9 Questions to Ask Before Buying your First Health Insurance Plan

A health insurance cover can in many situations be an extended financial lifeline as it covers you for expensive treatments which are mostly the result of unforeseen circumstances.

Unfortunately, in India, people often fail to appreciate this. To most, it is merely a tool for saving tax, and nothing more.

However, they often end up missing the opportunity to get affordable health insurance for family.

Interestingly enough, health insurance's meaning is not the only issue that confuses people. Yet, many people go in for health insurance without being totally clear on what they are signing up for. To help you out in this regard, below is a list of common questions asked by prospective policy buyers and even existing policyholders to their health insurance providers:

I want to buy health insurance but can my premium increase as time goes by?

When you buy health insurance, assuming you are of sound health, your premium is usually fixed according to the age bracket you belong to. As you get older though and you move into the next age bracket, your premium increases too. However, as long as you are in the same age bracket, your premium stays the same.

Hence, the younger you are when buying health insurance, the better. Since younger people are more healthy, it's easier for them to buy affordable health insurance. If you are already middle-aged, you are likely to have developed age-related diseases which can result in a higher health insurance premium.

Note: If you are looking for health insurance for family and your application is rejected because of pre-existing diseases that have developed because of your age, you will also end up denying affordable health insurance cover for your loved ones.

What happens if I have a pre-existing disease?

The terms and conditions laid down about pre-existing diseases vary with health insurance companies. However, when they accept this condition, there usually is a certain "waiting period applicable" (of 36 months usually) before the coverage comes into play. Hence, before buying a policy, do ask your insurer about it.

Tip: When looking to buy affordable health insurance, you will come across a term called ICR – Incurred Claims Ratio – which is the total value of all claims in a certain period paid by the insurer divided by the total premium it collects in the same period. A high ICR indicates a higher willingness to accept new customers, including people with pre-existing illnesses.

What is a 'Network Hospital'?

Health insurance companies typically tie-up with hospitals across the country for cashless treatment (i.e. when a policyholder's treatment cost is borne by the insurer directly). This is a key element in getting affordable health insurance as it amounts to no out-of-pocket expense. For example, the Niva Bupa hospital network boasts of over 4,500 top hospitals across India. Thus, if you are admitted in any of the hospitals on your insurer's list, you are eligible for cashless treatment.

What is a TPA?

TPA is an acronym for "third-party administrator" – an organisation (or individual) whose job is to process insurance claims. They also provide other services such as underwriting and customer services. So, when you make a claim, you will basically be dealing with the TPA.

However, some providers such as Niva Bupa offer direct claim settlement with no TPA!

What happens if I go to a hospital outside the network?

In such a case, you cannot avail the cashless facility and will have to bear the expenses yourself. However, there is a procedure for this which will allow you to get reimbursement for the covered costs. You will have to produce bills of all the expenses for which you seek reimbursement (sundry hospital charges, doctors' fee receipts, medicine bills, ambulance receipt etc.) and your insurer will accordingly reimburse you depending on your coverage.

Tip: Don't throw away any bill, and ask upfront about exclusions when buying the policy ("exclusions" refer to all that is not covered by the plan).

Will my health insurance also be valid outside my state and India?

In general, your health insurance policy (bought from an Indian insurer) is valid anywhere across India.

At the same time, , given the increasing number of Indians visiting other countries, some insurers have introduced health insurance plans for treatment outside India as well Niva Bupa Health Premia Plan comes with an inbuilt travel insurance and many other benefits that can be availed internationally.

You can visit health premia family floater health insurance plan to know more about this.

Are bills the only documents needed for making claims?

While the bills are a must, you will need a few more documents to file a claim successfully. For example- you will have to submit the ID proof of the insured and details of the health card issued by the insurance company. Additionally, if you are claiming cashless treatment, you will need to submit a pre-authorisation form to the TPA. After that, the insurer will inform you if they require additional documents or not.

How do I find out my insurer's track record in settling claims?

The Claim Settlement Ratio (CSR) is the ratio of claims that the insurance company pays or settles to the total number of claims it has received. So, if your insurer's CSR reads 96%, it means 96 claims have been settled, and four have been rejected for every 100 claims. Claim settlement ratio is a parameter you should keep in mind while selecting your insurer.

Are pregnancies covered under health insurance?

Yes, many health insurance providers offer this option as an add-on with the main health insurance policy. The coverage includes expenses on both caesarean and normal delivery options. However, keep in mind that this benefit usually has a significant waiting period.

Lastly, keep in mind specifics that you may need based on your individual needs. After all, a health insurance policy is a one-time investment that shouldn't be rushed.