Remember when you downloaded an app or a video game and clicked on the ‘I accept the terms and conditions’ box without actually reading the terms and conditions?

If you do, you’re not alone – Almost all of us are guilty of overlooking software terms and conditions, and it’s tempting to breeze through it. After all, you already made up your mind when you downloaded it. Will a set of terms and conditions stop you from using it?

While that might be the case with software, reading and understanding every detail in your policy document is crucial when it comes to health insurance.

Importance of understanding your health insurance policy document

A policy document states your purchase policy's terms, conditions, inclusions, exclusions, cover amounts, etc. As with any agreement, it is a legal obligation for what the insurer must cover. And for the policyholders, it guarantees what is covered and what is not.

Apart from these features and coverage, another important point mentioned in the policy document is the premium and its breakup for the policy year. This is important because to claim an accurate tax deduction, you need the breakup of the premium paid, especially if your parents are covered in the same policy. Even if this is not the case, knowing how much you pay for the base insurance, add-ons (if any), and other charges is always good.

Your health insurance document is essential for understanding the extent of your insurance coverage, your rights, and your responsibilities as a policyholder. Although you must read the entire document with utmost importance, here are some sections you could concentrate on.

Heads Up: It takes an average person up to 5 hours to read & analyze a policy, and 10 hours or more to compare different plans and make a decision.
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12 Things To Check in Your Health Insurance Policy Document

  1. Accuracy of the Policyholder’s Details: Sometimes, however careful you are, typos, such as an incorrect name or phone number, may occur, or you may need to update your address in your policy document. Regardless of the issue, always ensure that information is accurate and up to date to avoid any administrative issues during the claims process. For example, your name might be ‘Nitisha’, but your insurer enters it as ‘Nishita’.
  2. Policy Number: Your health insurance policy number is a unique number the insurer uses to identify you and your policy. Always remember or keep this number on your person for communication with your insurer should you be hospitalised.
  3. Free Look Period: This is a period during which you, as the policyholder, should review the terms and conditions, policy inclusions and exclusions, etc., and decide whether you would like to continue with the plan. Ideally, this should be done before purchasing the policy, but the IRDAI has mandated this period for the customer's benefit. At the moment, it is 15 days, but they are considering increasing it in the future. You can learn more about it in this article.
  4. Frequency of premium payment: To make insurance accessible to people from all walks of life, insurers have introduced an option to pay your premiums at different intervals. The most common payment period is for 1 year, but you can also pay for 2 or 3 years together. Some policies also offer flexibility by offering monthly, quarterly or half-yearly payments, allowing you to choose your financial needs best.
  5. Premium Calculation Breakup: Knowing what you pay for will always bode well in the long run. Factors like age bracket, pre-existing diseases, medical history, cover amount, add-ons you opted for, etc., affect your final premium. Always go through the cost breakdown to better understand your insurance premium.
  6. Day-care treatments: Some treatments do not require overnight hospitalisation. These include common ones such as cataract surgery and appendicitis and some procedures like chemotherapy. Ensuring your policy covers day-care treatments can save you from these unexpected costs and provide peace of mind.
  7. Pre- and post-hospitalisation coverage: Medical treatment not only includes the actual hospitalisation expense but also the costs for the diagnosis, tests and x-rays before the procedure, and post-care treatment such as medications, physiotherapy, etc. You need to check to what extent and for what time period your insurer covers this. Usually, a good pre-and-post-hospitalisation period is between 60 and 90 days. However, this varies depending on the policy you have.
  8. Room rent restrictions: The top health insurance policies of 2024 usually do not have a room rent restriction. However, some other policies do. If not followed, this restriction could lead to more out-of-pocket expenses—not only for the extra room rent but also for all the treatments availed in the room on a pro-rata basis. So it’s important to take a look at this beforehand.
  9. Permanent Exclusions: Identifying permanent exclusions in your policy is important to understand what treatments will not be covered under any circumstances. Permanent exclusions include cosmetic procedures, self-inflicted injuries, or treatments arising from certain lifestyle choices such as smoking or alcoholism.
  10. Waiting Period: More often than not, you cannot avail 100% of the policy benefits right from day 1. There are certain waiting periods imposed by the insurer, only after which, coverage for those particular ailments will be covered. There are 4 main types of waiting periods –

Initial 30-day Waiting Period: For the first 30 days of purchasing the policy, the insurer will not cover any treatment other than for accidents. These need not only be road accidents but also others – falling down the staircase, for instance.

Specific Illness Waiting Period: Each insurer has a list of ailments they do not cover for a few years, usually 1-2 years. These ailments are benign and do not significantly affect the policyholder.

Pre-existing Disease Waiting Period: In addition to the specific illness waiting period, if the policyholder has a disease before purchasing the policy, the insurer may impose a waiting period and sometimes a loading charge for that disease. This usually lasts between 2 and 4 years, but it depends on the policy and insurer. Some policies may have add-ons to reduce waiting periods. Be sure to check with your insurer for any such offering.

Maternity Waiting Period: Most policies do not cover maternity-related expenses. But if they are, there’s usually a long waiting period associated with them. Most policies have a maternity waiting period of 2-4 years.

11. Co-insurance/Deductible/Copayment Clause: Familiarising yourself with the co-insurance, deductible, and copayment clauses helps you understand your financial responsibilities for covered services. For example, a policy may require paying a percentage of the total cost (co-payment) or a fixed amount (deductible). Understanding these clauses enables you to budget for healthcare expenses and evaluate the overall cost-effectiveness of your insurance coverage. Normally, the top policies do not have these restrictions, but it depends on policy to policy.

12. Network Hospital Details: Each insurer has a list of the hospitals they are comfortable with. These are called network hospitals. Usually, the claims settlement process with these hospitals is quite hassle-free and is on a cashless basis.

Insurers cover non-network hospitals only on a reimbursement basis, but the government is working to bring cashless payments to all hospitals. However, that has a long way to go :(

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What are the Steps in the Health Insurance Policy Document Error Correction?

Nowadays, correcting an error has become easier than ever. No longer do you have to wait in long queues or send a letter requesting them for a change. All you have to do is:

  1. Notify your insurer of the error by filing a ticket via their app or customer care number.
  2. Provide the necessary documentation to verify the error and make the correction.
  3. Follow up with them if there are any further complications.
  4. They will make the changes and send a new policy document if need be.

Top Health Insurance Policies in India in 2024

  • HDFC ERGO Optima Secure: As an insurer, HDFC ERGO has a claim settlement ratio of 97.5% and an ICR of 81.9%, one of the highest in the industry. Optima Secure has no room rent restrictions, disease-wise sub-limits, or co-payment. This policy also boasts a restoration benefit of 100% that can be used for any illness and a no-claim bonus of 50% up to 100% of the sum insured, irrespective of the claim amount.
  • Care Supreme: Care Supreme is a comprehensive, as well as an economic policy. One of the top features of this policy is that it has no loading charges, apart from the usual no room rent restrictions, co-payment and disease-wise sub-limits. The base sum insured ranges from ₹ 5 lakhs to ₹ 1 crore. This policy also has a unique feature called Super NCB, where your no-claim bonus will increase by 100% every year up to 500% of the sum insured, irrespective of your claim status. As an insurer, Care has a claim settlement ratio of 90.75%, with 9.4k+ network hospitals.
  • Aditya Birla Activ One Max: Activ One Max is a good policy that covers the basics - no co-payment, room rent restriction or disease-wise-sublimits. Apart from this, it has a pre-and-post hospitalisation period of 90 and 180 days. Like Care Supreme, this also has a no-claim bonus of 100% up to 500%, which few insurers offer. However, this policy has a pre-existing disease waiting period of 3 years, which is longer than most policies.
  • Bajaj Allianz Health Guard Platinum: Health Guard Platinum is one of the more comprehensive policies offered by Bajaj Allianz. It has no co-payment and disease-wise sub-limits but a room rent restriction of a single private room. It covers daycare treatments but does not cover home care and domiciliary treatments. This policy has a 50% no-claim bonus per year up to 150% and 100% restoration for a different illness after complete exhaustion of the base cover.

However, this policy costs a little more than usual, and the waiting period for maternity is 6 years. As an insurer, Bajaj Allianz has a claim settlement ratio of ~ 94%, with over 8,000 network hospitals.

  • Niva Bupa ReAssure 2.0: In line with the country's top policies, ReAssure 2.0 also has no room rent restrictions, disease-wise sub-limits, or co-payment.

This policy also has a restoration benefit and no-claim bonus, unlike any other policy in the market. Once the restoration is triggered, it will stay active until you stop renewing the policy. This is called ReAssure Forever, and this can be used for any illness in a policy year.

The bonus is also quite different in this policy. The amount not used in the previous year will be carried forward to the next year up to a limit (as per the policy variant).

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Conclusion

Reading and understanding your health insurance policy is important to making an informed decision. Once you purchase a policy, you will have it at least until the tenure is over, and you need to ensure that it covers all your medical needs and sometimes beyond.

This is by no means an exhaustive list, but it covers some of the basic points you need to check, preferably before purchasing but also during the free-look period of your policy.

After the policy is issued, if you find any errors or omissions in the document, you must contact your insurer immediately and rectify it as soon as possible.