Choosing a comprehensive health insurance plan that will adequately cover your health risks as well as that of the other members of the family against the spiralling cost of healthcare is not an easy task. While the variety of health insurance plans seems endless, there is no one-size-fits-all policy.

To begin with, there are two initial considerations that you should keep referring to while choosing a proper health insurance plan for you and your family — first, how much you can afford to invest and, second, what are the healthcare needs that you require to insure.

Avoid the frills

Given the fact that most health insurance products in our country are designed around hospitalisation benefits, plans with many frills could be quite costly. So, you must be very careful about unnecessary frills in a plan that you won’t need, at least in the near future.

Cut out the frills and ensure that all members of your family are adequately covered against any “unmanageable costs” because of hospitalisation.

So, choose a health insurance plan that offers the maximum protection in terms of hospitalisation benefits at your budgeted annual premium. It’s best to avoid comparing the premium of the products offered by different insurers. This is because indemnity health insurance products of non-life insurance companies come with co-payment clauses wherein the policyholder will have to pay part of the hospital bills.

If you are working on a low budget, you must clearly understand the impact of the co-payment clause — whether you’ll be able to pay up the money in the case of a hospitalisation.

If you choose a health plan comparing the premium only, chances are high that you will overlook this co-payment aspect and find yourself in trouble later when a major illness happens.

Read between lines

Instead of comparing premium, a clear understanding of “policy wordings” — what all are covered under the plan — is more important while selecting a health insurance plan.

An understanding of the co-payment and treatment wise limits in various health insurance plans is the second most crucial thing in selecting a suitable health insurance plan. In most health insurance plans, you cannot claim the full sum assured for every illness and treatment covered under the plan.

For example, under a health insurance plan with a sum assured of Rs 5 lakh, a cardiac surgery can be covered up to a specified limit, say Rs 1.5 lakh. If the hospital charges you Rs 2.5 lakh for a cardiac surgery, you’ll have to pay the remaining Rs 1 lakh and the insurer will pay Rs 1.5 lakh.

Hence, when you sign up for a health insurance plan, you need to know what will not be paid by the insurer.

The third step will be to look for the maximum renewal age. Health risks increase with age. So, the maximum age up to which the insurance cover will be available on renewals is extremely important. Policies vary on this aspect. While some plans offer lifetime renewal benefit, the cover ceases at the age of 70 in others.

An insurance plan that does not provide protection when you most need it is not a right product. Always go for the plan that offers the maximum renewal age even if the premium is a trifle higher. At least, you won’t have to worry about medical insurance at an older age.

Premium loading

Earlier, it was mentioned that you should not choose a health insurance plan simply by comparing the premium charges. But you must also know how insurers increase the renewal premium as you grow older. This is called premium loading.

Insurers increase the premium depending on your claim experience as well as your age. Your premium will go up if you frequently make a claim. Your premium will also go up as you grow older.

While selecting a health insurance plan, you must try to understand how the insurer increases the premium rates on the basis of the age of the policyholder. If you carefully analyse the premium rates of different health insurance plans, you’ll see the annual premium suddenly goes up quite a bit after the age of 45. You need to take this into account to ensure that the premium remains affordable after your retirement.

So, compare the premium rates for various age brackets of different insurance plans. The best way to compare this is by finding out the average premium rates in different health insurance plans for an age band, say 25 to 75 years.

Family time

Finally, go for a family cover instead of individual plans. Family floaters are economical. The best part of a family floater plan is that every member under the insurance plan can get the sum assured to the full extent. This is because chances of one member of a family falling ill are much higher than the entire family suffering from some ailment at the same time.