Busting Top 10 Common Misconceptions About Health Insurance

In India, many families are just one hospitalisation event away from losing their hard-earned lifelong savings. Hence, it is important for every family to buy health insurance. You should choose the best health insurance policy for family based on the family’s needs. To do that, you need to understand the product and processes related to health insurance, including clearing all misconceptions. In this article, we will clear ten misconceptions about health insurance which will help you evaluate the best family insurance plans.

Common health insurance misconceptions

1)    Health insurance is not required for children and young and healthy people

Please note that viruses and illnesses don't discriminate between children, young individuals, and senior people. During Covid 19, the healthiest of people got affected for no fault of their own. Similarly, an accident can strike anyone irrespective of age or health status. Hence, everyone must have health insurance, regardless of age or health status.

2)    Employer’s health insurance is enough. You don’t need personal health insurance

An employer’s health insurance will be valid only till you are working with the organization. The corporate health insurance plans usually have low coverage and may come with a co-payment clause. The plan may cover only the employee and not their family. The decision to continue or discontinue the policy is in the hands of the employer.

Hence, having an employer’s health insurance coverage is good, but it should be kept as a backup option. You should always buy your personal family health insurance plan.

3)    Health insurance is good only for tax-saving purposes 

Yes, health insurance does provide tax benefits. But that is an additional benefit. The primary purpose of health insurance is to provide you with financial protection against expenses that may arise due to a family member’s hospitalization. You also get tax benefits, up to specified limits, for preventive health check-ups. These health check-ups help you monitor the current health status and take action if any illness is reported in the initial stage itself.  

4)    The claim will be paid only if you are hospitalized for at least 24 hours

While most procedures require a minimum of 24 hours of hospitalization, some can be managed in less than 24 hours. These procedures are known as daycare procedures. Some of these include cataract surgery, tonsillectomy, dialysis, radiotherapy, chemotherapy, appendectomy, piles surgery, etc. Nowadays, most of healthcare plan includes day-care treatment.

The insurance policy document specifies the list of daycare treatments covered. There is no requirement for at least 24-hour hospitalization for these procedures. The claim will be paid as per the policy terms and conditions.

5)    Cashless treatment is the only way to go

Hospitals where cashless treatment can be taken, are known as network hospitals. Insurance companies are trying their best to expand the network hospital coverage as much as possible. However, not all hospitals/nursing homes can be brought under the hospital network.

But a policyholder can still take treatment in these hospitals and make a claim. The difference is that they will have to pay the hospitalization bill from their pocket first, submit all the bills and reports, and get reimbursed by the insurance company. So, the claim will be paid on a reimbursement basis rather than a cashless basis.

6)    The health insurance coverage starts immediately from the time you buy it

The main purpose of health insurance is to protect you from uncertain times but this protection also starts after a few days. Most health insurance policies have a waiting period of 30 days before you can use them for making hospitalisation claims.

The exception is hospitalisation due to an accident. Apart from the 30 days initial waiting period, there is a waiting period of 2-4 years for various pre-existing illnesses. The waiting period differs as per the diseases and policy terms & conditions.

7)    It is okay not to disclose pre-existing illnesses to reduce the premium

You should never conceal any material information related to any pre-existing disease you may be suffering from. At the time of a claim or during any other time, if the insurance company finds out about your existing pre-existing illness, it has the right to reject the claim and even declare the policy null and void.

Hence, it is always a good practice to declare all material information about your health at the time of filling out the health insurance application form.

8)    People with bad habits, such as drinking alcohol or smoking, cannot get health insurance

In the earlier section, we saw how it is important for an individual to declare all material information about their health while filling out the health insurance application form. The information also includes details such as the number of cigarettes smoked or the quantity of alcohol consumed. The information helps the insurance company to evaluate the risk involved and price the premium accordingly. People who drink alcohol or smoke cigarettes get health insurance, but the premium may be higher than others.

9)    Alternative treatments are not covered under health insurance

Many health insurance policies currently cover alternative treatments, such as Ayurveda, Unani, Homeopathy, etc. The terms and conditions related to the alternative treatments are mentioned in the policy document. Hence, please read the entire policy document carefully.

10)    Maternity cover is not provided

Many health insurance policies do provide maternity coverage. However, there is usually a 24 to 36-month waiting period. Also, the policy may limit the maternity cover to one to two pregnancies. 

Spend some time understanding the policy terms before and after buying it

The above are just some misconceptions about family insurance plans and other plans. There may be other misconceptions. It is always advisable that you read all the policy information given on the company website or brochure. After that, if you have any doubts, it is better to get them cleared with the company agent or customer care. It is not every day you will be buying health insurance.

Hence, whenever you decide to buy it, ensure all your doubts and misconceptions are cleared. Also, once you receive the policy document, spend some time and read all the policy-related terms and conditions. If you come across a clause you don't understand, get it clarified so that you have the much-needed satisfaction that you have bought the right family health insurance plan for your family’s security.