8 mistakes to avoid while purchasing health insurance
Before diving into the intricate world of health insurance, it is important to understand how it works and, more importantly, what it covers and doesn’t cover. While purchasing health insurance, many individuals end up making certain unintentional mistakes that can result in out-of-pocket expenses during emergencies and claim denials. Keep reading to learn more about the common mistakes to avoid while buying health insurance.
- Not knowing the terminologies
One may misread or misinterpret a health insurance plan if one cannot comprehend the complex insurance and financial terminologies. Spend time learning the definition and scope of important insurance terminologies like-
- Not listing requirements and affordability
Buying a health insurance policy without a proper plan or review is a big mistake. List down the number of members in one’s family, health risks, if any, and the age of each member. Understand how much a hospital charges for different healthcare treatments and services. Arrive at a coverage cost based on potential future healthcare-related expenses.
- Allowable charge
- Benefit and benefit level
- Claim
- Coinsurance
- Copay
- Coverage amount
- Deductible
- Effective date
- Exclusions
- Pre-existing condition
- Premium
- Provider network
- Not comparing multiple policies
Sometimes, friends or family members recommend certain insurance plans, but one should not opt for the same without researching it beforehand. One should also know about the types of government and private insurance plans besides the ones offered by one’s employer. Many insurance companies and financial websites allow one to compare prices of different insurance plans based on a member’s age and the coverage one wants. Once there is a clearer picture, it becomes easier to choose the right plan.
- Choosing a plan based on premium rather than coverage
Choosing a plan based on low premiums is another common mistake. A low premium policy may provide only basic coverage and may not cover critical illness, hospitalization expenses, regular health exams, or the cost of prescriptions.
- Opting for basic coverage
Many opt for basic coverage, assuming they are in good health. Basic coverage plans are restrictive and may result in out-of-pocket payments for sickness or hospitalization. One may have to pay more for comprehensive coverage plans, but it would still be less than out-of-pocket expenses and may offer more extensive benefits.
- Not verifying provider coverage
Always check if one’s insurance plan covers the hospital or clinic one visits or within one’s locality. Suppose the chosen plan doesn’t include one’s hospital in its network. In that case, one should travel to a new, unfamiliar hospital covered in the plan and pay for hospitalization and treatment.
- Not disclosing accurate medical history
If an individual or one of their dependents has an existing condition to save on premium, hiding it at the time of purchase can lead to claim rejection if they need treatment for the same in the future.
- Not reading the fine print before purchase
A policy document often displays coverage amounts, premium details, and details of the members. But a plan may run through many pages, with details on exclusions, penalties, and causes of claim rejections printed towards the end in small print. Never buy a plan without reading the fine print to avoid facing any unexpected penalties or rejections in the future.
