Benzinga

10 Things to Consider while Choosing a Company to buy Health Insurance

Everyone around the world would prefer to have financial stability. They work for that, plan to save the hard-earned money, invest in a diversified portfolio and try to grow their money for a lifetime. Unforeseen expenditures like medical expenses, accidents drain our life’s savings and change our financial status within months (or even weeks sometimes). To prevent yourself from such unexpected health traps, it is always good to have health insurance. It protects you for the rest of your life, financially supports you during a mental and physical crisis. You will be getting recommendations and calls from various sources telling about various health insurance plans. We understand that you are confused with which company to buy and the parameters you must consider before buying health insurance. To ease your process, here are the top 10 things you must consider before buying a health insurance policy.

1.NETWORK = NETWORTH OF YOUR CLAIM:

Once you have decided to get yourself insured, always prefer an insurance company that have a wide network of hospitals. Check if that insurance provider includes your preferred hospital or doctor. If your preferred hospital is out of the network of your policy provider, you will not be eligible for cashless treatments. Cashless claims allow the insured (person who has taken the policy) to get treated without paying anything upfront. The hospital directly deals with the insurer to settle the hospital bills. If you get treated from an out-of-network hospital, you have to spend your pocket- money initially and then reimburse the bills. The higher the network of your insurance company, the higher will be the possibility of you availing yourself of your benefit.

2.SIMPLIFIED PROCESSES:

                        You can meet with any sort of emergencies at any time. So, know the process to claim your health insurance coverage beforehand. Try to get information regarding where you have to apply to get your bills reimbursed, type of emergencies that can be covered, documents you have to submit to claim your coverage, the approximate time it will take for the insurance provider to give your benefit, etc… To claim your medical expenses, you will be requiring documents like medical certificate, original bills, memos, discharge card, cash memos for medicines purchased from external pharmacies, FIR in case of accidents, etc. Choose health insurance plans from those insurance companies which have a hassle-free process and good customer support to claim your benefits on time.

3.CLAIM-SETTLEMENT RATIO:

CSR= Number of claims settled/ Total number of claims received           

Not all the claims you request will be settled. Your Insurance company has the authority to reject your claim with proper reasons. So, check for the number of claims your insurance company has accepted and settles. A simple way to check is to know the claim to settlement ratio of your insurance company. Claim Settlement Ratio reflects the percentage of the total number of claims settled to the total number of claims received by the company. The higher the percentage is, the higher would be the possibility of your claim being accepted by the insurance company in future. Get yourself insured from those providers who have a higher claim settlement ratio to be on the safer side.

4.BUSINESS VOLUME:

                        Prefer buying health insurance plans from those companies who are in the market for a long period with a huge number of active customers paying monthly and annual premiums. These companies are more likely to have the needed funds to settle the claims if you request for while newly started ones may not have enough experience and funds to settle your claims.

5.STICK TO YOUR BUDGET:

                        While taking any insurance plan, you will be required to pay the premium amount regularly. The premium on health insurance plans is decided on various factors like your geographical location, age, tobacco user, medical history, etc. Insurance providers have three plans like bronze, silver and gold. Choose the most suitable plan according to your age, budget, financial situation, etc… Don’t invest much in health insurance and end up with no funds for other expenses. Also, plan if you can afford that premium throughout the tenure of your insurance. People who default to pay their premiums cannot avail of the benefits. So, choose a company that provides proper advice according to your situation and select a plan and premium amount accordingly.

6.POST/ PRE-HOSPITALIZATION EXPENSES:

                        When it comes to medical expenses, never forget to include the pre-admission expenses like routine check-ups, tests, medicines before surgery, etc. Make a complete study if these expenses are covered in your plan. If such expenses are not covered, you will end up paying from your own pockets.

7.SOLVENCY RATIO:                       

Solvency Ratio= Net Income/ Total Liabilities

            A solvency ratio of an insurance company tells you the company’s ability to meet its debt with the present assets and cash flow. Select a company that has a higher solvency ratio, meaning it has a high proportion of capital to pay of its debts. You can have a guarantee that even your bulk claims will be settled if the company has enough capital and cash inflow.

8.VARIETY OF HEALTH INSURANCE PLANS:

Always prefer a health insurance company that provides a huge variety of plans like family insurance, individual insurance, pregnancy insurance, specific segments for senior citizens, heart patients, covid treatment, etc. You can get more options to choose and finally, you can opt for a particular or multiple health insurance plans according to your medical history and needs.

9.REVIEWS:

                        Despite checking the market share, solvency ratio, and CSR of the insurance company, it is always best to check the customer reviews on various platforms like google reviews, quora, and other social media platforms. They are the testimonials provided by people like you and they are mostly honest reviews. Next time before buying health insurance plans, you must access the reputation of the insurance provider by reading the reviews and ratings by the public.

10.INCURRED CLAIM RATIO:

ICR= Net Claims Incurred/ Net Premium Earned

            Incurred Claim Ratio is the total amount paid to settle the claims with respect to the premium collected by the insurance company. If the ICR is more, it means that the insurance company is at a loss implying that it pays more than its cash inflows. At the same time, a lower ICR implies that the insurance provider is not paying enough as settlements to its policyholders. So, choose an insurance provider that maintains an average ICR before buying health insurance plans from them.

CONCLUSION:

            Investing in Health Insurance is of course important. Be prudent enough to select the best insurance provider and don’t waste your hard-earned money in the name of investing. Stay safe and stay protected.