How to cut down on expenses with health insurance

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Health insurance is a financial saviour but a lack of clear understanding of the terms and conditions can lead to some out-of-pocket expenses for the policyholder. When buying health insurance plans, people usually connect with insurance agents or sales professionals who are eager to close the deal and hence suggest plans depending on what the customer is willing to pay. If one cuts back on benefits and features, the plan becomes pocket-friendly and is thus easy for the agents to close the deal. Due to lack of awareness, people buy such plans and suffer when the claim arises. So, here are a few factors one should consider when buying health insurance

Deductible is on top of the list. It is an upfront cost you pay before health insurance covers you. So, if you have bought a health cover of ₹10 lakh with a deductible of ₹1 lakh, then you have to first pay ₹ 1 lakh out of your own pocket every policy year before your policy starts covering you. Deductible can be used to lower your premium and make your policy look affordable, but its dark sides are seen when the hospital bill arrives and brings financial stress if you haven’t planned for this payment well. To tackle this financial stress, it is better to avoid health insurance which covers you with no such condition attached. If you still need to add deductible, then keep some emergency fund aside before opting for it.

Next is copayment. It is a fixed percentage of the claim that you agree to pay from your own pocket, irrespective of the claim amount. Generally, it is 10%, 20% or 30% of the claim amount. Many health insurance buyers opt for copayment without understanding its real meaning. And when the claim arises and they have to pay a huge amount themselves, they think