Learn Top Five Health Insurance Myths from Vital

Dangers In Disguise: Busting The Top Five Health Insurance Myths

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Health insurance today has emerged as one of the most critical part of our financial planning; although it remains the most misunderstood and least researched decisions we usually make. In most cases most of us suffer from the following misconceptions with regards to health insurance myths.

Health Insurance is not for younger people

To put it very bluntly most of us believe in our “invincibility” when we are young. i.e. in general if you are below the age of 45 and not suffering from any health condition you would most probably consider yourself to  be impervious to any illness or disease. However with the advent of lifestyle diseases, increased trends of infections as a fallout of globalization (ex: the H1N1 virus), the unpredictability’s of the occurrence of cancers it is now an obvious fact that it would be fallacy to ignore health risks which may befall us. To consider some facts over heart disease now commonly occurs in individuals between ages of 35 to 40 years, diseases such as cancers can occur at any age and across all segments.

Further what is more important to consider is that insurance plans are not designed to guarantee a payout but are designed to adequately cover a chance of payout occurring i.e. in other words risk of illness occurring. Hence in case, we wait until illness befalls us it would be a mistake to assume that insurance companies would readily accept you as part of their health coverage. Hence basically waiting too long to obtain health coverage would lead to the risk of not being accepted into the insurance fold due to the dual reason of older age or existence of an illness disease.

Hence considering the above reason it is more advantageous to ensure you adequately ensure coverage early in life to ensure a hassle free lifelong coverage in the future. Further as per regulatory guidelines the insurance companies are now obliged to ensure continuity of cover for life once you have been accepted under the plan.

Health Insurance covers all medical expenses

Health insurance plans today come in all shapes and size, while choosing a health insurance do make sure to notice all the details and also make sure what the plan actually covers. Plans such as critical illness insurance plan offering lump sum amount on the occurrence of certain critical illness/disease such as heart disease, cancer etc, hospital cash products that offer you fixed benefits for hospitalization and in some cases events such as surgeries are some of the new plans present in the market.

However today the most popular plans in the market are hospitalization reimbursement plans commonly known as “mediclaim” with most insurance companies offering a variant of the same. In most cases, the plan essentially covers all major expenses that incur in case of hospitalization and reimburses you for the actual expenses incurred however there will always be expenses such as expenses for artificial limbs, external aids, and certain types of treatment which will not be covered. Further, the plan may have certain conditions on coverage such as sub-limits for a certain procedure, restrictions on the type of hospital rooms that can be availed, copays or deductible which require you to pay for part of the expenses. Therefore to avoid any unpleasant surprises at a later stage it is most advisable to spend time reading the policy terms you receive with your policy.

Health Insurance premiums remain the same year-on-year

Expenses related to hospitalization, cost of medication, and utilization of services have definitely risen through the years, a more popular term to indicate the above phenomenon  is “medical inflation”. As health insurance covers expenses related to health, the impact of rising costs will definitely impact the premiums associated with the product over the years. Further as one grows older the risk associated with health also rises this is gain expressed in rising premiums as per age. Having illustrated reasons for increase in premium what must also be noted is the frequency of premium changes and the steepness with which your premiums rise would be dependent on the stability and good management of the insurance company. If your plan is showing frequent increases in not only your premiums but also adjustment in age based rates quite frequently you should be vary of the same.

A group health insurance cover is enough for individuals

Today health insurance is offered by most employers however complete reliance on this coverage may not be a very prudent move. We must remember a few facts that this coverage will remain with you as long you remain employed a job change, retirement may definitely lead to a ceasing of these benefits. 

Further, as already stated above as reaches an elderly age the barriers to obtaining a cover would further increase due to the risk associated with elderly ages and the onset of pre-existing illnesses. Further in addition with health insurance premiums rising many employers have begun relooking plan designs with restrictive conditions to control premiums charged, or ensuring employee contributions to the premiums to reduce the impact on costs.

Health Insurance will take care of every hospitalization expense

So you have health insurance and you can pay attention to getting better rather than worry about expenses associated with health expenses. However what we also must understand is that any expenses incurred during an hospitalisation will definitely impact the overall claims experience for the insurance company, which would then in turn increase the premiums in the future. So do pay attention to the expenses incurred to ensure that the hospital does not overcharge you just because you have health insurance. 

The closing note:

When selecting a health insurance plan do remember “you get what you pay for” so while selecting a health insurance plan that is one of your main support systems at the time of your greatest need, do go through your plan details to know what it offers so you know your getting your money’s worth.

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2 comments

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