Buy medical insurance and get tranquility. It is not only the ads of the insurers who tell this, but also to the people who dispense financial advice. Young people looking to start their investment trip are often urged to buy a health coverage first, before considering any other investment.
Medical emergencies can happen to anyone. Therefore, the need for financial protection against them is undeniable. But given the way in which health insurance works in India, you must know that buying a health insurance coverage does not guarantee tranquility. You may have to have an support plan to deal with expenses that are not covered by the insurer. Here are some truths at home about health insurance that buyers for the first time should take into account.
Bigger is not better
When you seek to buy health coverage, insurance agents and companies like to speak in terms of worse scenarios. Did you know that the incidence of non-alcoholic fat liver disease (NAFLD) is shooting and that a liver transplant can delay it in ₹ 20-25 Lakh? Did you know that cancer treatment can cost ₹ 3-10 Lakh for surgery, ₹ 5-20 Lakh for radiotherapy and others ₹ 5 Lakh for immunotherapy?
Such dichosides convince you that the more the sum will assure you, the more ‘protected’ you are. Buyers for the first time of XXL registration cover that thinking that in case of a medical emergency, having ₹ 50 Lakh or ₹ 1 crore paid for them would be much more comfortable than payments or ₹ 10 Lakh or ₹ 20 Lakh.
But this is not how health insurance works. Health insurance policies are compensation policies (there are other types, such as critical disease policies, but are rare). They only reimburse the real costs incurred in hospitalization. If it is hospitalized for surgery that costs ₹ 2 Lakh, the insurer will reimburse only ₹ 2 Lakh, assuming that it can produce hospital invoices for the full sum. If its insured sum is ₹ 5 Lakh or ₹ 1 crore won the matter. The probability of obtaining your claim does not increase with the high sum insured. The data of the annual report of the IRDAI insurance regulator tell us that the average size of the claim paid by health insurers was only ₹ 31,154 in the fiscal year24.
The insured sum serves mainly as the upper limit in all its claims in a year. Therefore, extra large covers are useful only if you expect hospitalization for an important disease or hopes to be hospitalized several times a year.
If you are subject to diseases that require that you often visit a doctor, rates will not be covered by your health insurance. If you have chronic ailments such as diabetes, hyper-tempition or hypothyroidism, which require that you are taking medications for a lifetime, those costs will not be with the insurer. If you have health conditions that require outpatient treatment without hospitalization, the thesis won is not covered either.
Claims paid by the insurer are also subject to other warnings. If you are hospitalized for a condition derived from a pre -existing disease and your policy is in your waiting period, the insurer will not pay the invoice. There may be other exclusions hidden in fine impression. In cancer treatment, for example, the cost of chemotherapy without hospital admission may not be reimbursed. Treatments such as voice and immunotherapy therapy can also be excluded by the terms of politics.
This argues to take an insured sum that can reasonably cover probable hospitalizations in a year.
Rarely has no cash
A second common fallacy about health insurance is that it allows you to take advantage of the treatment or “without effective”. If you are hospitalized for an emergency or health treatment, you do not need to break your fixed deposits, it redeem your mutual funds or submerge your savings to meet its doors, you are told. The “Insurer’s” cover “will take care of it.
In real life, medical treatments are rarely “without effective.” Only in the case of planned and hospitalization surgeries, the insurer usually reimburses only part of her invoice. You end up disbursing the soaking of your pocket. Insurers generally do not reimburse the cost of consumables (such as gloves, PPE kits, etc.) and rates and costs that exceed what they consider reasonable for a treatment. When your policy has a limit on room rental, all the other exenses that claims on the invoice can be prorated (adjust for this proportion) and pay only partly.
All this makes the partial payment of claims quite common. In the fiscal year24, insurers resolved around 71 percent of the claims filed in terms of value, which shows that 29 percent of the invoice value was out of the insured’s pocket.
It is impossible to know in advance how much of the final invoice the insurer will be resolved and how much he must get out of his pocket. The data of the Annual Insurance Regulator report shows that in fiscal year24, only 66 percent of health insurance claims were settled without cash. Therefore, you must keep emergency funds, even if you have health coverage.
Premiums are not fixed
When it comes to choosing investment options, it is drilled in our heads that we must pay close attention to costs. Therefore, many buyers for the first time choose their health insurance depending on the premiums cited by the insurer. However, in insurance, cheaper is often not the best.
When sacrificing a health policy, the insurance company is charging a premium for the risk it represents in terms of presentation of claims. Insurers who set their policies too cheap can plan to hide to pay their bills later. It is quite choosing insurers based on the coverage offered, exclusions and recipient liquidation records instead of cheap premiums.
The initial premium cited by the insurer can be increased in the policy broadcasting stage, depending on the medical conditions that deactivates.
You must also keep in mind that the premium to which you have a Leg health coverage will not be the premium that pays for a lifetime. While Indian health insurers have the mandate to renew policies once issued provided that buyers wish, the insurer is free to increase premium payments in each renewal. It must budge the fact that the premium that initially enrolled can intensify 10-50 percent in the renewal. Insurers are prohibited hiking premiums based on individual claims records. But premiums can increase depending on age thresholds or other risk factors that apply to a complete customs cohort.
Therefore, if you are a young winner, buy a health insurance policy. But do not stretch your budget for extra large coverage if you have a good medical history. Do not jump to have an emergency fund, which can take advantage of the short term, just because it has a health insurance policy.
Posted on April 26, 2025