Top 7 Reasons Behind Failure of Health Insurance Policies
The primary purpose of health insurance is to provide financial coverage in case of a medical emergency. However, even after buying health Insurance and paying a hefty amount as premiums, many policyholders complained that their health plan didn’t serve the requisite purpose. It usually happens when a particular insurance company rejects the policyholder’s claim or does pay sufficient money to cover their medical expenses. Although sometimes insurance companies are at fault due to a lack of transparency, many times, the problem might be with the policyholders or the insurance purchasing process. Here in this article are some significant reasons behind the failure of health insurance policies.
1) Low premiums
Almost all people prefer buying health insurance policies with lower premiums to save money. But the fact they don’t understand is that with lower premiums, there come lesser benefits. The best health insurance policy usually charges a reasonable premium and provides more than the required benefits. Health plans with lower premiums might not cover certain diseases, surgical charges, pre and post-hospitalization expenses, daycare expenses, and more. In such a case, health insurance will be just a piece of paper with no financial benefit.
2) Inadequate coverage
Now that healthcare costs are rising, it is always better to purchase a health insurance policy that provides more financial coverage than required. However, people often buy health insurance policies with insufficient coverage, mainly due to a lack of knowledge. Therefore, the sum insured by such policies might not be enough to meet the financial needs of an insured.
For instance, if financial coverage provided by an insurance policy is Rs 4 lakh. However, if medical expenses incurred by the policyholder are Rs 7 lakh, they would face difficulty paying the remaining amount (Rs. 3 lakh) despite having health insurance.
3) Lack of knowledge
Since health insurance is still an evolving industry, many people don’t have enough knowledge of health insurance plans and options available to them. Usually, people in India buy the first health insurance plan they come across without going into detail. However, to reap the benefits of the right health insurance plan, an individual must know his rights and what they are investing in that policy.
For instance, an insured person might not know the term waiting period used in the health insurance plan. The waiting period implies the duration for which a policyholder can’t claim coverage. For example, suppose the waiting period of a health insurance policy is one year. However, due to a lack of knowledge, the policyholder raises a claim before the expiry of one year term. In such a case, the claim will be rejected by the insurer. Therefore, a policyholder must know the terms and conditions of a health insurance plan before investing in it.
4) Buying health insurance for tax exemption
Several people consider buying a health insurance policy to save money by reaping tax exemption benefits. Due to this, people focus on the amount to be paid as a premium for availing of tax exemption benefits rather than considering how beneficial a health plan can be.
For instance, according to a person, the best health insurance allows them to pay a lower premium to save on taxes. However, when buying such insurance, they do not consider checking the sum insured or the illness covered by the policy. The fact is that such health insurance plans can cost more in the future.
5) Ignoring terms and conditions
The terms and conditions mentioned in the health insurance plans are technical, and many people find it boring to go through them. However, not knowing your rights and responsibilities could make it impossible for the policyholder to reap the maximum benefits of the best health insurance in India.
For example, a health insurance policy has mentioned a clause that it is the policyholder’s responsibility to disclose every minor to severe detail about their health condition. But the same policyholder fails to do so, which leads to the rejection of the claim in the future. In such a case, the insurer can and will reject the claim, and the insured won’t be able to do anything about it.
6) Purchasing an insurance policy without comparing
Many people are lazy enough to find out about different health insurance plans available in the market and buy the wrong product. Individuals should consider their requirements before purchasing a health insurance policy.
Once you know what you want, you should consider looking for health plan options available to fulfil your needs. In this digital era, it is comparatively easier to find necessary information about different health insurance plans online. So make sure to compare different health insurance policies and choose the best one for you or your family.
7) Non-submission of required documents
An insurer provides health insurance only after knowing all necessary details about the policyholder, such as age, monthly income, job stability, existing diseases or illness, current insurance plans, and more. Whenever an individual files a claim, the best health insurance company in India asks the policyholder to submit required documents attesting to the given details and that they have undergone specific medical treatment.
If the policyholder’s documents are insufficient or not in order, then the insurer has the right to reject the claim. Therefore, a policyholder must always submit the required documents when raising a claim.
If you want to reap the maximum benefits from your health insurance policy, you should be wary of the listed reasons. Knowing these reasons will prevent the rejection of a claim when faced with a medical emergency. Since your health and financial condition are at stake, ensure that you are extra careful when buying a health insurance plan.