Buying the best individual health insurance requires some knowledge about health insurance companies and their plans. Most people have never been educated in Insurance.  No company will pay benefits not covered in a policy, and the commissioner of insurance will uphold the company’s decision to decline benefits that are not specifically covered.

Law suits against insurance companies are seldom won as companies are experts in making sure every detail of coverage is spelled out. Yet, the average client has never actually read an insurance policy from cover to cover.

The policy arrives in the mail and is shoved into a drawer or a file box and never actually read. Bear in mind that neglecting to read the policy does not make a company liable for things you didn’t understand.

That being said, you will avoid confusion and have greater peace of mind if you work with an agent who is willing to take the time to help you understand your policy. Don’t just assume your agent will do this.

Many will simply send the policy in the mail and leave you to figure it out. A truly good agent from a reputable company is worth working with even if the premium is a few dollars more. When you do select an agent, you should be sure to ask the following questions.

• How long do pre-existing conditions apply?

When you go from one group coverage plan to another, the pre-existing condition clause is waived. This is not true when going from group coverage to private coverage. Your new company may refuse to pay for a pre-existing condition for as long as two years. They may also look back over your entire life for that pre-existing condition. Thus, if you had cancer 15 years ago but are still taking some sort of preventive medication, you will have a waiting period even though you have been cancer free for 14 years.

• What are the exclusions? There will always be some as no company pays for everything. You need to know what they are.

• What are the anticipated rate increases?

Your agent may tell you that he doesn’t know as rates are approved by the commissioner on an annual basis. That much is true, but the company has charts showing what your premium would be today for any given age. They also know the average company increase rates over time. Don’t buy if they won’t provide you with that information.

• What is the lifetime maximum benefit?

• Can you reduce the premium by taking a higher deductible?

• How are co-payments determined?

• How do you get permission to go to the hospital?
  

• Are prescription drugs included? Is there a separate deductible? What is the copay?
• How are customer service issues handled? Can you get help from the agent?

Health insurance is not very expensive when compared to the cover it gives you.

Healthcare is increasingly expensive, with technological advances, new procedures and more effective medicines that have also driven up the costs of healthcare.

While these high treatment expenses may be beyond the reach of many, taking the security of health insurance is much more affordable.

The costs payable for a health insurance policy generally depends on various factors like the number of persons insured, their age group, the sum insured opted for, the cost sharing mechanisms like co-payments and deductibles in the policy, health status of the proposed insured persons, and the kind of coverage sought.

The costs thus start from a subsidized premium of Rs 100 under a Universal Health Insurance Scheme policy for a person below the poverty line, and could reach up to tens of thousands for high amounts of comprehensive coverage.

For illustration purposes, the data of the insurance regulator for 2007-08 indicates that the average premium per person was in the range of Rs 1143 per person during the year, which comprised of a mix of group individual policies with varying cover.

It is important to be an informed customer and do proper research on insurance companies and the health insurance products as there is so much variety and choice available.

Despite the variety available, there is no single policy which could fit all the needs of all individuals.

It is important to assess one’s needs from a health insurance cover and choose a cover, or covers, appropriately.

It is possible to combine different products for coverage appropriate to one’s needs.

Thus, for example, a hospitalization indemnity policy could be complemented with other insurance covers like a

• Critical illness benefit policy or
• A hospital daily cash benefit policy, which could be used to cover incidental costs not covered by hospitalization indemnity products, like excess room charges or the loss of income due to hospitalization, and
• Various other ‘non-medical’ expenses not reimbursed in health insurance plans.

Similarly, adding a personal accident cover helps maintain life style and also accommodate for additional cost of disability caused by accidental injuries.

For those already covered under a group insurance scheme by their employers, a high-deductible health insurance policy is a useful add-on which enhances coverage and provides continuity as an individual product.

When comparing policies, do not compare them just on the premium structure, but also on the details of the scope of coverage, waiting periods, exclusions, cost sharing provisions and other policy terms and conditions.

Cost sharing provisions

Health insurance policies also use cost-sharing provisions though the extent and amount of such cost sharing requirements varies between products and insurers.

The cost sharing provisions include sub-limits, which cap the maximum amount payable by the insurer for a particular procedure or cost component, as also co-payments, which are a cost-sharing requirement that provide that the insured will bear a specified percentage of the admissible costs.

Another cost sharing mechanism, a deductible provides that the insurer will not be liable for a specified rupee amount of the covered expenses, which will apply before any benefits are payable by the insurer

Always buy a health insurance policy when you are young

Buy a policy at a young age to avail richer benefits and do cover your entire family- all of them are exposed to the risk of medical costs. Make sure that you pay the premium regularly & renew your policy in time, as failure to do so may lead to loss of continuity benefits.

Fill the proposal form correctly and completely

It is important to fill the proposal form correctly and completely, including the questions on health status. Otherwise, any non-disclosure or incorrect disclosure may lead to the policy being rendered invalid or the claims on the policy being denied.

Insurers may also require a medical examination and lab tests before buying a policy, especially when the proposal form for a new health insurance policy indicates the need for the same and also where insurance is sought for the first time by a person above a certain age, say 45 or 50 years, though this varies from insurer to insurer.

It may also be required when the sum insured is sought to be raised at renewal time.

There are multiple channels available to purchase Health insurance.

• You can buy health insurance products either directly from the various channels offered by the insurance company, including online sales and telephone or
• Through IRDA licensed intermediaries like agents and brokers.

It is important to purchase health insurance only from authorized channels.