Avoid these health insurance mistakes that could disrupt your financial plans
Do you conduct thorough research before purchasing a health insurance policy? Do you read the fine print? Well, most of us don’t. This mistake of not reading all the terms and conditions carefully can be the reason for claim rejection or other issues. Paying from your pocket can put a burden on your finances, and your financial plans can go for a toss. So, how do you avoid this? In this blog, we have talked about the common health insurance mistakes that people make that can jeopardise their financial plans.
Introduction
A health insurance policy is a wise investment, protecting you financially against medical inflation. You pay the premium, and the insurer will take care of the hospitalisation expenses up to the sum insured. But will it cover all treatments? Will coverage start from day one of purchasing the policy? Do I need a high sum insured? These are some questions that we should be aware of to avoid making any mistakes when buying a health insurance plan.
Common health insurance mistakes that could disrupt financial plans
When you buy health insurance, one small mistake can lead to financial crisis. Here are some common health insurance mistakes that could disrupt your financial plans:
1. If your plan has insufficient sum insured
This is an important factor you must consider when buying health insurance. While deciding the sum insured, you must assess your healthcare needs and choose a plan with adequate coverage to meet the medical expenses. Opting for the bare minimum sum insured to save on the premium would translate to more out-of-pocket expenses, thereby disrupting your financial planning. Your sum insured should be based on rising medical inflation and future needs.
2. If you focus only on premium
Premium is a vital aspect, but it should not be the only one when selecting a plan. Most people make this mistake. Selecting an affordable health plan without assessing the coverage, benefits, network hospitals, or reputation of the company may help save on the premium at the time of purchase, but it can prove costly in the future. Remember, lower premiums will have limited coverage. So, avoid making decisions based only on the premium.
3. If you ignore the exclusions
Most of us only focus on the coverage, ignoring the list of exclusions. Understanding what is not covered in your individual or family health insurance plan is also important to avoid paying from your own pocket. For instance, most insurers don’t cover adventure sports like bungee jumping, skiing, or paragliding in a standard insurance plan.
4. If you don’t research enough
Thorough research of the different plans offered by different providers and comparing them will help you get better coverage. You may also miss out on the offers and discounts if you don’t make a comparison. You can take suggestions from friends or insurance agents but choose the one that aligns with your budget and needs.
5. If you don’t buy health insurance early
Many people feel buying health insurance at a young age is a waste of money because of the assumption that they will not fall sick. However, medical emergencies don’t look at age and if there’s an emergency, you will have to bear all the expenses yourself. This will seriously dent your savings. So, buying health insurance early will not only have lower premiums, but you can also complete the waiting periods for pre-existing diseases and specific ailments.
6. If you purchase health insurance only for tax benefits
Health insurance offers tax benefits, but it should not be the only reason for buying it. In doing so, you may end up buying a policy with insufficient coverage, leading to more out-of-pocket expenses.
7. If you hide your medical history
Hiding pre-existing conditions fearing higher premiums is another mistake that can derail your financial budget. It can backfire when the insurer finds out that you have not disclosed your medical history while filling out the proposal form. The insurer will not only reject the claims relating to the pre-existing condition but will also cancel the policy. Also, some insurers conduct a pre-medical check-up before approving the proposal, which means you cannot hide any information.
8. If you overlook waiting periods
Imagine you get admitted for hernia surgery and then find out that insurance will not cover the expenses because you haven’t completed the waiting period. Yes, you read it right. Pre-existing diseases and specific procedures have waiting periods, and any claims filed during this period will be denied. So, you have to be aware of the waiting periods and choose a policy with shorter waiting periods.
9. If you choose wrong add-ons
Add-ons or riders enhance the coverage of your health plan and you have to pay an additional premium. So, if you choose the wrong or unnecessary add-ons, it will increase your premium without adding any value to the coverage. For instance, if you are not planning for marriage, it doesn’t make sense to buy maternity rider.
10. If you think employer-provided insurance is enough
Employer-provided insurance or group health insurance is offered to employees of an organisation as long as they work with the organisation. Many people make the mistake of relying completely on group health insurance. Little do they realise that once they retire or change jobs, the coverage will cease to exist. During this time, having no coverage is a big risk because, in case of a medical emergency, you will have to pay everything from your pocket. So, having personal health insurance as a backup will ensure your financial planning is not disturbed and you will have uninterrupted coverage.
Conclusion
When choosing a health insurance policy, avoid common mistakes; otherwise, they can disrupt your financial plans. Stay informed and choose a policy wisely to get adequate coverage and much-needed financial security against rising medical expenses.
Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.