Health Insurance Basics: What to Check Before You Buy

Two health policies with the same sum insured can pay very different amounts when you are admitted to hospital. The difference is in the details. Here is what to look for.

1. Sum insured and type of policy

• Individual policy: each person has their own sum insured.
• Family floater: one sum insured shared by the family. Usually cheaper for young families.
• Top-up / super top-up: extra cover that starts after a set amount, a low-cost way to increase protection.

2. Room-rent limits

Some policies cap the room rent, for example at 1% of the sum insured per day. If you choose a costlier room, other charges may be reduced in proportion too. Look for policies with no room-rent cap or a generous one.

3. Waiting periods

Most policies do not cover certain illnesses, and conditions you already have, for an initial period, often two to four years. Starting early means these periods are over before you are more likely to need them.

4. Co-payment and sub-limits

A co-payment means you pay a share of every claim, say 10% or 20%. Sub-limits cap what is paid for specific treatments. Both lower the premium, but they also lower what you receive.

5. Network hospitals and claims

At a network hospital the insurer can settle the bill directly (cashless). Check that good hospitals near you are in the network, and how claims are handled.

A quick checklist

• Is the sum insured enough for a major illness in a good hospital in your city?
• Any room-rent cap, co-payment or disease sub-limits?
• How long are the waiting periods?
• Does cover continue for life, and what happens to the premium as you age?

Learn more about health insurance, or read Section 80D explained for the tax benefit.