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Common Mistakes Indians Make When Purchasing Health Insurance

By Juhi Walia
21 October 2022, 1:03 PM

While there are many risks associated with having no health insurance at all, there are some mistakes people frequently make while purchasing health insurance. Hasty decisions may cause people to select an ineffective health insurance plan that may not fulfil their objectives if they are not correctly informed about the implications of a health insurance policy and its clauses. 

Before purchasing a health insurance policy, it will help if you know all of its terms and conditions to select a viable option that will serve your needs and not become a costly mistake. Here are some errors to avoid when purchasing health insurance in India-

Common Errors Made When Choosing Health Insurance and Ways to Avoid Them

Not Looking Towards Alternative Policies 

Many people choose to get their health insurance in a rush or based on the advice of friends and relatives. However, because one person's needs vary from another's, you must seek out a plan that meets your requirements.

You can accomplish this by evaluating the coverages and premiums of several policies and comparing them. To obtain good coverage that meets your demands, attempt to anticipate your medical needs and expenses for the foreseeable future.

Obtaining Insufficient Protection

People often compromise on coverage. Many choose insurance policies with limited coverage or a smaller sum insured amount to pay a lesser premium. However, even though this type of coverage could appear advantageous in the short term, you will have to spend out-of-pocket in case of a medical emergency, increasing your financial difficulties.

Verify if the health insurance policy covers the necessary coverage for your medical requirements. Additionally, be sure the insurance amount you select will cover all your financial and medical demands. 

Choosing Only a Basic Cover

Some people only purchase health insurance to comply with taxes or for the sake of having it. The advantages of a complete health insurance plan, which will provide more coverage, may be lost in such circumstances.

A comprehensive health insurance plan's premium is worth a little bit more than its inexpensive alternative. You will have thorough protection this way, and financial security even in trying circumstances.

Not Considering Riders

Apart from not acquiring comprehensive coverage, many consumers fail to consider the health insurance riders that can be added to their policy. However, choosing these options might significantly improve your healthcare because a typical insurance policy does not protect against certain circumstances.

Examine the rider coverage options included with your insurance policy and select the ones that can benefit you, your family, or your future goals. 

Depending on Your Employer's Insurance

Many salaried workers nowadays are protected by and rely on their employer's group medical insurance plan. However, this type of policy can not offer enough protection, and if you unexpectedly lose your job or retire, you won't have any coverage.

Regardless of your employment situation, purchasing a supplementary health insurance policy is advisable to provide you with more protection and financial stability.

Keeping Your Medical History Hidden

Many people make the error of misrepresenting their medical history when purchasing a health plan. They usually do this for fear of rejection, waiting too long, or paying too much. However, doing so may be harmful because your health insurance claims may be rejected when you most need them because of pre-existing conditions or medical information that was not revealed.

The most effective health insurance policies are those that are entirely transparent. Therefore, don't be scared to be transparent about your medical history while purchasing your coverage. Then, although the premium may be higher, there will be no chance of a future claim being denied.

Neglecting the Need to Read the Policy Document Thoroughly 

When purchasing health insurance, many people also neglect to read the terms and conditions of the policy. It's critical to understand what is covered and what is not.

Before you purchase a policy, carefully read the inclusions and exclusions in the agreement to determine what is and is not protected by the plan. Awareness of these factors reduces the likelihood of unpleasant surprises throughout the claim settlement process.

Not Considering the Sub-Limits

People usually forget about or are unaware of the sub-limits clause in health insurance. A sub-limit is a predetermined cap the insurer imposes on a portion of your claim's total. As a result, the insurance provider will only fund up to the sub-limit amount when you can only make one claim; you must pay any sum over that. As a result, sub-limit health insurance policies typically have cheaper premiums.

Review the sub-limit provisions in your policy document by reading the entire thing. They are typically listed under exceptions. Purchase a policy that, if at all possible, has greater coverage limitations or none at all.

Not Considering Co-payments

Many consumers might consent to choosing a larger co-pay to reduce their overall premium payment. But they frequently overlook that the co-pay represents the portion of the claim amount. The co-pay clause may not be a concern when one is young and healthy, but at one age or if there is a medical emergency, it may become problematic.

While some health insurance companies require co-payments, others allow it voluntarily. Look for a business that doesn't mandate co-payments if at all possible. When deciding whether to choose a co-pay or not, thoroughly analyse your financial and medical problems.

Putting Off Purchasing Health Insurance Till Later in Life

Young individuals frequently hesitate to purchase health insurance when they are young and believe they may put off making this investment until they are older. No one, however, can foresee medical emergencies. And not having insurance when you're young can cost you money later in the form of expensive premiums and a loss of savings.

When you purchase health insurance when you are young, your premiums will be lower. Additionally, you will be capable of enduring the waiting periods while still in good health and even receive incentives for years without filing a claim.


Despite considerable economic development in recent years, many people still lack access to cost-effective healthcare. Because of this, purchasing health insurance is crucial.

However, with multiple choices available today, you must be well informed to prevent errors while purchasing health insurance. Knowing what to take care of will help you choose wisely and find the best health insurance to protect your future and welfare.

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1. What justifies my early purchase of health insurance?

Young people are the most optimal age to purchase health insurance (ideally in your 20s). Then, your premium will be far lower, and you can finish any waiting period while you're still in healthy condition.

2. What should I think about before purchasing health insurance effectively?

  • Check your health insurance coverage to see what is and is not covered.
  • Choose the appropriate level of coverage and sum insured based on your age, medical demands, and other factors.
  • Do not withhold any pertinent data or medical history from your insurance provider.
  • Add several riders to your health insurance policy for improved coverage.
  • Purchase health insurance as soon as possible.

3. Why do Indians choose to forgo health insurance?

India's market for health insurance is still expanding. However, most people don't purchase it because of a lack of awareness. Another reason why people choose not to buy it is thought to be its high price.

4. How can I select the best health insurance plan while avoiding mistakes?

You can compare health insurance policies online with ease. Ensure the plan includes the coverage required, the correct sum insured, a simple claims procedure, and a reasonable premium. 

5. Why do most people avoid choosing to purchase health insurance?

  • Lack of knowledge
  • Health insurance approached unconvincingly
  • Myths concerning affordability
  • High costs for health care
  • Unable to fund necessary medication
  • Losing savings
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