Health insurance plays an integral part in achieving your financial goals. Apart from covering your life against any unfortunate event, it also provides the peace of mind that your loved ones will not have to suffer financially after an unfortunate event. Making a mistake while investing can be rectified, but you only buy health insurance once. If your health insurance plan goes wrong, your whole financial future will be severely jeopardized.
Here are the most common ten mistakes people make while buying a health insurance plan, and what you can do to avoid committing them :-
- 1. Inadequate cover :- People tend to buy a health insurance plan which they think will be light on their pocket. What they miss to understand is the insufficient and low amount these health insurance plans provide in the event of an eventuality. In the case of an actual emergency, this low number proves to be inadequate for covering the medical and hospital bills, thus creating a financial burden on the family. It is therefore advisable that you buy a health insurance plan that comprehensively covers all of your future healthcare needs.
- 2. Health insurance for tax benefits :- Buying a health insurance plan only for the motive of saving tax always leads to an idea having an inadequate insurance cover. It is true that the premium you pay towards your health insurance is tax deductible under section 80D, but the sole purpose of a medical insurance plan should be to cover your expenses in case of an emergency and not tax benefits.
- 3. Lying about the medical background :- For fear of the insurance company rejecting their insurance application, people tend to lie about their medical history by concealing relevant information. Hiding information about existing medical condition could lead to rejection of your claim when the insurance company gets to know the truth. You should positively reveal all the information about your health history while buying a health insurance.
- 4. Too much cover :- Before buying an insurance policy you should reconsider the cover you are getting in the insurance plan. Taking too much health insurance will lead to pricey premiums and lapse of the policy if you are unable to pay them.
- 5. Not comparing health insurance plans :- How would you know what is best for you without looking at different alternatives? Everyone has different needs and financial background. Buying a health insurance policy only because it is the same scheme your friend or your relative has bought would be a grave mistake. You should always purchase a health insurance plan after assessing your future needs and comparing different policies with each other to know what plan would be a perfect fit for you.
- 6. Not adding “Riders” :- To some extent, it could be true that you are healthy and don’t need to visit a doctor regularly. However, what can be said about accidents and illnesses? Riders provide you with extra insurance amount if you suffer from an accident or illness mentioned regarding the rider. You should always consider adding a rider to your health insurance plan as you can never anticipate accidents and critical illnesses. This would provide you with an extra amount apart from your insurance cover, to pay the expensive medical bills of the hospital.
- 7. Young people do not need insurance :- While it may be true that young people are healthier, it is also true that buying a health insurance plan should be the primary priority of everyone, irrespective of the age. As life is full of uncertain events, they do not choose between young and old. You should consider buying a health insurance plan even if you are in your 20s or 30s.
- 8. Not reading the policy terms :- People make a big mistake when they skip on reading the terms and conditions of the policy and find out something years later that negatively affects their whole financial plan. It is important that you read the fine print of the policy in detail to get a general idea of what you are buying and how it will affect you in the future.
- 9. Buying an additional policy :- People buy an additional health insurance policy to extend their coverage further. In the long run, this does not cost efficient and leads to small savings. If you want to extend your protection, you should avail the option of " Top up" which will allow to you prolong the coverage of your existing policy.
- 10. Disclose accurate information :- Anything and everything that you think can have a bearing on your health insurance must be disclosed to the health insurer. Often times, people hide details about their pre-existing medical conditions in fears that the health insurer will not extend the coverage. If and when the insurance company finds out that a policyholder has withheld necessary information, they have the complete right to reject the policyholder’s claims. So when you, the policyholder, approach an insurer for a health cover, it is your responsibility to ensure that all necessary information such as past illnesses, smoking habits, income etc. are conveyed.