1.Incurred Claim Ratio (ICR)
Incurred Claim Ratio (ICR) of the general insurance company is an important factor that one should consider while choosing the company / plan. ICR represents the ratio of total claims that the insurer has paid against the total premium received in a particular year. ICR for general insurance companies is published by the IRDAI in its annual report.
ICR above 100%: If a company has an ICR of 110%, then it means the company has paid higher amount of claims (Rs.110) for every Rs.100 of premium received. The company is making a loss.
ICR below 100%: If a company has an ICR of 85%, then it means the company has paid claims of Rs.85 for every Rs.100 of premium received. The company is making a profit.
Companies with an ICR in the range of 60 – 80% are ideal for consideration for buying health insurance
2. Sum assured
The minimum and maximum sum assured offered by insurance companies differ under various plans. Some health insurance plans come with a maximum sum assured of Rs.3 lakh or Rs.5 lakh which may not suffice your requirement considering soaring health costs in today’s scenario. Other things being the same; consider a plan that offers higher sum assured at the lowest premium.
The scope of coverage in terms of inclusions, waiting periods, exclusions will differ among various plans. Check the number of day care procedures covered by the health plan that you are considering. While buying a health plan, it is a good practice to read the list of diseases (inclusions and exclusions), day care procedures, extent of hospitalisation, consultant fees, medical expenses etc. that are covered under the plan.
4. Network hospitals
Every insurance company ties up with various healthcare providers which are called network hospitals. If you avail medical treatment from any of these hospitals, then you can get dual benefits – ease of claim settlement and cashless payment. Hence while buying a health plan you should consider the insurance company that has the highest number of network hospitals.
5. Waiting period for pre-existing diseases
For pre-existing diseases clause, insurance companies take into consideration:
Any existing diseases
Any symptoms or signs related to any disease
Diseases for which the proposed insured has undergone treatment or surgery in the past
Any medication that is being taken. For example medicines for controlling blood pressure, diabetes, asthma etc.
In most health insurance plans, there is a waiting period of 2-4 years. Once the waiting period is completed, pre-existing diseases if any are covered under your health plan. The proposer has to declare any pre-existing condition at the time of buying the policy. Failure to do so will result in rejection of any claims arising out of such pre-existing conditions.
One needs to compare the waiting periods for pre-existing conditions across various health plans and consider the one with the shortest waiting period.
Depending upon the age group, type of plan, medical condition, and sum assured amount, life style habits, profession, vices (smoking, drinking alcohol, tobacco consumption) and several other factors, premium of a health plan is computed. Even if the sum assured amount is same, the premium will differ among different health insurance plans. One needs to do a comparative analysis of the premium and consider a health plan based on the affordability. Keeping the above factors in mind, the plan with the lowest premium need not necessarily be the best that suits your requirement. Consider the plan that suits your health requirement and not the one with the lowest premium.
7. Maternity benefits
If you are at that life cycle stage when you are planning to extend your family in the foreseeable future, then you may want to consider maternity benefits with the health plan.
Under the maternity benefits section, one needs to evaluate the following points:
Waiting period: For maternity benefits the waiting period can range from 1 – 4 years. Consider a health plan with the least waiting period.
Sub-limit: There is a sub-limit applicable on claim amount under maternity benefits based on the type of delivery: Normal or Caesarean. This sub-limit is fixed in advance, irrespective of the actual expense incurred. Hence one should choose a health plan which offers maximum sub-limit on either type of delivery.
Hospitalisation cover: It is important to examine the type of expenses that can be claimed under hospitalisation such as – consultant fees, hospital room rent, medicines, emergency ambulance charges etc.
Pre and post hospitalisation cover: Insurance companies cover the pre and post hospitalisation expenses incurred under maternity benefits up to a certain limit.
Take into account the specific exclusions related to maternity benefits
In health insurance plans with a co-pay option, part of medical expenses need to be borne by the policyholder and rest is paid by the insurance company. In sub-limit option, insurance companies pre-fix a certain amount for the expenses that will be paid by the company. Examples of sub-limits include room rent capping, maximum amount payable for treatment for cataract etc. Consider a plan with low or no sub-limits or no co-pay options.
Most insurance companies reward the policyholder with a bonus, if he / she does not file for any claim in a year. As a bonus, the insurance company increases the sum assured or decreases the renewal premium amount or it can even offer a combination of both. One should consider a health plan with a higher bonus option.
10. Lifelong renewal
One should choose a health plan which offers a lifetime renewal option. As a person grows old, the probability of falling ill or contracting diseases increases. A health insurance plan will benefit more at the later stage of life. Hence a lifetime renewal option becomes important.
11. Free medical check-ups
Even if an individual is healthy, it is advisable to go for a comprehensive health check-up once in 6 or 12 months. Consider a health plan that offers free medical check-ups whether annually or otherwise.