Why bother with a health coverage when you are young and healthy? Well one clear reason is because if you leave it till you are sick and needy you probably won’t qualify or may have to pay a large sum as premiumThis is the amount you pay for keeping an insurance policy active. Usually paid in a lump sum at the start of the policy term or annually through the term, it includes all the charges and levies by the insurance... More. Health coverage is not a maybe it’s a must have.

Watch my interaction with Vivek Rege, CEO and founder VR Wealth Advisors to know why.

Whether you opt for a MediclaimUnlike a health insurance policy, a Mediclaim pertains mainly to recovery of hospitalisation costs and to claim benefits, you must be hospitalised or admitted for treatment. More policy or a health insuranceA comprehensive policy that covers for medical and surgical expenses that you incur. This includes hospitalisation expenses, pre hospitalisation expenses and other expenses incurred for all the illnesses covered in the policy. More, be mindful to check on these top 5 in the fine print.

Five things to evaluate a health cover

1. Cost
2. Sub-limits and waiting period
3. Exclusions
4. Pre and post hospitalisation expense cover
5. No claim bonus

1. Cost

The premiumThis is the amount you pay for keeping an insurance policy active. Usually paid in a lump sum at the start of the policy term or annually through the term, it includes all the charges and levies by the insurance... More you pay versus the coverage you are getting is the first check you must do. Many of us like to go for the product that has the lowest cost, however, in this case – cheaper may not equal better. The idea of taking on a health cover is to pass on the financial risk that comes with a medical emergency to the insurance company. Which means the company will also have its conditions before giving you the option to pass on that risk.

As a first step you have to check the coverage you are getting for the premiumThis is the amount you pay for keeping an insurance policy active. Usually paid in a lump sum at the start of the policy term or annually through the term, it includes all the charges and levies by the insurance... More you are paying and whether it is appropriate for you and your family.

2. Sub limits and waiting period

If you have some pre existing medical conditions, the policy will define a waiting period before which you can claim any expenses incurred on treatment. This waiting period varies for each insurance policyAn insurance policy gives you the right to reimbursement or payment from an insurance company for losses agreed up on in a defined contract. A life insurance policy for example, needs the insurance company to evaluate a claim on the... More. You also have to check which other procedures are included under a waiting period. In some policies hospitalisation costs have a 30-60 day waiting period. Sub-limits apply to specific expenses that the policy covers. Any health policy will specify what all it covers like hospital room rent, doctor’s fee, OT charges and so on.

Each of these is likely to have a sublimit. As Rege points out in the video, if your room sublimit is too low you may not be able to access that private air-conditioned room you were hoping for.

3. Exclusions

All health cover policies will have some in built exclusions. These may include certain types of treatments or even certain types medical conditions and costs. For example, you should check whether treatments related to congenital or birth related illnesses are covered. Also, usually treatment outside India will not be covered. For better understanding of what you can or can’t claim always look up the exclusions.

4. Pre and post hospitalisation expenses

These expenses are important to the overall spend on a medical emergency. Usually the pre hospitalisation expenses on tests can be comparatively higher than what you would pay for post hospitalisation expenses. You must check how many days of pre and post hospitalisation expenses the policy covers, it could be 30 or 60 days and so on. As a thumb rule, a longer coverage for pre hospitalisation expenses may be more suitable.

5. No Claim bonus

As explained by Rege in the video, there are two categories for no claim bonus. One type is where a percentage of the sum assuredSum assured is the amount you are insured for. In case of insurance for inanimate objects, the sum assured is what you will get and reduces as goods age or their depreciated value changes. In case of life insurance, there... More gets added back to the total coverage – thereby, increasing the coverage by that amount. The second type is where you get a discount on the premiumThis is the amount you pay for keeping an insurance policy active. Usually paid in a lump sum at the start of the policy term or annually through the term, it includes all the charges and levies by the insurance... More. If you think about medical expenses, it may be more advantageous to have a policy where the no claim bonus comes in the form of increased sum assuredSum assured is the amount you are insured for. In case of insurance for inanimate objects, the sum assured is what you will get and reduces as goods age or their depreciated value changes. In case of life insurance, there... More as medical expenses are only likely to go not come down.