Looking To Buy Health Insurance? Here's What You Should Check

Buying the right health insurance policy can be a tricky affair and relying on just agents can lead to absolute misery in trying times. Cases of mis-selling are rampant and it does not hurt to be alert and cautious.

Checking certain key terms and inclusions under one's health policy is therefore the key to protection in the time of adversity, to avoid claim rejections and partial reimbursement. It is also important to remember that lesser premiums, when compared to peer policies, could come with attached conditions.

• Exclusions under the policy: This could include pre-existing diseases that may not be covered, specific diseases not covered and certain medical procedure exclusions under the policy.

• Co-pay provision in the policy: Policies may have lower premiums under co-pay clauses. This clause typically means that in case of admission to the hospital, the insurance company is liable to reimburse only the percentage of the overall expenditure that is agreed upon in the policy. The rest will have to be borne by the policyholder.

• Deductibles clause in the policy: A deductible is pre-fixed amount of money that a customer has to bear, either out of pocket or from another health policy, for covered services before the insurance policy pays.

• Sub-limits clause: This refers to a monetary cap on medical insurance claim for certain covers. Policies may have sub-limits prescribed in the form of a fixed value for particular illnesses, treatments, or these could be included as a percentage of the total sum insured— amount of insurance cover— under the policy.

• Expenses towards non-medical items: Non-medical items are not covered by health insurance plans. The Insurance Regulatory and Development Authority of India has allowed insurance providers to exclude them. These items could be expenses incurred during the patient's treatment and procedures, such as admission/registration charges, spirit, disinfectant, containers, disposable blades, razors, bandages, cotton, etc. and non-medical expenses in room charges like hand wash, housekeeping charges, tissue paper, comb, pulse oximeter etc.

• Room-rent caps: Certain policies have room rate caps prescribed. If the hospital room charges exceed the prescribed limits, the additional charges will have to be borne by the policyholder or his/her kin.

• Total coverage limit: Lastly, the most basic and important point; it is important to see the total coverage limit under the policy and gauge the adequacy sufficiently, before buying the insurance policy.

A close review of the above will enable one to be sure of the type of the policy to opt for and the expected claim covered under the policy, along with the attached conditions.

Here is a peek at the claim rejection percentages of some of India's top private players selling health insurance covers.

Claim adjustment ratio refers to non-inclusions under the health policy, which refers to claim amounts that are not eligible, such as co-pay, deductibles, non-medical items, amount claimed in excess of policy sub-limits, higher room rates claimed than allowed under the policy.

As per Emkay Global Financial Services Ltd.'s recent report, Star Health and Allied Insurance Co. has the highest combined claims repudiation and adjustments ratio at around 45%, higher than that of peers, which stands at around 30-35%.

"However, this has to be viewed in the context of a considerably high share of retail (~94% of premiums), versus the retail share in the health premium mix at ~22-75% for peers," the report said.

According to data, HDFC Ergo General Insurance Co. seems to have the best claim settlement ratio.