Health Insurance 101: Essential tips for first-time buyers in Kerala

Buying health insurance for the first time can be overwhelming, especially if you need to become more familiar with insurance terminology and policies. However, having an adequate health insurance plan is crucial to protect yourself and your family from medical emergencies and expenses. This blog post provides first-time health insurance buyers in Kerala with essential tips for choosing the right plan.

Understanding Health Insurance
Health insurance plans help cover medical and hospitalisation expenses in case of illnesses or injuries. Insurance means that instead of paying the entire bill out of your pocket, your insurer covers some or all of these expenses up to a certain limit based on your policy.

Essential Tips for First-Time Buyers in Kerala
1. Choosing Between Individual or Family-Floater Plans
If you are single, buying an individual health insurance plan with adequate coverage is advisable. However, considering a family floater plan makes more sense if you have dependents like parents, spouses, or children. Any or all members named in the policy can utilise the total sum insured. This significantly reduces the premium amount compared to buying separate individual covers for each member.

2. Determining the Sum Insured
The sum insured is the maximum amount the insurer will pay for annual medical bills and hospitalisation expenses. In Kerala, a sum insured of ₹3-5 lakhs is considered adequate for an individual policy. For a family floater plan covering 2 adults and 2 kids, ₹10-15 lakhs is advisable. The exact amount you choose should be based on factors like your income, family lifestyle diseases, hospitalisation trends in your locality, etc. Don't opt for very low sums just to reduce premiums, as this can lead to a lack of sufficient coverage when you actually need to claim.

3. Scope of Coverage
Analyse what is covered in the policy versus exclusions. See if it covers daycare procedures, pre- and post-hospitalisation, OPD, tests, unlimited doctor consultations, etc. Or are there sub-limits on room rents, ICU charges, etc? Reading the fine print is essential before buying any health insurance in Kerala. Some add-ons, like critical illness cover, are worthwhile, too, if they're within your affordability range. This provides a lump sum payout on diagnosis of listed critical illnesses for better financial preparedness.

4. Availability of Cashless Treatment
One of the top priorities for first-time health insurance buyers in Kerala is checking if their preferred hospitals have cashless arrangements with the insurer they are planning to buy from. You wouldn't want payment hassles adding to your stress levels when hospitalised. So, choose an insurer with tie-ups with top hospitals in your city so that you can walk in using your health card without payment worries during emergencies or planned treatments.

5. Pre-Existing Condition Waiting Period
Almost all health policies have an initial waiting period before pre-existing diseases are covered to avoid misuse. This period can range from 1 to 3 years, depending on the type of ailment. Discuss your medical history transparently with your insurer and understand if a shorter 1 or 2-year waiting period can be offered in applicable cases based on their guidelines. Even after the waiting period ends, hospitalisation due to complications arising from a pre-existing condition may have some limitations or sub-limits. So it's best to declare everything up front.

6. Room Rent Limits
Most health plans limit room rent to a certain percentage of the sum insured, say 1% or 2%. So, someone with a ₹5 lakh sum insured may be allowed a room with a capped rent of ₹5000-10000 per day. Opting for higher room categories leads to a higher medical bill. Compare this aspect across plans and choose one offering suitable limits to avoid large out-of-pocket expenses later. Also, check if taxes or other surcharges are within the room rent limit or over and above it.

7. Understanding Deductibles and Co-Payments
Some insurers include deductibles, meaning you pay either a lump sum or a percentage of the claim amount through co-payments. This helps lower premiums. While these options make sense for working professionals who have some savings, avoid health plans with deductibles or co-pays if you are seeking cover for elderly parents or if you have limited income sources. Many find it challenging to pay large lump sums or even 10%-20% co-payments on large hospital bills. In such cases, opting for policies with zero deductibles is advisable.

8. Policy Exclusions
Apart from pre-existing disease waiting periods, every health insurance product comes with general exclusions like claims due to substance abuse, adventure sports injuries, experimental treatments abroad, and cosmetic surgery(not medically necessary), among others. It is vital to read through the detailed exclusion list to avoid nasty surprises later. Look for any exclusions you may not be comfortable with and choose plans accordingly.

The Bottom Line
With so many insurance providers in Kerala's market, selecting one with solid credentials and robust processes is vital. An insurer known for smooth customer service and ethics like ACKO will ensure you have the least hassles later. Don't blindly opt for newly launched companies offering heavy discounts unless their track record and service standards seem reliable.