Buying health insurance for yourself and your family is one of your most important decisions. Hence, it is essential to understand your health insurance coverage needs, the policy you will be buying, and its features and benefits. To ensure you choose the best policy for your family from the available options, you must consider some key factors while comparing health insurance plans. In this article, we will discuss some of these key factors.

Your health insurance requirements

The first step in buying health insurance is understanding your family's requirements. You need to evaluate the following:

a) The number of people you will include in the policy

b) The amount of insurance coverage that will be adequate

c) The overall and specific features that you want in the policy. For example, if someone in the family has diabetes, you will need to look for a policy that covers diabetes either from day 1 or the shortest possible waiting period.

d) The premium amount that you are willing to pay

Evaluating the insurance companies

Before you compare health insurance plans of various companies, you need to research the health insurance companies. You can evaluate the companies on the following parameters:

a) Network of hospitals: The bigger the hospital network of the health insurance company, the better. ManipalCigna Health Insurance has a wide network of 8500+ hospitals. Check whether the hospitals in your area are covered in the network. If you have a preference for any specific hospital, check whether it is covered in the network.

b) Claim settlement process and time taken: Check the time the insurance company takes to approve cashless treatment authorisation. The sooner the company approves, the better. Check the claim settlement process. It should be smooth, convenient, and easy to follow for anyone. Lastly, check the data for claims received and paid by the company annually and the time taken to pay the claim. You can get this information from the IRDAI Annual Report. For example, in 2021-22, ManipalCigna Health Insurance Company paid 99.90% of the claims within 3 months.

c) List of day care procedures: The higher the number of day care procedures covered by the insurance company, the better.

d) Solvency ratio: In simple terms, the solvency ratio indicates how good or bad the insurance company's financial strength is. It is an important indicator for assessing the ability of the insurance company to pay claims. The IRDAI mandates a minimum solvency ratio of 150%. You can check the solvency ratio of the insurance company from the IRDAI Annual Report. The higher the solvency ratio beyond 150%, the better.

e) Overall track record: You can check the overall track record of the insurance company with regards range of products offered, time taken to issue policy and service claims, resolving any queries related to policy servicing, etc. You can check the rating, reviews, etc., of the company.

Key factors to consider for comparing health insurance plans

You are clear about your health insurance requirements and have evaluated insurance companies. Now it is time to compare health insurance plans of various companies. You may consider the following key factors for comparing health insurance plans.

1) Waiting periods: Health insurance plans have various waiting periods like:

a) The initial waiting period of 30 days (except for hospitalisation due to accident)

b) Waiting period for treatment of specific diseases/procedures like cataract, varicose veins, kidney stones, piles, hernia, etc.

c) Waiting period of 24 to 48 months for pre-existing diseases

d) Waiting period of 9 to 48 months for maternity cover

e) The initial waiting period of 90 days for critical illness coverage and 30 days survival period post critical illness diagnosis

f) Waiting period for bariatric surgery, etc.

You should compare medical insurance policies of various companies for the above waiting periods. Some waiting periods are standard across policies. Some waiting periods like pre-existing diseases and maternity cover, may vary from policy to policy and within different variants of the same policy. The lower the waiting period, the better.

2) Restoration benefit

If a family member is hospitalised for a complicated surgery or for a prolonged period, a single hospitalisation event may exhaust the entire sum assured. In such a scenario, the entire family will be without health insurance coverage for the remainder of the year. But, if the policy has the restoration benefit, the entire sum assured will be restored within the same policy year.

You should look for policies that offer the restoration benefit. Some policies may offer the restoration benefit from the subsequent hospitalisation or for hospitalisation due to different illnesses, etc. Check the terms and conditions related to the restoration benefit.

3) Room rent limits

Many policies impose a limit on the daily room rent. The limit can be an absolute amount (for example, Rs. 5,000 per day) or a percentage of your sum assured (for example, a daily limit of 1% of the sum assured).

For example, your policy has a daily room rent limit of Rs. 4,000. At the time of hospitalisation, rooms with rent of Rs. 5,000 and Rs. 7,500/day are the only rooms available. You choose a room with a daily rent of Rs. 5,000 (25% higher than the maximum daily limit of Rs. 4,000). In this case, along with the additional room rent, you may have to pay other related expenses in the same proportion from your pocket.

Hence, when you compare health insurance plans, look for plans with either no room rent limits or higher room rent limits.

4) Annual health check-up

You must follow a healthy lifestyle and take preventive health check-ups annually to maintain good health. A preventive health check-up helps you regularly monitor your health status and catch any disease in the initial stage.

Some health insurance plans offer free health check-ups. However, the frequency may be yearly or once in 2, 3, 4 years, etc. When comparing health insurance plans, look for ones that offer an annual health check-up.

5) Co-payment clause

Some policies require you to share a certain percentage of the hospitalisation bill, known as a co-payment. Usually, the co-payment may range from 5 to 25% of the hospitalisation bill. Suppose the hospitalisation bill approved by the insurance company is Rs. 50,000, and the co-payment is 10%. In this case, the insurance company will pay Rs. 45,000, and you will have to pay Rs. 5,000 from your pocket.

Hence, when you compare health insurance plans, look for plans with either a no co-payment clause or a low co-payment clause.

6) No claim bonus (NCB)

Most health insurance policies offer you a bonus if you don't make any claim throughout the policy year. It is known as the no claim bonus (NCB). The NCB may be offered as a specified percentage discount on renewal premium or a specified percentage increase in the sum assured. The quantum of the NCB may vary across policies ranging from 5 to 50% of the sum assured per year. However, there may be an upper ceiling on the NCB.

For example, the sum assured of your health insurance policy is Rs. 2,00,000. The company offers an NCB of 25% per year. The maximum limit is 100% of the original sum assured. In this case, if you don't make any claim in the 1st year, with the 25% NCB, the sum assured will increase to Rs. 2,50,000 at the start of the 2nd year. If there is no claim in the 2nd, 3rd, and 4th year, at the start of the 5th year, the sum assured will increase to Rs. 4,00,000, which is the maximum limit. If there is no claim in the 5th year also, the sum assured will stay at Rs. 4,00,000 at the start of the 6th year.

When you compare health insurance plans of different companies, look for plans that offer a higher NCB as an annual percentage increase in the sum assured. Also, the overall maximum limit as percentage of original sum assured should be higher.

Compare health insurance plans and choose one that fits your requirement

We have discussed six key factors to consider while comparing health insurance plans. There are other additional factors that can be compared.

ManipalCigna Health Insurance (MCHI) offers a wide range of health insurance plans under various categories. These categories include hospitalisation cover, personal accident cover, critical illness cover, daily hospital cash, and riders (that can be optionally attached). Within categories, MCHI various plans and different variants within some plans. You can compare various plans on the product comparison page. On a specific product page, if the product offers variants, you can compare the features of the variants.

The comparison process may take some time, but it will help you identify the plan that best suits your need. When you have bought a health insurance plan that fits your requirement, it will give you much-needed peace of mind.