How to compare health insurance plans without being misled by the premium

Two health policies with the same sum insured and similar premiums can settle the same hospital bill very differently. The variables that produce that difference are not hidden, but they are rarely the ones displayed prominently on a comparison page.

Room rent limits, and why they cost more than they appear to

Many policies cap the room category you may occupy, either as a rupee amount per day or as a percentage of sum insured. Exceeding it does not simply mean paying the room difference. Because hospitals often scale other charges to the room category, a proportionate deduction can be applied across the entire bill - surgeon's fees, anaesthesia, nursing, procedure charges.

The effect is that a modest room upgrade can reduce settlement on a large bill by a substantial margin. A policy with no room rent capping, or with a single private room entitlement, is worth a meaningful premium difference.

Co-payment

A co-pay is a fixed percentage of every admissible claim that you bear. Senior citizen plans commonly carry 10 to 20 per cent. Some policies apply co-pay only in certain cities, or only for treatment outside the network, or only above a defined age.

It reduces premium visibly and reduces settlement invisibly. On a ₹8 lakh hospitalisation, a 20 per cent co-pay is ₹1.6 lakh out of pocket - which is the whole point of having bought insurance.

Disease-wise sub-limits

Some plans cap what they will pay for specific procedures regardless of sum insured - cataract surgery, joint replacement, hernia repair, cardiac procedures are the usual candidates. A ₹10 lakh policy with a ₹40,000 cataract sub-limit is a ₹40,000 policy for cataract.

Sum insured is what the policy promises. Sub-limits are what it actually pays.

Restoration and no-claim benefits

Restoration reinstates the sum insured once it has been exhausted in a policy year. Read whether it restores for the same illness or only for an unrelated one, and whether it applies to the same insured person or only to others on a floater. For a family floater, restoration is genuinely valuable.

No-claim bonus in health insurance increases the sum insured for each claim-free year, often by 10 to 50 per cent up to a ceiling, without an increase in premium. Cumulative bonus that reduces after a claim is common; check by how much.

The network, and what cashless really depends on

Cashless treatment requires the hospital to be in the insurer's network. Before buying, check that the two or three hospitals your family would actually use are listed - not that the network is large. A network of 12,000 hospitals is irrelevant if the one down the road is not among them.

Claim settlement performance is worth looking at, but read it carefully. A high settlement ratio across all claims tells you less than the insurer's record on the kind of claim you are likely to make, and on how long settlements take.

The rest of the checklist

Pre and post-hospitalisation cover, usually 30 and 60 days, sometimes 60 and 180. Day-care procedures, which no longer require 24-hour admission. Domiciliary treatment. Ambulance limits. Organ donor expenses. AYUSH cover if relevant to you. Consumables cover, which addresses the non-payable items list that produces most of the residual bill.

Lifetime renewability is not optional - avoid any policy with an exit age. And check the entry age limits for adding dependants, particularly elderly parents.