Want to buy health insurance? Avoid these mistakes!

Dr. Deepti Dwivedi

With the rising medical costs, health insurance is a chosen life cover for an individual. Choosing the right medical insurance plan is a daunting task. There are many things to consider before you select a health insurance plan, such as what amount of coverage you need and how much the premium will cost. It’s important to know specific key points before buying a health insurance policy. This article tries to bring out some of the common mistakes made when purchasing health insurance and so you can avoid them.

HAVING INSUFFICIENT COVERAGE

Having insufficient coverage is one of the most common mistakes made when buying a health insurance plan. It’s important to know what kind of coverage you require. Therefore it becomes easier for you to choose an insurance policy that covers your needs. Sometimes due to ignorance, people don’t take good care of their medical needs and tend to postpone or skip their visits to the doctor. It eventually leads to a more serious disease, and people tend to choose an insurance policy that covers such conditions. They realize that their medical insurance doesn’t cover diseases like cancer, heart attacks, etc. You must know what your health needs are before choosing an insurance policy to be tailored accordingly.

LACK OF TRANSPARENCY IN MEDICAL HISTORY 

Lack of transparency in medical history means not disclosing all the medical records to an insurance company. Keeping this information secret will work against you during the claim settlement process. For example, suppose you have a chronic illness like asthma or hypertension. In that case, you must disclose this to the insurance company so that your premium is much cheaper than it would be without revealing this information. Also, in case of an accident, if you cannot pay for your hospital bills, the insurance company might not cover your medical expenses.

MISSING OUT ON THE CO-PAY CLAUSE

The co-pay clause is a common term used by health insurance companies. This means that the insurer will pay only a fixed amount of money for a particular surgery or during hospitalization. After this period, your expenses come out of your pocket until 100% of the medical bills are paid off. Unfortunately, sometimes people miss this clause and claim a shortfall in subsequent years. This is usually seen when they have to pay their health insurance premium in installments over some time. Therefore, you must know the co-pay clause during your policy purchase so that you can plan your future accordingly.

RELYING SOLELY ON EMPLOYER HEALTH INSURANCE

If you have a health insurance plan from your employer, then that’s great. But it’s essential to buy an individual health insurance plan so that the family would be protected in case of any unforeseen circumstances. For example, when you are sick and bedridden because of a particular illness, your savings can’t support all of your medical expenses. Your health insurance plan should be able to help your medical expenses during such times.

OVERLOOKING POLICY TERMS

Sometimes during your haste to buy a health insurance policy, you overlook the policy language. Terms are the key factors of your health plan. Therefore you must know them clearly before choosing an insurance policy. You must know whether or not pre-existing conditions are covered under your policy. Some medical insurance plans don’t cover pre-existing conditions, which are existing illnesses at the inception of your health insurance policy. You must read your policy carefully before buying it.

NOT COMPARING THE PLANS TO SUIT YOUR NEED

Not comparing the plans to suit your needs is another mistake that people tend to make while choosing a health insurance plan. Different health insurance plans suit different needs. Most of the time, people choose an insurance policy depending upon their budget rather than what suits them best. While selecting an insurance policy, you should be able to compare the plans, your medical needs, and your premium cost at all the plans offered. It will help you choose the plan that suits your needs best.

BUYING HEALTH INSURANCE FOR TAX BENEFITS 

Tax benefits and health insurance are two separate things. Tax benefits can never be a replacement for an actual health insurance plan. During the process of filing your income tax, an insurance premium paid is added as a deduction. If you don’t have health insurance during such times (even if you claim that you do) and the Income Tax Officer finds out, they will not include it as a deduction in your income tax returns. Hence always buy an individual health insurance plan for yourself and your family members.

These are a few common mistakes that people tend to make while buying health insurance. Insurance is essential, and it’s good if you have one for yourself and your family members. Always read the terms under which you are taking a policy so that there will be no last-minute unpleasant surprises after purchasing the policy. Also, comparison shopping is an important step that you should consider before buying a health insurance plan. Make sure that you know the co-pay clause of your policy so that you don’t have to spend money out of your pocket in the future. In case of an illness, only a health insurance plan would take care of your medical expenses. You must know what your policy covers and what it doesn’t before purchasing.