How to choose Health Insurance?

When I wanted to buy a health insurance, I was completely baffled by the plethora of choices in the market offering different types of plans. It is an extremely difficult task to really select the medical insurance plan which will satisfy your needs.

There are two kinds of health insurance plans, the one is the traditional mediclaim policies (similar to the policies taken by companies for their employees) which does a reimbursement of any medical expenses incurred, the other way is the critical illness policies offered by life insurance companies which provide a lump sum for any critical illness. I will talk about how to choose the first kind of policy.

Some of the key questions to ask while selecting health insurance:

1) The Annual Limit: What is the annual limit of reimbursement per year. It is a good idea to choose around 3-5 lakhs since the medical costs are going up day by day.

2) Sub-limits : What are the various sub-limits in the policy? The most typically caps are on room-rent, ambulance services, doctor’s fees or diagnostics.

3) Co-payment Clause: Is there any clause of co-payment for certain cases? Some policies have co-payment clause either after certain age limit, some may have the clause of co-payment for kids, some may have this clause for specific treatments.

4) Pre-existing coverage: Does the policy cover the pre-existing illness? Some policies cover it from day one, some cover only after a specific time period (say 2 years).

5) Exclusions: Most policies will have some or the other exclusions. The exclusions come under permanent exclusions or time-period based exclusions. So for example, suicide related expenses are excluded permanently in every medical insurance. But for maternity benefits a policy may have a exclusion only for first 4 years.

It is very difficult to find a single policy which will have all the features and hence it might be a good idea to purchase 2-3 policies with different features to cover all medical possibilities.