Why the small print matters
Most people compare health policies on two numbers: the premium and the sum insured. Both matter, but they don't tell you how the policy behaves when you are in hospital. That depends on the conditions written into the policy wording.
None of these terms are good or bad on their own. A policy with a co-pay may cost less, for example. What matters is that you know what you are agreeing to, so there are no surprises at claim time.
Sum insured
This is the most the insurer will pay for covered treatment in a policy year. If you have a family floater, everyone on the policy shares the same amount. One large hospital stay can use up a big part of it for the rest of the year.
When thinking about the right amount, consider the hospitals you would actually use, the number of people covered, and their ages. Medical costs also tend to rise over time, so a figure that seems comfortable today may feel smaller in a few years.
Waiting periods
A waiting period is the time after you buy a policy during which certain things are not covered. There are usually a few different kinds:
- An initial waiting period of a few weeks for most illnesses, though accidents are often covered from day one.
- Waiting periods for specific conditions, such as certain surgeries, that apply for a set time.
- A waiting period for pre-existing diseases, conditions you already had when you bought the policy. This is often the longest.
- A maternity waiting period, if the policy covers maternity at all.
The exact lengths differ by policy. This is one reason it helps to buy health cover before you need it, rather than after a diagnosis.
Declaring your health honestly
When you apply, you will be asked about your health and medical history. Answer fully and honestly, even if it raises the premium or adds a waiting period. If a condition is not disclosed and it comes to light later, the insurer may reject a related claim. An honest declaration protects you.
Co-pay and deductibles
With a co-pay, you pay a fixed share of every eligible claim and the insurer pays the rest. Some policies apply a co-pay only to older members, or only at certain hospitals.
A deductible works differently. You pay a set amount first, and the policy pays only above that. Both can lower the premium, but both mean more of the bill is yours.
Room rent limits and sub-limits
Some policies cap the room charges they pay per day. A room rent limit can have a bigger effect than it seems. If you choose a room that costs more than the limit, many policies also reduce what they pay for other parts of the bill, such as doctor fees, in the same proportion.
Sub-limits work in a similar way for particular treatments or procedures. The policy may cover a treatment, but only up to a fixed amount.
Exclusions
Exclusions are things the policy does not cover at all. Common examples include cosmetic treatment and some non-medical items in a hospital bill, but every policy has its own list. Reading the exclusions section is one of the most useful ten minutes you can spend before buying.
Cashless and reimbursement claims
At a network hospital, you may be able to use cashless treatment, where the insurer settles eligible costs directly with the hospital. You still pay for anything the policy doesn't cover. At a hospital outside the network, you usually pay first and then submit the bills to claim the money back.
It is worth checking which hospitals near you are in the network before you need one.
No claim bonus and renewals
Many health policies reward claim-free years, for example by increasing your cover through a no claim bonus. Renewing on time matters too. If a policy lapses, you may lose the waiting periods you have already served and have to start again with a new policy.
A simple checklist before you buy
- How much is the sum insured, and is it shared across the family?
- What are the waiting periods, especially for existing conditions?
- Is there a co-pay, a deductible or a room rent limit?
- What are the main exclusions and sub-limits?
- Which hospitals near you offer cashless treatment?
- Have you declared every health condition honestly?
If any of these are unclear in a policy you are looking at, ask. A good policy is one you understand.
This guide is general information. Coverage, terms, waiting periods and exclusions vary by policy and insurer, so always read the policy wording. Insurance is the subject matter of solicitation.