Here's your checklist to read your health insurance policy

Many of us can find reading the fine print of our health insurance policies extremely frustrating. And even if we try, the length and perplexity of the documents scare us away from thoroughly understanding what we are signing up for.

But, as health insurance expert Bhakti Rasal says, it is crucial to check for coverage details, premiums, policy limits, claims process, and renewal/termination clauses in the policy. 

To begin with, one should look beyond the policy’s brochure and delve into the policy’s information sheet and wordings. These are available on the insurer’s website as well. A good starting point is to read the key definition section, which explains all the terms used in the document. You can find it in the beginning of the document 

As Rasal puts it, coverage details are where the heart of your policy lies. So, pay close attention to it. Check for the waiting period, since you won’t be covered by your insurer right away. There are 3 types of waiting periods:

A standard, 30-day period. Except for claims related to a road accident, you cannot lay claims regarding any illness/diseases during this period.

Waiting period for pre-existing diseases. Say you have been suffering from diabetes since before buying the policy. So, any claims related to diabetes will be honored by your insurer only after a certain time has passed in the policy tenure.

Waiting period for specific diseases/procedures. Most insurers demand a waiting period for specific medical procedures. For instance, some policies come with a 3-year waiting period for joint replacement surgery. All insurers specify the waiting period and the specific diseases they will begin covering only after this period has lapsed.

Remember that during these periods, your policy should be continuous i.e. should not lapse or be terminated. Generally, if your pre-existing disease overlaps with the mentioned specified disease, the longer waiting period between the two will apply. 

Next, check what are the inclusions and exclusions offered by your policy. Inclusions lay down all medical services and treatments covered by your policy. Some common exclusions include injuries sustained during adventure sports, cosmetic, weight-loss surgeries, unproven treatment methods and more. 

Don’t ignore the sub-limits

Note the maximum amount the insurance company is liable to pay for a particular service or treatment under the policy. This is important because, if ignored, these limits can empty your pockets. Pay close attention to all sub-limits, which will differ for every insurer. These are generally applicable on room rent, ambulance cover, pre/post hospitalization expenses. 

For instance, take the SBI General’s health insurance policy. Under this, the insurer’s liability towards cataract treatment is limited to 15 % of the sum insured or a maximum of Rs 25,000 per eye. It also restricts pre/post hospitalization expenses to a maximum of 10% of whatever the eligible hospitalization expenses are. 

Also check the frequency of premium payment i.e. whether it needs to be paid annually, monthly, etc. Also check for provisions for a no-claim bonus, due dates and consequences of defaulting on premium payment. 

Additionally, take special note of whether or not your policy has a copayment clause. Co-payment means that the insurer only agrees to pay some percentage of the total  cost incurred, and not the entire amount. For example, if your policy has a 20% co-payment clause and you make a claim of Rs 10,00,000, the maximum amount your insurer will pay will be Rs 8,00,000. The remaining Rs 2,00,000 will go from your pocket. 

Be well acquainted with all processes

Check for the procedure, documentation and timeline that is to be followed while filing a claim. Understanding this will help you navigate through it smoothly and ensure you receive the benefits you are entitled to.

In case you want to cancel your policy, check the timeline and the premium you will be refunded. In most cases, no amount is refunded in case you do not intimate the company within 180 days. You can get back up to 50% of your premium if you inform the insurer within 3 months of policy’s inception. Also note the duration of the free-look period. If you decide to cancel the policy within this period, you can get back the  entire premium amount. 

In addition to all this, financial planner Nema Chaya Buch offers a non-exhaustive list you can tick off while reading your document:

1. Type of health insurance (whether individual, family floater, employer, Mediclaim, critical illness, accident, senior citizen etc)
2. Network hospitals and provisions for cashless facilities. 
3. Are treatment for covid or mental health issues covered? 
4. What are different riders/top-ups and super top-ups available? 
5. what is the deductible amount 
6. When one of the family members passes away in family health insurance, what changes are brought to the policy?
7. Tax benefits available for paying premiums