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Common health insurance mistakes

When you are buying a health insurance policy, evaluate what you need and how much risk you can afford to take so that you will not be over/under insured

September 24, 2012 11:39 IST | India Infoline News Service
Health insurance protects you and your loved ones from suffering any financial disasters caused by high medical expenses. Paying your hard earned money for either short or an extended hospital stay may be very expensive. Typically health insurance allows you to receive the necessary health care if you or your loved ones fall ill or are injured. Health insurance eliminates the financial risk of making large payments to health care providers for injury or illness.

When you are buying a health insurance policy, evaluate what you need and how much risk you can afford to take so that you will not be over/under insured. Do a better research regarding features, premium and coverage of the product as well as the insurer’s service quality before buying any plan. Here are some common mistakes you must avoid when buying a health insurance policy.

Hiding health related information
Sometimes customers’ believe that falsifying the information in proposal form will not be discovered in future. Mis-representation of facts usually done by people when they have pre-existing conditions and they think this will lead to a higher premium or prevent them from getting the insurance cover. However, insurance companies check medical records thoroughly and if they miss it, a doctor may be able to find out that the condition existed before obtaining insurance. If this is the case, insurance premiums will go up and people may lose their coverage.

Your medical provider is not in the network hospital list
Cashless hospitalisation is a facility in which a person can get the required treatment while the medical expenses are settled by the insurance company directly with the hospital if the hospital comes under its network lists. Most important thing is you need to check whether your medical provider comes under the hospital networks list or not, so that you don’t have to pay more towards healthcare expenditure. Therefore, it is important to compare the availability of associated networks of hospitals of each insurer when comparing products to meet your needs.

Giving more premiums to save co-pay
Co-payment is the amount of hospitalisation expenses the policyholder has to give from his/her pocket during the treatment before availing the insurance benefit from the insurer. Some products have flat co-pay structure where as some comes with co-pay after certain age and some of the products available with co-payment in different treatment zone and non network hospitals. Sometimes for getting low co-pay we ignore the extra premium we pay for the health insurance. So it is wiser to evaluate the need of extra premium cost for the co-pay and buy the suitable health insurance plan.

Being over insured
Getting too much coverage and riders is another mistake people make. In many cases, getting adequate coverage does not mean going overboard and being too cautious. It means getting just enough coverage to keep themselves and their family healthy. So it is important to take adequate health coverage.

High deductible health insurance
High deductible health insurance is a kind of health insurance where the insured pays high deductible amounts before the insurer offers its share of coverage. This deductible forces the policyholder to pay first portion of a medical expenses before the insurer pays. Sometimes low premiums attract customers to buy high deductible health insurance plans, but the most important fact is that you need to make sure that you are prepared to pay your portion of medical expenses. It is necessary to check the maximum out of pocket health expenses you can afford and then buy the health insurance policy, otherwise you will end up in not paying your portion of health care cost before getting any health insurance benefit.

Not reviewing current health insurance policy
Failing to review the current health insurance policy could also be costly when getting insurance coverage. A thorough review of a current policy will inform customers what they need in the new policy. Otherwise, they could be getting too much coverage or not adequate and still pay high premiums for it.

Article contributed by www.i-save.com—an independent provider of information, research and analysis on insurance and personal finance.

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