5 tips to reduce your health insurance cost

With rise in medical costs surpassing general inflation, getting a treatment/surgery or illness treated in a hospital requires an enormous financial surplus or an alternative financial arrangement. Harjot Singh Narula offers simple tips to reduce these costs

Illustration: Dominic Xavier/Rediff.com

An alternative financial arrangement is best summed up as buying a HEALTH INSURANCE PLAN to cope with the growing healthcare expenses.

Health insurance plan offers you a wide coverage of policy benefits which include expenses related to in-patient hospitalisation (room rent, ICU expenses, nursing and boarding expenses, etc.), day-care procedures, pre- and post-hospitalisation, domiciliary expenses, out-patient hospitalisation, etc. which are covered under the policy. However, the benefits vary from insurer to insurer and plan to plan.

The statistics suggest that only 18 per cent of the urban population is covered under any type of health insurance schemes or plans.

One of the major reasons for such low penetration is the health insurance premium cost which makes it expensive for a customer to buy a plan within her/his budget which makes her/him defer her/his plan of buying a health insurance.

Let us understand and throw some light on the quick 5 tips which can allow you to reduce your health insurance cost making it an affordable buy under your budget.

Opt for the right sum insured

Buying a right amount of cover is important. Buying more than required and buying less than required, both conditions pose a problem. If you are over insured, you will pay a higher premium or if you are under insured, you will pay the bills out of your pocket due to inadequate coverage.

If you are young and healthy, the probability of getting hospitalised due to some major illness or disease is low as compared to a person who is at an advanced stage. Depending on your age and health condition, opt for the right sum insured under the policy considering inflation element in mind.

Opt for voluntary co-payment

Co-payment is the portion of the admissible claim which is to be borne by the policyholder in case of a claim. There is voluntary and compulsory co-payment clause under health insurance plans.

If you are young and healthy, voluntary co-payment can be opted to avail discount on premium as the probability of a claim arising in policy is lower in case of healthy individuals.

Example: If you have opted for co-payment of 20 per cent, usually an insurance company will give you a discount of 20 per cent on the premium.

The reason being, the policyholder will also be cautious about claiming unnecessary expenses during hospitalisation, as part of the claim amount is to be voluntarily borne by the policy owner.

Opt for online health plan

You can avail 10-20 per cent discount on health insurance premium by purchasing a policy online. Purchasing a health insurance plan online will save your money.

Online insurance plans are comparatively cheaper than offline insurance plans. The fundamental reason behind this is, in online insurance plans, the insurance company does not pay any commission to the agents or other intermediary and the company transfers that portion of saving to customers who are buying a health plan online.

Also, the policy issuance process is simple and quick.

Opt for a long policy term

Usually, a health insurance plan has a policy term of one year, which needs to be renewed to enjoy policy benefits. But there are health insurance plans which offer you a policy term of 2 years or 3 years.

The benefit of opting a long policy term offers you a discount on premium up to 5 per cent to 15 per cent depending upon the insurer and the health plan.

Also, long policy term will cover you for a longer duration at a minimum cost.

Opt to include the members of your family

There are multiple insurance companies which offer an additional reduction in premium by offering a family discount. If you include your spouse or dependent children under the health plan purview, you can avail a reduction in premium cost by 10 per cent to 20 per cent.

It is important to do a thorough analysis before making a final decision. The cost of a health plan or premium is an important aspect which cannot be overlooked before making a final buying decision.

But it is also imperative to compare and analyse the health insurance policy coverage, key features, value added benefits, sub limits, exclusions, terms and conditions, etc., in order to make a prudent decision.

Harjot Singh Narula is founder and CEO, ComparePolicy