Buying health insurance is one of the smartest financial decisions you can make for yourself and your family. Medical costs are rising rapidly in India, and even a short hospital stay can burn a big hole in
your pocket. Unfortunately, many people rush into buying health insurance policies without carefully reviewing the fine print—and this leads to unpleasant surprises at the time of claim.
If you are planning to buy a health insurance policy, it is very important to understand what to check before signing up. Here are the 4 most common mistakes to avoid when buying health insurance in India:
1. Agreeing to the Co-Payment Clause
A co-payment clause means that the policyholder has to bear a fixed percentage of the hospital bill from their own pocket, while the insurer pays the rest. For example, if your policy has a 20% co-payment clause and your hospital bill is ₹5 lakh, you will have to pay ₹1 lakh yourself.
Many buyers unknowingly accept policies with high co-payment clauses just because the premium looks cheaper. While the premium may be lower, the real problem arises at the time of hospitalization when your savings get drained due to co-pay.
👉 Tip: Always check if your health insurance policy has a co-payment clause. If possible, go for plans with zero or minimum co-payment, especially if you are young and healthy.
2. Ignoring the Room-Rent Limit
Most health insurance policies in India put a cap on room rent. For example, a policy may allow only ₹3,000 per day for room rent. If you choose a room that costs more than this limit, you will not only pay the difference in room rent but also proportionately higher charges for other services like doctor’s visits, surgery, nursing, etc.
This often results in a much bigger out-of-pocket expense than expected.
👉 Tip: Choose policies that have no room rent limit or at least a higher limit that matches the standard hospital charges in your city.
3. Missing the Network Hospitals
Cashless hospitalization is one of the biggest advantages of health insurance. However, this is possible only if you get admitted to one of the network hospitals tied up with your insurer.
Many policy buyers fail to check the list of network hospitals before purchasing a plan. Later, when they need urgent hospitalization, they find that their preferred or nearby hospital is not covered under the network—forcing them to go for reimbursement instead of cashless treatment.
👉 Tip: Before buying a health insurance policy, check the insurer’s list of network hospitals in your city. Make sure reputed hospitals near your home are included.
4. Not Looking at Claim Settlement Ratio
The Claim Settlement Ratio (CSR) shows the percentage of claims settled by an insurance company compared to the total claims received. A higher CSR indicates a better chance of your claim being approved without hassle.
Many people buy health insurance only based on low premium cost, ignoring the CSR. Later, they face delays or rejections in claim settlement, which defeats the very purpose of buying insurance.
👉 Tip: Always choose an insurer with a claim settlement ratio of 90% or above. This ensures reliability and peace of mind during emergencies.
Final Thoughts: Get the Right Guidance
Health insurance is not just about buying the cheapest policy—it is about ensuring complete financial protection during medical emergencies. By avoiding these 4 mistakes, you can save yourself from unexpected expenses and disappointment when you need coverage the most.
If you are unsure about which policy to choose, it is wise to seek expert guidance from a trusted advisor. At Xfundz, we help you understand the fine print, compare policies, and select the right health insurance plan that truly meets your needs.
Frequently Asked Questions (FAQs) About Health Insurance in India
Q1. What is the co-payment clause in health insurance?
A co-payment clause means that the policyholder has to bear a fixed percentage of the hospital bill, while the insurance company pays the rest. For example, with a 20% co-pay on a ₹1 lakh bill, you will pay ₹20,000 and the insurer pays ₹80,000.
Q2. Why is the room rent limit important in health insurance?
Room rent limits can affect not just the cost of the room, but also other hospital expenses like doctor’s fees and surgery charges. If you exceed the limit, you may end up paying much more from your pocket.
Q3. What are network hospitals in health insurance?
Network hospitals are those partnered with your insurer to provide cashless treatment. If you get admitted to one of them, the insurance company directly settles the bill with the hospital, saving you the stress of arranging money during emergencies.
Q4. What is a good claim settlement ratio for an insurance company?
A claim settlement ratio (CSR) above 90% is considered good. It shows that the insurer honors most claims quickly and fairly, giving policyholders peace of mind.
Q5. How do I choose the best health insurance plan in India?
To choose the right plan, look beyond just the premium. Check for:
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No or low co-payment clause
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No restrictive room rent limits
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Wide network of hospitals
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High claim settlement ratio
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Adequate sum insured for your family
It is also advisable to consult an experienced financial advisor like Xfundz to find a policy that truly suits your needs.
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