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.