Buying health insurance is still a little understood area for most people. But it is important that they try to learn how the mediclaim system operates and make the best use of it, according to speakers at a Moneylife Foundation seminar

The cost of healthcare is galloping and with insurance firms lobbying to increase their premiums, it is becoming more essential for those seeking to buy insurance to have a better understanding of how to go about it. This was the simple consensus at a well-attended seminar on "How to get the right health insurance cover at the right price", hosted by Moneylife Foundation today.

"Buying health insurance is like getting into a marriage," said Mahavir Chopra, head-eBusiness and Personal Lines at Medimanage. "Because, it's usually difficult to find the perfect product for all your requirements just like it is impossible to find a perfect match in marriage." Medimanage is a dedicated health insurance broking firm.

Mr Chopra explained that if insurance companies were to provide everything that a customer requires, the cost of such a product would be way higher and unaffordable. Hence, he emphasised it is essential to focus on getting the major burden covered instead of trying to get many more items included.

In this respect, he listed the following issues to be kept in mind: The younger you are you have more choices; it is desirable to look for the basics and cut out the frills; clearly understand the inclusions and exclusions as described in the policy; it is necessary to go long term and keep the maximum renewal age in mind; knowing the company from which you are buying the insurance.

Mr Chopra also cautioned against making comparisons of any sort, whether it is between public and private companies, or between policies and premiums.

Sudhir Sarnobat, co-founder and CEO of Medimanage, pointed out that medical insurance in India is restricted to hospitalisation coverage and needs to evolve to preventive healthcare. For instance, no insurance covers routine health checkups, whether it be eye, dental, or any periodical tests.

"You must be hospitalised for a minimum 24 hours; you should have taken active treatment; and there should be major diagnosis, to substantiate any insurance claim today," Mr Sarnobat explained. "The company will verify family history, symptoms, investigations before making the payment of the claim."

He also referred to the careless attitude towards medical insurance wherein people wait to fall ill before actually bothering about getting insurance. "They think 'I am healthy, I will buy when I need it'." Like in life insurance, there are those who also expect payment even in claim-free years, he pointed out.

Mr Sarnobat explained that with the breakup of the joint family system, an increase in lifestyle diseases, the increase in individual income levels and the choice in health insurance products, individuals should not hesitate to spend on the cost of mediclaim. Or, better still focus on preventive care by improving one's lifestyle.

Introducing the subject at the opening of the seminar, Debashis Basu, trustee, Moneylife  Foundation, said healthcare costs are galloping at 20% per annum, which is twice the rate of inflation. Insurance companies, unable to cover costs, were lobbying for an increase in premiums. In this harsh demand-supply health insurance environment, the biggest victims were senior citizens, individuals, employees of small and medium enterprises, consultants, who could not benefit from group health insurance schemes.

In fact, less than 15% of the population have some form of healthcare. He stressed that while insurance is for unforeseen contingencies and not an investment for returns, more and more people should get themselves insured.