Health Insurance in 2025: What to Look for and How to Decide
Health Insurance in 2025: What to Look for and How to Decide
Blog Article
Chapter 1 - Importance of Health Insurance
Imagine this!
You are carefully driving on the road and all of a sudden some vehicle from the opposite direction comes and hits yours. You are severely injured and rushed to the medical emergency ward of a nearby hospital.
I know this is a nasty thing to imagine, but we all know that such a thing can happen to anyone. A medical emergency can arrive anytime without even a warning or a sign.
This is where your health insurance policy can save you by taking care of all the medical expenses without you or your family having to worry about it. And that is why it is important to have good medical insurance, to protect you and your family financially from such medical emergencies.
One question which arises here is which health insurance should one buy. Frankly speaking, there are so many options available in the market that one is spoiled for choice. But at the same time, with so many options available, it becomes incredibly difficult to choose one.
If you are stuck in a similar situation where you are unable to narrow down your choices on health insurance, you can get in touch with us at Algates Insurance. You can also read our guide on how to renew your health insurance policy to stay informed about the renewal process.
From our experiences in the past, we can say that such calls take around 30 to 45 minutes of time as we need to discuss many important factors before we are in a position to suggest an appropriate plan. So please bear with us and choose a time slot which permits you to talk over the phone for at least a half hour.
Chapter 2 - Finding Your Requirements
Moving on to how you can find a good health insurance plan for yourself, start with the very basic thing. What do you want your health insurance plan to do for you?
Are you looking for a plan which covers your pre-existing diseases?
Or Are you a young family with all family members less than 45 years of age looking for comprehensive coverage?
Or Do you want cover for senior citizens such as your elderly parents?
Or Are you looking for a special plan which provides cover to people with a history of (say) Heart Ailment or Cancer?
Asking these questions to yourself will help you decide on the type of plan you should be looking for.
If you are a young family where each member is less than 40 or 45 years old, you can opt for a family floater plan with comprehensive coverage. This will turn out to be cheaper as you become eligible for a floater discount and will be easy to manage.
If you have senior citizens in your family or family members with pre-existing conditions, it is good to take separate policies for such members depending on their medical requirements and health condition. This is a need
based approach and would be more cost-effective too.
Another aspect is to decide your cover amount. This is important because this is the maximum amount that you can claim from your insurer in a policy year irrespective of the hospital bill. If your hospital expenses exceed this cover amount, the rest comes from your pocket.
While there is no exact formula to calculate this amount, according to a rule of thumb, you should have at least 2 times of your annual income as cover amount. So if your annual income is (say) Rs. 5 Lakh, a health cover of Rs. 10 Lakh should be good enough for you.
But there are other factors which should be looked at. For example, the city you live in and the kind of hospital near you where you would like to get your treatment done. If you are living in a metro city or the top hospitals in your locality are expensive, you should opt for a higher cover amount.
If you want a plan specifically covering critical illnesses like cancer, explore whether cancer insurance is a must in 2024 to decide better.
Chapter 3 - Plan Benefits
Once you have decided on the cover amount, you should look at the benefits which you want your health insurance policy to offer. Now there are health insurance plans in the market offering various benefits, some claim that they have 20 benefits while some other claim to offer 30 benefits. So we are again spoilt for choice.
But there are essentially these 5 benefits you should look for.
[1] Number one is in-patient hospitalisation and this is by far the main benefit of any health insurance policy. This happens when you are hospitalised continuously for more than 24 hours.
Now there are various costs which you will incur when you are hospitalised such as
Room rent
Doctors’ Fee
Surgery Cost
Nursing Charges
Medicine Costs
Etc.
And here your cover amount should ideally be able to cover all these expenses so that the bill doesn’t spill over to your pocket.
[2] Next important benefit that you should check is day care procedures. These are procedures where you are required to stay in the hospital just for a few hours. These can include
Cataract Removal
Knee Replacement
Appendectomy
Etc.
These are usually procedures which one is more likely to have in relatively older ages. So it is very important to check this benefit when you buy a policy for a senior citizen.
Many health insurance plans have a list of day care procedures which are covered by them. The idea is to look for a plan which covers all or a high number of day care procedures.
Another important thing is to check the limit or capping on these day care procedures. Some plans cover cataract up to Rs. 20,000 per eye, Knee Replacement up to Rs. 50,000 per knee, or Kidney Stone Removal only up to say Rs. 30,000.
It would be ideal to have a plan with no such sub-limits where all procedures are covered up to sum insured. This would go a long way in ensuring that you get access to the best treatment possible.
[3] Some plans put a restriction on the daily room rent limit which is way lower than your cover amount. Typically it is around 1% of the sum insured.
This means that if you have a plan with a sum insured of Rs. 5 Lakh, you can opt for a room which costs a maximum of Rs. 5000 per day.
But when you go to the hospital you find out that there is a more comfortable suite room with more amenities which is costing Rs. 10000 per day, you opt for that room assuming that you will have to only pay a difference of Rs. 5000 in the room rent for your each day of stay in the hospital.
But what you will have to pay in the end will blow your mind.
When you upgrade your room from Rs. 5000 a day to Rs. 10000, all your other charges such as doctor’s fee, surgery cost, nursing charges etc. also double up.
Since your policy only covered rooms of up to Rs. 5000, you will not be eligible for this proportionate increase in other charges which happened due to room upgrade. And you will have to pay a significant portion of your bill out of your own pocket.
So it is very important to bear these 2 things in mind.
Either buy a plan which has no room rent restrictions
Or
Stay in a room which is fully covered under your health insurance policy.
[4] Back in the day, medi-claim policies only covered in-patient hospitalisation expenses. But health insurance in India has evolved to a great extent in the last 10 to 15 years.
One important benefit covered by health insurance plans these days is pre and post hospitalisation expenses. These are expenses you incur before and after your exact period of hospitalisation such as cost of diagnostic tests,
follow up consultation charges,
post hospitalisation care at home etc.
While a standard health insurance plan typically covers 60 days and 180 days of pre and post hospitalisation respectively, some even cover them for a lesser number of days. Important point to see here is that these expenses should not have amount-wise sub-limits built in and should be covered up to sum insured.
[5] Some health insurance plans come with restrictions or sub-limits on certain treatments or day care procedures. For example, even if you have taken a policy with a sum insured of Rs. 5 Lakh, your policy might just pay up to a maximum of Rs. 50,000 per eye if you go for a cataract surgery. Obviously such restrictions are not desirable and so you should look for a plan which comes without them.
However, if you already have a health insurance plan, make sure you know about these restrictions in advance. Not knowing these sub-limits can cause you heartburn at the time of claim.
Some plans come with restrictions like copayment or room rent limits. If you're unsure about how these work, read copayment, deductibles, and room rent limits explained for clarity.
For those considering LASIK eye surgery, check if it’s covered under your health insurance policy in our ultimate guide to LASIK eye surgery.
Chapter 4 - Exclusions
As much as you should know what is covered under your health insurance policy, you should also know what is not covered under it.
All health insurance plans come with certain set of exclusions which include
Time bound exclusions which are called waiting periods
And Permanent exclusions
Now 3 types of waiting periods are more common and almost all health insurance plans have them.
First one is the Initial Waiting Period which is usually 30 days. This implies that you do not get cover within the first 30 days of buying your health insurance plan for the first time. So if you raise a claim due to any illness within this period, your insurer will reject your claim. But in case you are hospitalised due to an accident within these initial 30 days, you are eligible for a claim.
Second is the waiting period for pre-existing diseases which is usually of 2 to 4 years in most plans. The idea is to try to get a lower waiting period for PEDs when buying a policy. Some insurers offer to lower this waiting period if you buy an add-on by paying some extra premium. However, if you do not have any pre-existing illness, this clause is something which should not bother you.
Third is the waiting period for named illnesses which is typically 2 years long. This includes a list of specified illnesses which are slow-growing and hence their treatment can be planned well in advance such as hernia, piles, kidney stone etc.
Some plans offer certain complimentary benefits but with waiting periods such as
Maternity benefits
Dental benefits or even
Free Annual health checkup
Now there are some exclusions which are permanent in nature and your plan will never cover them.
These can include
Alternative Treatments
Cosmetic treatments
Treatments that do not require hospitalisation
Congenital Disorders
Pregnancy and Childbirth
Etc.
As I have told you before, it is always good to check what is not covered under your plan.
To understand exclusions better, refer to our detailed article on what is not covered under your health insurance policy.
For specific situations like maternity, read Maternity Insurance – All You Need to Know to understand its coverage and waiting periods.
Chapter 5 - Cashless Hospitalisation
One of the important things to check which is not limited to the plan but the insurer is its network of cashless hospitals. This network of hospitals ensures that you get cashless treatment when you are hospitalised.
You do not have to pay your bill from your pocket and your insurer directly pays it to your treating hospital. But this happens only when you go for treatment to a hospital which comes under the network of your insurer.
So point blank, you should go with an insurer which has more network hospitals, especially in the area or city where you reside. And ideally, all the big and renowned hospitals in your city should come under the network of hospitals of your insurer.
Because if you have a health insurance plan, it does not make sense to compromise on the quality of healthcare service which you receive.
If you face challenges during claims, understanding what happens if your health insurance claim is rejected can prepare you better.
Chapter 6 - Other Benefits
Now there are some other benefits which are not must haves but are good to have such as
Cover for consumables or non-medical items
OPD cover
Maternity benefits
Dental Treatment
Wellness Benefits
No Claim Bonus
Automatic Recharge
Etc.
It is good to first shortlist plans which offer all the main benefits. And then filter out those among them which offer some extra or good to have features.
Think about it. If a health insurance plan comes with a lot of sub-limits, it doesn’t make sense to buy it even if it comes with a good no claim bonus feature.
Chapter 7 - About the Insurer
When you buy health insurance, it is important to choose a good health insurance plan for yourself. But it is as important to choose a good health insurer. Because it is the insurer who ultimately provides you services and pays your claims.
One important thing to check is Claim Settlement Ratio. While a high claim settlement ratio is desirable and indicates that the insurer settles most of the claims it receives, any number between 80-90% is decent for a health insurer.
Learn more about the claim settlement ratio (CSR) in health insurance and why it’s a critical factor to consider.
Chapter 8 - Premiums
The mistake which most people make is to jump to the premium first and start comparing the plans. But the idea is not to buy the cheapest plan in the market but the best plan which meets your needs.
So only after you have shortlisted a few plans based on your requirements, it makes sense to compare their premiums.
The premium depends on a few factors like
Age
No of members covered
Pre-existing diseases and health condition
Whether you want to lower your waiting period for PEDs.
Etc.
If you find the plans which you have shortlisted to be more expensive, you can make them more affordable using the following methods.
[1] Opting for a copayment or a deductible.
But please remember that if you opt for these, you will have to pay a portion of your hospital bill from your own pocket whenever it arises.
[2] You can also opt for a higher waiting period for your pre-existing disease.
[3] You can choose a lower sum insured in case you find your plan really expensive and unaffordable.
If you're unhappy with your current plan, consider porting your existing health insurance to find better options.
For those looking for additional coverage, adding a critical illness rider to your term insurance might be beneficial.
I know this was a lot of information so if you are still unsure about how to go ahead, you can talk to us at Algates Insurance. We will guide you to find the right health insurance cover for you and your family.
All you have to do is visit our website and book a call with us at a time which suits you the best. Our representative will call you at your preferred time - www.algatesinsurance.in