Top 7 Pros and Cons of Personal Health Insurance

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Personal health insurance is also known as retail health insurance which can be purchased on an individual or a family floater basis. Individual basis is where each member can avail different sum insured or same sum insured and floater basis is where the sum insured would be floating among the family members. Here are the pros and cons of personal health insurance policy:-

Pros:

  • Hospitalization Expenses – The personal health insurance policy would cover all types of hospitalization expenses such as inpatient hospitalization, out patient Hospitalization, day care expenses etc.
  • Alternative treatments –The personal health insurance policy would cover the expenses incurred on alternative treatments such as Ayurveda, Yoga Unani Siddha and Homeopathy.
  • No claim bonus – The personal health insurance policy would offer no claim bonus in the form of enhanced sum insured for every claim free year.
  • Addition of family members – The addition and deletions of family members can be done under the personal health insurance policy by giving intimation to the insurance company. The addition happens due to the occurrence of a certain event such as marriage or child birth.
  • Cashless claim settlement – The major Benefit of personal health insurance policy is the cashless claim settlement facility that it offers to its customers.
  • Lifelong renewal – The personal health insurance policies usually come with a lifelong renewability.

Cons:

  • Medical tests – The major disadvantage of a personal health insurance policy is the medical tests one has to undergo for higher sum insured. For lower sum insured the insurer would ask for tele medicals or the underwriting would be done on the basis of the proposal form.
  • Difficult to get for senior citizens – It is very difficult to get a personal health insurance policy for senior citizens as most of the insurance companies keep many rules and regulations for providing health insurance to senior citizens except for the senior specific health insurance policies.
  • Co-pay – There would be Co-pay for senior citizens in the personal health insurance policy which makes it less attractive. Co-pay can range from 10% to 50% in the personal health insurance policy.
  • Disease wise capping – The personal health insurance policy would have disease wise capping in certain situations which means there would be sum insured sub limits for each disease.
  • Waiting periods – The other disadvantage of personal health insurance is its waiting periods. The waiting periods may range from 1 year to 4 years.
  • Premium increase with age – The premium under personal health insurance policy would increase with increase in age and the increase would not be a straight line. For higher age the premium increse would be higher and after certain age the increase in premium would be very high.
  • Sum insured extension – The sum insured extension would not be possible during the policy period if one exhausts the sum insured during the policy period.

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