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NEW DELHI: Having a health insurance policy is a must amid rising cost of medical care, but before purchasing insurance, it is imperative to understand the restrictions that may apply and vary from policy to policy. These are:

Waiting period: When you buy a health insurance policy, your coverage doesn’t start immediately. This restriction protects insurers from misuse of such policies to cover pre-existing ailments and pre-anticipated immediate medical costs. However, even during this period, medical expenses due to accidents are covered. Coverage against most other illnesses largely starts after a waiting period of 30 days. Moreover, coverage of some pre-existing ailments, like diabetes, hypertension or heart diseases, can come with a waiting period of up to three years, depending on policy chosen.

Sub-limits: A restriction that often catches policyholders unawares is the sub-limits clause in their policies. A sub-limit clause in health insurance caps benefits for specified conditions. For instance, while your sum insured as per the policy could be 5 lakh, there may be a sub-limit on the room rent in case of hospitalisation, say 1% of the sum assured. In such a case, your entire sum assured would not be available to cover the room rental cost, and you may only be able to choose a shared room instead of a private one, lest you pay the difference from your pocket. Similarly, the cap could be for other expenses, like ambulance charges, doctor fees, etc. It is better to choose a policy that covers all benefits up to the sum assured, and many policies come with this benefit.

Co-payment: Many insurance policies come with a co-payment clause to offer cheaper premiums to the policyholders. In such a case, policyholders pay a portion of the medical bill while making a claim. “Co-pay is that part of the bill that the policyholder has to bear as an out-of-pocket expense. While this brings the premium down, making the policy affordable puts an additional burden while making a claim. For instance, if a policy has a 20 per cent co-pay clause, and the total cost of medical treatment comes to 2 lakh, then the insured will have to pay 40,000 while the insurer will pay the balance of 1.6 lakh. While this may work for some policyholders, especially senior citizens whose premium is too high, it may not work for others. It is often better to go for a policy without a co-pay clause if one can afford it," said Amit Chhabra, Business Head- Health & Travel Insurance, Policybazaar.com.

Network hospitals: Every health insurer has a tie-up with specific hospitals in multiple locations in the country, which they prefer over other hospitals when settling claims. These insurers also like and advise policyholders to choose one of these hospitals for their treatment for a hassle-free claim process. These hospitals are called network hospitals, and every insurer publishes an entire list of network hospitals where one can avail of medical treatment.

While one can also avail of treatment in a non-network hospital, the claim process in such cases will not be as smooth. Moreover, one can also opt for cashless claim settlement in the network hospitals where the insurer would directly pay the medical bill. However, such a facility is unavailable in a non-network hospital where the policyholder must make the entire payment from their pocket first and then file a claim with the insurer for reimbursement. It is always better and wiser to get medical treatment in a network hospital, especially in the case of a pre-planned hospitalisation. A non-network hospital should be considered an option only in unavoidable emergencies.

Filling up the incorrect information: Wrong information in the proposal form or a slight deviation in detail regarding existing health problems or other insurance plans can result in the insurance company refraining from paying your hospital expenses. The reason is that the insurer risks paying your medical bills when you buy a policy.

Priya Deshmukh-Gilbile, chief operating officer at ManipalCigna Health Insurance, said, “The relationship between the insurer and the insurer is built on the principles of honesty and transparency, thus, necessitating the insured to share every necessary detail unbiased of how trivial it may seem. This prevents unwarranted chaos stemming from the cancellation of the policy or rejection of claims made. Ensure that your name and details in the policy match those mentioned in the KYC documents, including Aadhar Card, Pan Card, etc." She said, “If you get coverage under a corporate health insurance scheme, chances are that your employer or HR team members may add your name improperly or miss out on adding your family members. Be careful about details today to prevent unforeseen grievances later. To avoid confusion during billing, the insured must also check that the doctor in hospital bills accurately mentions their details."

Mint take: Knowing these key restrictions, you can make a wise choice when opting for health insurance, ensuring you are not caught unawares even after investing in health coverage. To sum it up, choose a policy with a shorter waiting period, avoid sub-limits and co-payment clauses and make sure your preferred hospital is on the list of network hospitals of the insurer you choose.

ABOUT THE AUTHOR
Navneet Dubey
Navneet Dubey is a personal finance writer and artist. Over the past decade, he has written feature stories on insurance, financial planning, lending and borrowing.
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