Health Insurance: What You Must Know Before You Buy
Buying health insurance has become a stressful task. Policies today are filled with sub-limits and sub-clauses, and while we are at our most vulnerable during a medical emergency, insurers try to minimise payouts. So do not treat health insurance like an impulse purchase — treat it like a carefully evaluated contract.
First, Decide What You Actually Need
Ask yourself:
- Is a ₹5 lakh cover enough for my city and hospital preferences?
- If hospital costs are ₹5k–₹6k per day, does my cover support that?
- Am I okay with a shared/ double room, or do I want a private single room?
We usually buy policies for “features”, but the real challenge is in hidden conditions.
Who Should Have Health Insurance?
Anyone who does not have a personal medical corpus worth multiple crores should take health insurance.
Types of Health Insurance
- Individual Policy
- Family Floater (shared sum insured): cheaper, but if one member claims heavily, others are left with a reduced balance.
Tip:
- Take individual policies for high-risk members (e.g., elderly, smokers, alcohol users) because adding them to a floater increases premiums for all.
- Use floater for children or low-risk adults.
The Hidden Devils in Policies
1) Room Rent Cap
Example: You buy a ₹5 lakh cover with 1% room rent capping, that’s ₹5,000/day. If you choose a ₹10,000/day room, you don’t just pay ₹5,000 extra. In many policies, all hospital costs get proportionately reduced, even surgery and post-op costs.
Solution: Avoid room rent capping or take a higher sum insured.
2) Co-Pay
Avoid at all costs. This forces you to pay a fixed % on every claim.
3) Sub-Limits
Some policies cap payout on specific procedures (e.g., only ₹2 lakh for a heart attack). Avoid such policies.
4) Zonal vs Pan-India Policy
Premiums sometimes depend on your PIN code. Don’t take a rural address just to reduce premiums; this can trigger a forced co-pay (e.g., 20%). Not a deal-breaker, but clarify with your agent.
5) Top-Up vs Super Top-Up
Prefer taking from the same company for a seamless cashless claim.
- Top-Up: Activates only after the base sum is crossed within a single claim.
- Super Top-Up: Works across multiple claims in the same year.
Example: Base 5L + Top-Up 5L
- Surgery 1: ₹8L → 5L from base + 3L from top-up
- Surgery 2 (later): ₹2L → Cannot claim (top-up doesn’t reset)
With Super Top-Up, that 2L can be claimed.
6) Pre & Post Hospitalisation
Most provide 60 days pre-op + 180 days post-op. Some offer only 30/60 - choose based on age & need.
7) Day-Care Coverage
Covers procedures not requiring 24-hr admission - useful in cities where medicine is advanced.
8) Extended Coverage
Look for AYUSH coverage if you intend to use it. Cosmetic is optional.
9) Waiting Periods
- Standard claims: 30 days
- Critical illness: 90 days
- Maternity: 9 to 36 months (policy-dependent)
10) Pre-Existing Disease Waiting
Usually 3–4 years. Some diseases have waiting even if you don’t have them; read the policy wording.
11) No Claim Bonus
Must-have. Sum insured increases in future years without claims, e.g., 5L → 7.5L in 3 years.
12) Ambulance Charges
Check if covered.
13) Cashless Network
For cities, it's less of a concern. But for tier-3 towns, confirm hospital tie-ups.
14) Free Health Checkup
Important. Yearly checkups through an insurer keep health records updated and reduce the chances of rejection for pre-existing.
15) Restoration Benefit
If 5 lakh is restored once a year, you can claim a total of 10 lakh. But most policies restrict using restoration for the same disease, so read the terms.
16) Exclusions
Read exclusions like registration fees and permanently non-covered diseases.
17) Cashless + Reimbursement Combo
Always choose policies that allow both.
- Accident claims: cashless is crucial.
- Planned surgeries: reimbursement is better as many hospitals inflate bills in cashless fraud.
Most Important
Never lie about smoking, drinking, or health history. Claims can get fully rejected later.
These are the essential checkpoints before selecting a policy. You may not get a plan that ticks every box, so prioritise based on what matters most to you.
