Relevant Reasons That Lead to the Failure of Health Insurance Plans?
Published On Apr 08, 2019 5:30 AM By Gunjan Anand
The basic purpose to own health insurance is to duly attain a sufficient amount of financial assistance whenever a medical emergency emerges. Sometimes, a number of individual insurers complain that the health policy possessed by them didn’t serve them adequately despite paying hefty premiums. This generally happens when either insurer denies the claims or insurance plans couldn’t offer adequate coverage. Sometimes, insurance providing companies are at fault, but in many cases, policyholders or the erroneous buying process becomes the cause.
Pertinent reasons for health insurance policy failure
- Less premium & inadequate coverage
Observing the growing inflation in the medical sector, it is necessary to buy bigger health coverage than required. In the absence of an adequate cover, the best plan in the market couldn’t be termed as a value for money product. For example, an insurance policy of Rs 3 Lakh cover would immediately fail to function if an insured member falls prey to serious medical emergencies such as heart surgery, brain surgery, etc., which may cost around Rs 6 Lakh and above. Thus, in spite of having a health policy, a policyholder may go through financial crises. Actually, many people think that purchasing a plan with a lower premium is better, but it’s not, as it can lead to more expenses than paying a higher premium amount.
- Lack of knowledge pertaining to the health plan
Generally, people show disinterest in gaining more and more knowledge about their policy. They don’t look keen to go through the policy wording properly. However, to avail the policy to the fullest, you need to know your rights and must understand as what you are investing in. This can be understood as if a plan acquires a waiting period provision for 2 years, according to which, some pre-existing illnesses will be covered after 2 years only. But, if the policyholder goes for the treatment of pre-existing illness and applies to a claim later, it will get rejected for sure. In short, if a policyholder uses a plan without having complete information about its clauses, the probability of claim rejection will increase.
- Bad choices made in a hurry
The vast majority of people are ignorant of the availability of diverse health insurance plans in the market as well as the offerings that come along with them. Individuals just focus on buying their health plan, thinking it will secure them for a particular period, without even having a clear idea about it. This prompts an inaccurate, inappropriate health plan acquired in a rush. This happens due to two reasons, one is lack of knowledge and another is insurance experts’ influential marketing techniques.
- Buying the policy without comparing
When it comes to insurance purchases, the insurance agents generally pay emphasis on selling without considering the client's desires, needs, and necessities. They more often concentrate on making the individuals purchase their health insurance policies with which they can gain higher commissions. Consequently, not making comparisons between different policies before finalizing the one and purchasing the plan as suggested by the agent may prompt disappointment later on.
- Considering health insurance mere a tax saving too
A significant number of people consider health insurance plans as just a tax saving instrument to save money by enhancing the tax benefits. This leads the individuals to entirely focus on the amount of premium to be paid without considering how helpful the plan will be in actuality. A policyholder might think that he or she has purchased an incredible health plan as it has a low premium to pay, even if the policy may exclude important features like pre-existing illness cover and so on. In such situations, people might need to suffer huge monetary troubles during a medical crisis, in spite of procuring medical coverage.
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Keeping these errors in mind and paying heed while buying a health insurance policy will ensure that your plan may deliver the best offering and benefits amid a medical emergency.