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How to Choose Best Health Insurance Policy. step by step guide.

Updated: Aug 20

Checklists are everywhere. Like that piece of paper you see behind thewashroom door in your office. Or the airline co-pilot who checks off hischart and gives the “let’s fly” thumbs up to his crew. Health Insurance is a big decision with anumber of variables to consider. And in this blog, we will present a checklistwith 5 of the most important variables that you need toconsider that will help you identify the health insurance plan that suits you the most.



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Number 1 – Buy a health plan that fits yourtop requirement Health insurance has evolved dramaticallyover the last 10 years in India with a range of insuranceproducts with different features and specifications. There are health insurance products suitablefor students, for couples, for young families,for senior citizens, for people with heart diseases, fordiabetics and even plans for people who have already been diagnosed with cancer. It is difficult to get lost in choices soyour first aim should be identify your number 1 need. Is itcoverage for any existing illness that you already have? Or is it coverage for maternity and childbirth as you are planning to get married and havea child? Or is it the availability of treatment abroad? Once you are clear about this, you can thendecide about the coverage that you need. While there isno established thumb-rule, it is a good practice to go for a minimum of 6 times of your monthlysalary. So if your salary is 50,000 rupees – youshould consider a plan of atleast 3 lacs rupees and can goupto 5 lacs of coverage.


Number 2 – Find a cashless hospitalizationnetwork which covers the top hospitals in your cityPoint blank. You cannot opt for a health insurance planwhich does not offer a cashless service. Cashless service means you can have your medicaltreatment done without having to pay the bills yourself and the bills are directly settledby the insurance company with the hospital. And while all insurers offer cashless service,not all hospitals are part of the insurer’s cashlessnetworks. In fact, of the 50,000 odd private hospitalsin India, insurers offer cashless service inanywhere from 4,000 to 8,000 hospitals Since cashless is a pretty good thing to haveand the cashless network varies from insurer to insurer– do ensure that you look through the insurer’s cashless hospital list and ensure that yourcity’s most popular hospitals are available in that list. Remember to look for the best hospitals incity and not merely the total number of hospitals in yourcity because 90% of all hospitalization is planned which means you want to go for thehospital that offers the best healthcare.


Number 3 – Read the fine print and seekout the exact coverage offered There are 5 core components to policy coverage First - In-patient hospitalization coveragewhich is pretty much the reason for buying a healthinsurance plan which is the maximum amount upto which you can claim against hospitalexpenses Second - Day care treatments are proceduresthat take less than 24 hours at a hospital like in thecase of cataract, tonsils, chemotherapy, liver biopsy, kidney stone removal etc. Here, look for a planwhich covers all day-care treatments without restrictions or plans which cover a high numberof day care treatments. Third - Room Rent is the cost or type of roomthat shall be allocated to you as per the plan chosen. Now, some plans have no capping on room rent,some offer a single private room and some allow alimit of upto 1 or 2% of your sum assured. So on a 3 lac cover, a 1% allowance on roomrent will give you a maximum room eligibility of 3,000 rupeeswhich might not be sufficient. It is important to knowwhich type of room or what is the maximum allowance on a hospital room so that you canplan your insurance needs accordinglyFourth - Pre and post hospitalization refers to the reimbursement of any expenses priorto and post discharge which are directly attributableto the illness or injury for which the policyholder wasadmitted. You might typically see a pre and post hospitalizationeligibility of 30 and 60 days respectively but some plans put limitationson the coverage amount You might want to check for these and stickwith plans that offers you the most coverage onthis. And finally, your coverage may have somesub-limits. A sub-limit is a cap on how much apolicyholder can claim. For example – we saw a sum-limit of 1% onroom rent. Similarly, some planshave sub-limits on certain procedures like cataract might have 10,000 rupees per eye. Maternityexpenses always have a sub-limit with a cap for normal deliveries and a separate cap forcaesarean deliveries. So, these 5 elements – in-patient hospitalization,day care, room rent, pre/post hospitalization andsub-limits of certain procedures form the core of your coverage which you should examinecarefully while considering any health insurance plan. Generally health insurance companies offera lot more features – like daily allowance, domiciliaryhospitalization, companion benefit, physiotherapy allowance etc. - but we have kept these asideas these are definitely not need-to-have coverages.


Number 4 – Examine the plan’s waiting period, co-payment and exclusionsWaiting period is a sort of a hibernation period during which any claims made will notbe admissible. The key waiting period you need to look foris for pre-existing illness if & only if you have any existingillness. Some insurers offer a 4 years waiting period,some 3 years and some even offer a 2 year waiting period. As a rule, lower the waiting period, the betterit is. Additionally also look out for co-paymentswhich are a share of the claim that needs to be paid fromyour pocket. Co-payments are generally triggered in seniorcitizen or specific need plans so it is important to read the policy wordings beforebuying one


Number 5 – Identify benefits that enhancementyour sum assured The cost of medical treatment is on the riseand hence, it is wise of us to look for health insuranceplans which enhance my coverage over time. This is done in two ways – First. No Claim Bonus or NCB as it is popular calledis a way by which insurers reward policyholders for having a claim-free year with an increasein sum insured ranging from 5 to 50% at the samepremium. This way you can accumulate enough no claimbonus to increase your sum insured by upto 100%. Different insurers have different rules onapplying NCB but have a check on this The second way by which insurers enhance suminsured is through a feature called restoration. Under this benefit, if you were to consumeyour entire sum insured then the insurer would add somemore coverage without taking any additional premium for any claims which are for an unrelatedillness. Like NCB, there are different rules for differentinsurance companies so do read the policy wordings or take help of Destine for morein-depth understanding of this concept. Net net, go for policies which have a goodNCB and restoration benefit. And there you have it. If you push the core of your health insuranceresearch around the 5 steps we just explained, there isno reason why you wont have with you a very powerful health insurance plan. It is also important to mention some variablesthat did not make our top 5 list such as OPD expenses,world-wide cover, wellness services, health checkups and in-house claim settlement.


These might beimportant in some scenarios but come into the fray only after the top 5 considerationsare satisfied. I reckon an hour of research on Destine shouldbe good enough to arrive at which health insurance plan might be the one for you andwill save you a lot of heartburn, metaphorically speaking,in the future. If you liked this blog, do hit the like button and share it with your friends. Thank you for reading


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