The rising costs of medical treatment can drain you of your savings during an emergency. Starting from doctor consultations, tests, hospitalisation to post-treatment care, you will find that the money spent is always more than what you had expected. The ongoing COVID-19 pandemic has made the situation worse with hospital bills going up to an exorbitant level. During these trying times, a health insurance policy can provide much-needed financial support. But you should choose a plan carefully as a policy with a low premium may not meet your needs in case of an emergency. Read on to know why.
Why You Should Avoid a Low-premium Health Insurance Policy?
A health insurance plan requires recurrent payment of the premium amount, which may seem like an additional financial burden to many. To reduce this burden, you may want to buy a policy with a low premium. For the time being, you may feel glad that you did not spend much on the insurance cover, but would you get the benefits of health insurance in the time of need? That remains to be seen.
Do your research before choosing a plan with a low premium. Get quotes from several insurance providers as the premium amount varies from insurer to insurer. Choose the one that suits your needs the best and go ahead with it. The coverage for your future medical expenses depends on several factors such as:
1. The Ratio of Claim Settlement
The ratio identifies the number of claims that an insurance provider has settled against the number of claims filed. Usually, a figure of 80% or higher is considered good. In case you find that this ratio is not high for a low-cost health insurance plan, you may face difficulties during claim settlements.
2. Limited Range of Network Hospitals and Doctors
Low-cost health insurance policies are generally associated with a limited number of network hospitals and doctors. If you consult any doctor or hospital outside the list, you will not receive the claim. This would become problematic if you are an existing patient of a particular doctor or hospital outside the network list. You would not want to leave them as you have benefitted from their treatment but will not able to file any claim for the expenses.
3. Limited Coverage for Treatment
Low-cost health insurance policies do not cover medical treatments for several diseases. Chances are that you will not get compensated for the treatment for those diseases if you have to undergo them. You cannot choose covers specifically for a health condition as you never know if you would need treatment for something else in the future.
4. No Claim Bonus or Cumulative Bonus
No Claim Bonus (NCB) is an important feature of insurance policies. If you do not file a claim after the first year of an ongoing policy, you get a certain percentage of increase on your sum insured. This percentage goes on to increase up to a certain limit for any subsequent non-filing of claims in the coming years. This is beneficial as you get covered by a higher sum insured without paying extra for the premium.
Some low-cost insurance plans may not provide this bonus. For other plans in this low-cost category, the bonus percentage may be limited. In both cases, you lose on the benefits of a higher sum insured.
5. Absence of family floaters
Certain low-cost health insurances do not have the advantage of a group mediclaim policy. This means that you will not be able to include your family members such as your parents, spouse and children under a single policy. Taking individual policies for every member of a family is full of hassles as it involves multiple paper works and claim procedures. Also, the members would come under different age categories with specific health risks.
6. Limited coverage for medical expenses
There is a range of medical expenses in the treatment process of a patient. These include transportation costs, daycare expenses, pre and post hospitalisation fees, expenses for several medicines and related products and cost of tests. Many low-cost health policies do not cover these expenses, resulting in additional payments if you avail of these services.
7. Inadequate co-payment
Co-payment refers to the expenses that you have to bear even if you are insured. Generally, it includes up-gradation to a more expensive hospital for treatment and availing of benefits that are not included in your policy. Mostly, low-cost health plans allocate a greater percentage towards co-payment. This can result in paying up for most of the hospitalisation or treatment costs from your pocket, without much benefit from your health insurance.
8. Option for lifetime renewal
A lifetime renewability option is not available for most low-priced health plans. Once they expire, you will have to look for new plans either from the same insurer or other insurance providers. In the process, you will have to spend a substantial amount of time and money purchasing new policies. Also, the requirement of health insurance policies increases as you grow older along with an increase in premium amounts.
Before purchasing a health insurance policy, you should look at the features and benefits of the policy. A low-cost policy can be easy on the pocket but you will end up spending a lot of money during an emergency because these policies may not provide all the required coverages. So, be smart in choosing the right health insurance policy for yourself and your family.