Before you buy your policy...

     You know you need health insurance, and by now you even know what’s available in the market. You’ve even calculated exactly how much premium you can afford to pay. And so, chequebook in hand, you decide to just go out and buy the most promising health insurance that’s advertised.

But before you sign on the dotted line, remember that what looks too good to be true quite possibly is. And tell yourself more than once that insurance companies are not in the business of philanthropy. They are not going to pay your medical bills simply because you pay them a hefty premium but forget to read the coverage and exclusions.

Insurance is a business like any other, and you are a customer. And as a customer, your motto always should be caveat emptor—let the buyer beware. Yes, there are redressal mechanisms available and the courts are always ready to hear one more case against an insurance company.

But a little care before you buy, plus some homework, can save you a lot of trouble after. While we cannot anticipate every problem that’s likely to crop up, we have here a list of some of those you are most likely to come across

C Chandra Shekhar, chief marketing office, Apollo DKV “Health conditions do not always come with prior information. So look for an insurer who offers cashless service at a wide number of locations”

Click to choose One benefit of buying or searching for a health insurance policy online is the absence of an overexcited agent. The consumer also has time to compare health insurance companies and policies. Below is a list of some websites: • www.healthinsuranceindia.org The website, created by Suresh K. Sethi, CEO, RIA Insurance Brokers compares premiums offered by different companies for various age groups. The site has a lot of information on the subject and the way the industry, especially health insurance, works. • www.insurancemall.in A venture of Bonsai Insurance Broking, the website, apart from allowing comparison of products, allows one to seek tailored products. • www.insurancepandit.com The website is the online venture of A&M insurance brokers, and they represent the 11 big health insurers and offer their products online. One can search for individual plans, family floaters and also critical illness through this site. • www.getmeinsure.com This web initiative of Peacock Financial Advisors, a Pune-based financial advisory, offers solutions across insurance products. One can search for quotes on health insurance through this site. • www.click2insure.in Promoted by Optima insurance brokers, the site offers comparison across insurance schemes and promises to get you the best rates. Though the site is still in its beta version, it has a wide network across the country.

Medical test: Most private medical covers are underwritten based on the applicant’s age, height, weight and medical history. “With age, medical complications set in. To ascertain the health status of an individual, it is important to base a judgement on a health report,” says C Chandra Shekhar, chief marketing office, Apollo DKV.

For instance, a pre-existing condition as common as asthma could be enough for an insurer to hike your premium, while a history of anxiety or depression might cause an underwriter to think twice before offering you a cover. And if you have a family history of heart disease, cancer or diabetes, you could be out of luck entirely or find the cost prohibitive. This leads to a situation where a plan could either be too expensive or include a clause that excludes the very ailment for which you need coverage.

If you suspect that you are likely to fail the medical test but still need insurance, may we suggest that you go under the radar? If it’s possible, opt to join a group insurance scheme offered by your employer. You won’t need to prove the state of your health there, and even better, group plans are mandated to cover all members at the same price. However, if you find that you still need more health cover, you will have to be prepared to take the medical test—and pay a higher premium if you are found to be in a risky category.

Pricey premiums: For what it’s worth, health insurance still is regulated in some fashion. For instance, an insurer cannot deny you a policy because of your age or health status. But what can be (and sadly is) done is to make taking the policy completely unviable by pushing the premium up and by hedging it with exclusions. “I may not offer a baseline rack-rate if a customer walks in with a health condition that is an obvious risk. I will instead charge him an additional premium to bear that additional risk,” says V Jagannathan, MD, Star Health and Allied Insurance.

This is one of the reasons why premiums tend to be more reasonable for young people and get more expensive as you age. We repeat, insurance companies are not in the business of philanthropy; they want to make a profit. And if that profit comes out of charging you a steep premium, the company is not going to balk. It’s up to you to see if you can shop around for a company that offers you a reasonable premium.

These days, insurers are willing to review premiums at the end of each policy year in cases of loading. Says Apollo’s Shekhar: “We have built in a wellness programme into our policies. In this, a policyholder with not-so-good health is offered incentives to participate and stick to the wellness programme. This way, we review the health condition end of each year to review the change in health condition. If there is an improvement, we promise to reduce the rate.”

Remember to renew: Though health insurance is something that you would ideally want to have for the long term, the current regulatory mechanism does not permit health insurance to be sold for beyond a two-year period. “Life insurers offer long-term health contracts, but they are different in structure,” says Jagannathan.

The annual contracted policy should be renewed each year to get a no-claim bonus or loyalty bonus in the form of a discount. it also helps in establishing a medical history with an insurer. once the insurance company begins to see you as a good risk, you can even get cover for pre-existing diseases some years down the line. “most insurers cover pre-existing diseases from year four or five of a policy,” says s k sethi, ceo, ria insurance brokers.

Check the coverage: The geographical reach is another important factor that you should consider before you choose a health plan. You could, for instance, fall ill when you’re travelling. “Health conditions do not always come with prior information. That’s why you should look for an insurer who offers cashless service at a wide number of locations,” says Shekhar. With third party administrators ruling the roost when it comes to claims, it is good to look at the network that these intermediaries are able to maintain and offer.

Finally, make sure you read the smallest detail, no matter how tedious it is, and make sure you're getting adequate coverage. For instance, a basic healthcare plan should cover you for sudden illness, rather than make you pay thousands in hospitals bills. Ask to see the exclusions in the policy and don’t be afraid to ask questions. After all, it’s your health at stake. Once you’re fully satisfied that the policy will cover you sufficiently, go ahead and buy.

Buyer’s options With so many variants of health-related insurance policies available, it is pertinent you know the various buying channels that are accessible to you. Depending on where you live, these are the possible ways to buy health insurance. • From the insurers.You can buy health insurance directly through an insurer by calling them, mailing them and requesting for a premium quote or walking into a branch office. • Agent.That insurance is most widely sold through agents holds good for health insurance as well. • Banks.Through your bank or credit card issuer you can avail health insurance if it is being offered. • Your employer.you can be part of a group insurance scheme floated by your employer and take a policy from them. • Use a broker.Unlike life insurance where a broker can sell policies of one company, health insurance brokers have tie-ups with multiple insurers and can offer a range of policies. • Websites.There are online brokers and aggregators who let you compare prices across insurers and leave the selection to you (read Click to Choose).

Reading the fine print There is a thin line between having a cover and assuming to be covered for an eventuality. Fine print spells out what you get and what you don't and is a must read the moment you take a health insurance plan. Remember that there is no use of a policy, if the company can wriggle out of its obligations because of clauses, which are already there in your policy, but you have not noticed them. Here are a few common ‘escape routes’, formally known as exclusions in most health insurance policies. NO CLAIMS ON PRE-EXISTING DISEASES—diseases that were in existence before the policy commencement, are not covered, even if you were unaware of their existence. Some companies now relax this requirement by reimbursing the treatment of such diseases after a period of four years of the policy. COOL OFF PERIOD—any medical expense incurred for the treatment of any health related instance occurring within 30 days of the policy coming into force (except through bodily injury due to accident). Also, in case some cases, such as in cataract surgery, there are sub-limits on reimbursement even after the exclusion period has passed. SEE NO EYE—expenses for laser treatment of eyesight; cost of spectacles or contact lenses are not covered. NO TEETHING PROBLEMS—expenses incurred on dental treatment or cosmetic surgery to get the smile right are excluded NO WAR—injuries due to wars, invasions or any claim directly or indirectly caused or contributed by nuclear weapons. HERBAL UNWELCOME—treatment through non-allopathic methods is not paid for.

Remember, you can’t enjoy 5-star facility just because you have a health insurance plan. Insurers restrict certain discretionary costs associated with hospitalisation by introducing certain sub-limits for reimbursement. Some of these are: Room rent: 1.5% of the sum insured per day. If your insurance cover is Rs 2 lakh, room rent will be capped at Rs 3,000 per day ICU charges: 3% of the sum insured per day Doctors’ Fees: 40% of the sum insured