Misconceptions About Health Insurance

Design Credits: Rakesh Mohan

Mr. Vinod bought Health Insurance for himself, without even properly reading the terms and conditions mentioned in the policy. The result? He regretted his own decision not too soon after. A few weeks after buying the policy, he was afflicted with a severe pain in the stomach. It was 4 a.m. when he was rushed to the hospital and was diagnosed with calculi in the gallbladder. He was operated on and he returned home after paying the hospital bill with his own money.

Wondering why he paid the medical bills even though he had Health Insurance?

Well, it’s because of a couple of assumptions he had made about his Health Insurance cover. He assumed that every single medical expense would be covered from day one but this wasn’t the case. Also, this particular disease was not actually covered under his basic Health Insurance plan. It was in fact, a part of the customised options, as it’s not a very common disease. He, therefore, ended up settling the medical bills from his own pocket!

What happened with Vinod is not uncommon, and happens quite frequently with innocent buyers who do not read or understand the terms and conditions of their Health Insurance policy. So, here’s an article to help you clarify some misconceptions about Health Insurance.

What is Health Insurance?

In simple words, an insurance cover which provides financial protection against health risks is called Health Insurance. It covers medical emergency expenses, pre and post-hospitalization expenses, medical test expenses and much more. A Health Insurance plan can be bought to protect yourself and your entire family as well.

General misconceptions about Health Insurance

1. No need to declare existing diseases

A common reason for the rejection of a claim by an insurance company is the non-declaration of your existing diseases in the policy. Most people do not disclose their existing diseases, under the assumption that all diseases are covered by the insurance policy, irrespective of your declaration. Well, this may not be the case as not all medical expenses are covered by a Health Insurance policy. Also, your medical reports will declare your past and present medical condition clearly, even if you managed to hide it initially. So, don’t take any chances and make sure that you declare all existing diseases!

2. 24 hours hospitalisation is a preliminary requirement for a claim

No, there is no such preliminary requirement. This is a very common misconception among people. Few people know that consulting specialists, vaccinations, diagnostic tests, even dental and eye check-ups may be covered under a Health Insurance policy. One does not necessarily require a 24-hour hospitalisation period to get the insurance claim. Although some Health Insurance policies may require 24-hour hospitalisation, it’s not the case with all. Every policy is customised and varies from one person to another, so check the conditions mentioned in your policy document.

3. Buy a policy at a low premium

An insurance policy with a low premium may not always be good. Always judge the insurance company with the claim settlement ratio and type of services it provides. Also, try to buy a Health Insurance policy which suits your requirements and do not settle for just any policy only because you want to pay lower premiums every month or annually. Remember health is wealth!

4. Small Sum Assured is adequate

An insurance cover of 1 or 2 lakhs may not be sufficient to beat the mounting cost of medical bills these days. You must buy a Health Insurance cover as per your actual requirements. Ignoring this could lead to insufficiency of funds when you need them the most. Ultimately, you will end up paying from your own pocket in spite of having Health Insurance. Do your calculations correctly and decide the coverage amount.

5. Every claim is cashless

Do not assume that every medical claim is cashless. This may not be the case for every Health Insurance policy. Only authorised medical claims are generally covered under the cashless settlement scheme. So, instead of waiting for the last moment, it’s always good to have an emergency financial back up, to cover additional bills which may not be covered under the policy.

6. Group Insurance is sufficient

Are you covered under your employer’s group Health Insurance policy? If you think that you’re now sufficiently covered, consider this – what happens when you leave the company or retire? And what if you meet with an accident or have a medical problem when you switch jobs? Group insurance coverage will definitely not be applicable in such scenarios. Also, group insurance policies are standardised ones and may not match your individual requirements. That’s why you always need an additional Health Insurance cover which is designed to suit your needs and medical requirements. Buying a policy which covers your family members is important as well.

7. Tax Saving Instrument

Buying a Health Insurance policy is important only to save your taxes. This is a general misconception which many of us have. Understand that a Health Insurance policy covers you and your family against health risks and medical emergencies. It’s not just a tax saving tool!

Finally, don’t live under the misconception that since you are healthy now, you will never fall sick or need Health Insurance. You never know when a medical emergency will arise, so it’s best to be prepared. And most importantly, do not forget to read and understand the terms and conditions of your Health Insurance policy, it will save you from a lot of unnecessary grief!