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How to choose the best health insurance plan?

The Corona virus is in the news for being a huge health risk, but it is just one of the health risks that you may face in today’s world. This is worrying because if you fall ill, the medical expenses will be heavy on your purse and it can dent your savings which can land you in a debt trap. The solution of course, is to ensure you have adequate health insurance that covers health care expenses. Fortunately, there are many insurers who offer different types of health insurance plans but choosing one of these plans needs to be done wisely. If you make a mistake selecting the insurance plan, it can cost you a lot.

It is important to choose the right plan. The following 5 steps can help you choose the best health insurance plan for you:

  1. Understand the options available

You can get a health insurance plan on your own however it is generally more expensive, or go with a plan offered through your employer which usually works out cheaper. This is because your employer will pay part of the premium. Plans sponsored by employers are known as group plans and they are cheaper than plans taken directly from the insurer.

  1. Understand the coverage offered by the plan

The coverage offered by health insurance plans can vary. The policy will tell you what is included in the policy and what is not and it’s important to understand what ailments and illnesses the plan covers and what it doesn’t. Here are a few things you need to know:

  1. Pre-existing diseases: Some plans do not offer coverage for pre-existing diseases.. You need to declare if you have any disease at the time of obtaining the policy. In some cases, these diseases would not be covered for a few years, in other cases they may never be covered. Some plans however are designed to allow immediate coverage for pre-existing diseases so you need to check this before choosing a plan.
  2. Exclusions: Certain plans may exclude dental treatment, or some specific procedures, and illnesses. This needs to be understood at the time of choosing the policy. This means if you suffer any of the illnesses that are excluded, the costs will not be reimbursed by the insurer. You need to look out for an insurer who gives you adequate coverage.
  3. Hospitalization requirement: Some plans only reimburse expenses spent on hospitalization which means outpatient procedures are not covered.
  4. In-network: Insurers have a network of doctors and hospitals and some will require you to get treated by one of these doctors to be eligible to make a claim on your policy. It’s important therefore to make sure the network includes local doctors that are convenient for you to visit.
  5. Cashless vs. reimbursement: Some insurers provide cashless insurance claims which means they will pay the hospital bills directly (subject to the terms of the policy). This is very helpful as you need not run around the insurer will do it for you. In case, this facility is not available on your chosen plan, you willl need to pay the bills and then submit a claim after which will be processed and then reimbursed to you.
  6. Individual or family plans

You can get health insurance that covers your entire family, or you can choose an individual plan that covers only yourself. Family plans are generally better as you tend to get wider coverage for more members of your family. It can also work out to be less expensive compared to getting separate policies for each of your family members.

  1. Understand the terms of the policy

The insurance policy works based on the terms and conditions outlined so you need to be aware of what these terms say. Not understanding the policy terms can result in large expenses later on. Here are a few things you need to know about the policy terms:

  1. Voluntary deductible: When you make a claim for insurance, you can choose to pay some of the expenses on your own. This is called a voluntary deductible. Selecting this option will entitle you to a lower premium.
  2. Coinsurance: This is the percentage of the expenses that you need to pay, and the balance will be paid by the insurer. For instance, if you have a 15% coinsurance, then it means you need to pay 15% of the bill and the rest would be paid by the insurer.
  3. Copayment: This is a fixed amount that you need to pay to avail medical services. Once you pay this amount, any balance amount is paid by the insurer. The copayment depends on the type of services and the doctor’s specialization.
  4. Compare benefits

Each insurer offers multiple benefits in the plan so it’s important that you read all the benefits offered and compare them before you make a decision on which insurer to choose. Ideally, you should shortlist a few insurers/insurance companies and study all their details, including coverage and benefits to compare which is the best option for you.

  1. Compare the prices

At the end of the day the insurance company will charge you a monthly or yearly premium that you need to pay regularly. Paying this amount ensures you have health insurance coverage. The premium of course, depends on the amount you are insured for. It also depends on your age at the time of obtaining insurance and the coverage chosen. You will obviously want an insurance plan that has the lowest premium but it is important not to look only at the price. You should compare benefits and prices before deciding. The lowest-priced plan may not give you sufficient coverage.

Health insurance is one of the most important investments that you will make. If you fall ill, then you won’t have to worry about the bill since most of it is taken care of by the insurance plan you choose. That allows you to focus on getting better. If you follow the steps we have suggested you should be able to find a plan that works best for you.