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5 Tips to Consider before Buying a Health Insurance Plan

dateKnowledge Centre Team dateApril 29, 2021 views291 Views
5 Tips to Consider before Buying a Health Insurance Plan

Health insurance plans offer relief by reimbursing the costs incurred in hospitalization. This frees you from the burden of financial worries so that you can focus on yourself or your loved ones when they need maximum care and attention. But when you log on to the internet to search for the best health insurance policy, you will end up seeing several options that may leave you confused.

All policies may or may not suit your requirement because each person and family’s circumstances are different. A one-size-fits-all approach will not work in the case of health insurance. The cost, network hospitals (for cashless treatment), payment terms, ease of application/claim process, renewal bonuses, illnesses covered, etc vary from insurer to insurer.

These 5 tips may make your decision-making process smoother to buy the best-matching policy:

1. Type of Coverage

Healthcare insurance is a broad term and therefore understanding the finer difference between conventional Mediclaim policy vs Critical Health Covers is important.

Some conventional policies require co-payment which means the insurer will not bear 100% of the bill. You have to pay some portion. There could be maximum limits on room rent, ambulance charges, medicines, pre-hospitalization expenses, post-hospitalization expenses, etc. In cashless hospitalization, the hospital receives covered expenses directly from the insurer after admission.

Critical Health Covers, on the other hand, for listed illnesses or conditions such as Cancer or Heart Treatment may offer a direct fixed cash benefit without considering the expense incurred.

Mediclaim Cover Critical Health Cover
Covers a majority of hospitalization expenses regardless of disease, including pre- and post-hospitalization to some extent Covers specified diseases, usually life-threatening ones with high treatment cost and low survival rates
Benefit disbursement depends on the cost incurred Benefit disbursement is fixed regardless of the cost of treatment
The policy usually continues after a claim with reduced sum insured (SI), until renewal, when the SI is restored The policy terminates after a major claim, in case of a minor claim the future premiums are waived off (e.g., Health First Plan from Canara HSBC Life)
Includes no claim bonus in the form of increased sum insured Has growing sum assured
The benefit amount is in the form of reimbursement and usually covers a large part of the cost The benefit amount can include a sum payable as regular income to your family

2. Sum Assured or Insured

Sum Assured defines the amount that is assured to the policyholder irrespective of expense incurred. This helps cover even incidental expenses that may not be directly related to hospitalization. Look at the simple example tabulated below.

This illustrates the Health First Plan of Canara HSBC Life Insurance. Say, Ramesh, aged 40 years, is diagnosed, with a minor Cancer condition, at the age of 55 years. Ramesh has the following cancer cover with him and will get a lumpsum amount of Rs.7.5Lakhs irrespective of the expense incurred.

Plan Sum Assured Policy Term
Cancer 30Lakhs 25 years

All future premiums for this policy will be waived off thereafter. If Ramesh is, unfortunately, again diagnosed with a major Cancer condition at 58, he will receive Rs.22.5Lakhs and the policy would terminate.

Such policies are also very pocket-friendly because one can opt for an “increasing cover option” wherein your Sum Assured would increase year on year with a very nominal increase in premium. This option beats the rising costs of healthcare treatment due to inflation.

Mediclaim policies will define what kind of costs are covered and would reimburse the actual amount spent on the treatment. Of course, there is an upper limit just like in any policy. There may be exclusions too such as pharmacy consumables, disposables, incidental expenses even during hospitalization, etc. Therefore, Mediclaim policies reimburse costs to the extent of what is insured and spent.

3. Right Time to Buy

Insurance premiums are calculated mainly based on age. Therefore, the earlier you start, the more you save in your annual cash outflows. If you have started earning, you must consider buying insurance first. If you are a homemaker looking for medical insurance you can be a part of the family health plan that most insurers offer. These family plans are good bargains and money savers.

If you are a senior citizen exploring senior citizen insurance plans, choices may not be vast, but you must act quickly. Youngsters should not delay buying insurance because as you age you risk falling ill and paying a higher premium for the same coverage. Preventive health checks are important at all ages and some policies bundle annual health check-ups as part of their offering.

4. Claim Process

After a hospitalization, the only thing you want is peace of mind as you move on with life. Look at settlement percentages of insurers. The ones that process claims quickly and have a high settlement ratio are the ones to look out for. The claim process for Mediclaim could be simple as connecting with a TPA who will take care of your claim.

In case of critical health policies, you will need to file the claim with the life insurer either through their website, customer support or advisor. Once you have done so, the insurer will release your applicable benefit amount after completing the paperwork.

5. Renewal Age

This is the age until when the policy can be renewed. This is different from the minimum and maximum age of entry. Renewal age can also be termed as the upper age limit for any policy to mature. For example, the health first plan can continue till you reach the age of 80, which is higher than the average life expectancy of the subcontinent. However, it is better to read the fine print of the product before you sign on the dotted line. As there are a lot of myths surrounding this, it is always better to stay on clear grounds.

Learn these 5 myths about a health insurance plan.

Healthcare costs are rising due to inflation, newer technologies, and also the emergence of newer ailments and illnesses. You must factor in all these points in addition to your personal needs while signing up for a health insurance plan. This will help you live stress-free because you know there is someone to take care.

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Frequently Asked Questions (FAQs) for Life Insurance

Buying health insurance online is cheaper and more convenient than getting a policy through an agent. Insurance companies work on the premise that people who have access to the internet and are willing to buy policies online are more likely to be better-off and healthy. Moreover, online plans save a lot of money for the companies as the administrative costs such as documentation and office space get eliminated. The insurance companies pass on the savings to the customer and offer lower premiums on online health insurance plans. With online plans, you do not have to visit the bank of the insurer’s branch and can buy the policy sitting in the comfort of your home.

Canara HSBC Life Insurance provides a comprehensive health insurance plan named Health First. It is a fixed benefit plan that provides a lump-sum amount on the occurrence of heart or cancer-related conditions, besides 26 other major critical illnesses. It is a flexible plan that gives you the freedom to choose the cover you need along with various options to customize the plan according to your requirements.

Diseases can strike without any warnings. Having a health plan protects you from unforeseen financial hardships and helps you lead a stress-free life. A health plan also ensures that you receive quality treatment in case you are diagnosed with a serious illness. A health plan creates a buffer around your savings, which remains unscathed even in cases of substantial treatment costs.

There are no uniform rules to select an insurance policy as the needs and medical history of people vary. However, Health First plan from Canara HSBC Life Insurance offers comprehensive coverage, which could be adequate to take care of all your health insurance needs.

The health insurance premium depends on a variety of factors such as age, geographical location, lifestyle habits and occupation. The best way to calculate health insurance premiums is to use a good online premium calculator which is easily available.

With the change in lifestyles, the incidence of diseases has increased drastically. Health insurance is necessary to cover against lifestyle diseases, which are on the rise due to poor nutrition, lack of physical activity and pollution.

A health insurance policy ensures that you and your loved ones do not have to think about the finances while opting for treatment. In the event of hospitalisation, a knowledge of the claim process saves the policyholder from undue hassles. A hospitalisation can generate reams of bills and documents. The claim process of fixed-benefit health insurance is very simple as the payout does not depend on the cost of treatment. In case a critical illness is diagnosed you just have to intimate the insurance company. The insured just has to fill a claims form and attach the doctor’s report on the illness. One doesn’t need detailed bills and prescriptions to claim the sum assured. The entire process is very simple and hassle-free.

Health insurance premiums can help you in reducing tax outgo, as it is eligible for tax deduction under Section 80D of the Indian Income Tax Act, 1961. If you choose a health insurance plan for parents aged 60 years and above, you can claim Rs. 50,000 as a tax deduction. Senior citizens up to 60 years can also claim up to Rs 25,000 as a deduction for the health insurance premiums paid for themselves, or for their spouse or children. This deduction will be available with respect to payments towards annual premium on a health insurance policy, or preventive health check-up of a senior citizen. It is also available for any other medical expenses related to senior citizens. In such a case, if you are paying the health insurance premiums for your senior citizen parents, the total deduction you can avail is Rs. 75,000 per year.

There are no fixed guidelines for choosing adequate health insurance cover, but the cover should depend on factors such as income, family history of diseases and geographical location. Considering the high cost of medical care in metro cities, one should have a minimum cover of Rs 10 lakhs. The cost of hospitalisation and associated costs are higher in large cities. Smaller cities have lower cost of living and a cover of Rs 4-5 lakhs would suffice.

Health insurance plans do not cover all the diseases and certain conditions are excluded from the cover. Some of the common exclusions are:

  • 1.Pre-existing medical conditions
  • 2.Alternative therapies
  • 3.Cosmetic treatments
  • 4.Pregnancy and child birth
  • 5.Diagnostic expenses
  • 6.Dental
  • 7.Injuries caused due to a suicide attempt
  • 8.Waiting period clause
  • 9.Permanent exclusions: Injuries due to war, HIV, intentional injuries, congenital diseases, and others are permanent exclusions

Diseases can strike without any warnings. Having a health plan protects you from unforeseen financial hardships and helps you lead a stress-free life. A health plan also ensures that you receive quality treatment in case you are diagnosed with a serious illness. A health plan creates a buffer around your savings, which remains unscathed even in cases of substantial treatment costs.

Employer waiting period: Waiting period is the length of time that an employer will make a new hire wait before the employee is eligible for coverage access under the company's health

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