Reasons for the Failure of Health Insurance Plans?
Updated On Jan 31, 2024
The basic purpose of owning health insurance is to duly attain a sufficient amount of financial assistance whenever a medical emergency emerges. Sometimes, several individual insurers complain that the health policy possessed by them didn’t serve them adequately despite paying hefty premiums. This generally happens when either the insurer denies the claims or insurance plans can’t offer adequate coverage. Sometimes, insurance-providing companies are at fault, but in many cases, policyholders or the erroneous buying process becomes the cause.
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Reasons for Health Insurance Policy Failure
Check the reasons to consider while buying a health insurance policy which are mentioned below:
1. 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, despite having a health policy, a policyholder may go through financial crises. 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.
2. Lack of knowledge about 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 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 a 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.
3. Bad choices made in a hurry
The vast majority of people are ignorant of the availability of diverse health insurance company 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.
4. Buying the policy without comparing
When it comes to insurance purchases, insurance agents generally emphasize 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.
5. Considering health insurance merely 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 coverage and so on. In such situations, people might need to suffer huge monetary troubles during a medical crisis, despite procuring medical coverage.
Conclusion
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.
Also, Read:
Factors to Check Before Renewing Your Health Insurance Policy
