may not include all features or may have restricted features. Most health insurance plans, nowadays, have more than just the plain-vanilla basic version to offer. While the basic version caters to the most essential aspects of hospitalization, the enhanced versions (termed as premium, exclusive, elite etc.) usually comes with added or extra benefits. So, while comparing them, ensure that you are comparing the similar versions for better selection. The premium should be the last factor to consider among the final few plans that you decide for.
My employer has provided me with a group medical cover. Why should I buy a separate policy?
If your employer provides an option for group health coverage, grab it even if you would have to pay a portion of the premium. The coverage amount may be restrictive, so look at the coverage amount and see if it is sufficient. Also, remember that this group cover will continue as long as you are in the job, especially if you are in the private sector. The period between switching jobs may leave you unprotected. Moreover, few insurers are calling off their contract with the employers and thus leaving several employees stranded without any coverage at all. Therefore, having your own health insurance policy helps.
Coverage in a health insurance plan starts from day 1
A common grouse among most policyholders is that insurers decline coverage on flimsy ground, citing non coverage of certain medical events. In reality, the coverage may be declined on account of ‘waiting periods’ which are always disclosed in the policy document. Being aware of these may help in a better claim experience. Every health insurance policy will have ‘waiting period’, before which the claim against specific ailments will be paid.
No diseases get covered during the first 30 days from the commencement of any policy. However, only accidental hospitalization gets coverage from day one. Further, some diseases are covered only after the expiry of the specified period. There are 1-year, 2-year, 3-year and 4-year exclusions for certain diseases. The pre-existing illnesses are mostly covered after the expiry of four claim-free years.