In this uncertain world, health insurance planning has become an integral part of overall financial planning. You might even call it the backbone of healthy living. However, if your health insurance goes wrong, the price you pay to fix it may be higher than you might imagine. Small mistakes made when purchasing or renewing a health insurance policy can compromise the quality of health care for you and your family members. You may even have to use up your savings to pay the high medical bills.
Choosing a good, good health insurance policy is easier said than done. Whether you are purchasing a new policy or renewing a health insurance policy, you should consider the various aspects covered by the plan. However, most people don’t thoroughly research their policy or know what factors to consider when purchasing the wrong health insurance policy.
Here are some common mistakes you make when buying a health insurance policy and what you can do to avoid them:
Not getting enough coverage
The rapid increase in health spending has made purchasing health insurance mandatory in today’s world. However, policy buyers often make the mistake of buying health plans with lower and profitable premiums, which leads to purchasing a policy with insufficient coverage. A health insurance policy with inadequate coverage beats the whole point of opting for health insurance. Plus, in the event of a medical emergency, the low coverage will be exhausted in no time. The policyholder will then have no choice but to dip into savings or liquidate assets to pay for medical expenses.
Therefore, it is recommended that you research your family’s health needs, understand family history, compare different policies, and then choose a health insurance policy that matches your needs and budget.
Hide medical history
It is also observed that buyers of insurance policies tend to hide crucial details of their medical history for fear of the policy being rejected or because it may lead to paying higher premiums. Don’t hide your medical history or your lifestyle, as this could result in your insurance claim being rejected later. It will also negatively impact your medical profile and in some cases may even qualify as insurance fraud.
Not carefully reading the terms and conditions of the policy
Reading the terms and conditions of your policy is as important as purchasing the policy. These contain crucial information about policy coverage, inclusions, exclusions, network hospitals, etc.
Not understanding the co-payment clause
Some insurance policies levy a cost-sharing clause for policyholders suffering from health problems, expensive medical treatments, subways, off-grid hospitals, etc. This clause states that the insured must share the cost of treatment with the insurer. The cost borne by the policyholder could be between 10 and 20% depending on the terms of the policy. Therefore, policies with a quota clause tend to have a lower premium rate.
Rely only on insurance provided by the employer
It is good that employers sponsor the group’s mediclaim policy; however, relying on just one policy is not a wise decision. Most often, a group policy covers between 2 and 4 lakhs, which is considerably low. In addition, the employer may suddenly decide to cut benefits, defeating the goal of having insurance. Finally, if you choose to leave the business, you will lose health coverage. Therefore, it is advisable to have an individual health insurance policy with group coverage.
Making any of the mistakes mentioned above when purchasing health insurance can have negative effects that can turn into a financial burden rather than a security. Instead, it’s best to avoid these mistakes and choose the right insurance plan for you and your family.
The author, Nikhil Chopra, is Commercial Director at Medi Assist Healthcare Services. Opinions expressed are personal