Top Mistakes to Avoid When Buying Health & Term Insurance

Choosing the right insurance is essential for peace of mind, yet many people rush through the process or overlook important details. Health and term insurance serve different purposes, and understanding their features, benefits, and exclusions is key. Taking the time to evaluate these options carefully ensures you are well-prepared for life's unexpected events.

Why Should You Invest in Health Insurance and Term Insurance?

Health insurance helps manage rising medical costs, while term insurance ensures that your family stays financially protected. Here's a breakdown of the key features of each:

Key Oversights to Avoid When Buying Health Insurance

Health insurance serves as a support system to manage healthcare costs efficiently. However, people often make decisions based solely on the premium or reputation of the provider. Let’s take a closer look at what matters.

• Ignoring the Scope of Coverage

A common oversight is failing to check what the policy covers. Many assume all expenses are covered, only to realise later that outpatient care, diagnostics, or post-hospitalisation costs are not included. Always read the list of inclusions and understand what kind of medical treatments are covered.

• Choosing the Lowest Premium Without Comparing Benefits

It’s natural to look for affordable plans, but the cheapest one may not always offer enough benefits. A low premium could mean higher co-payments, limited network hospitals, or fewer day-care procedures covered. Balance affordability with sufficient protection.

• Not Checking Network Hospitals

Cashless treatment is one of the most helpful features of health insurance. Yet, many skip checking the list of network hospitals. Always ensure your preferred or nearby hospitals are included. This can save both time and money during a medical situation.

• Missing the Waiting Period Clause

Most plans come with a waiting period for pre-existing illnesses or maternity cover. If you miss this detail, you may not be able to claim for certain treatments immediately. Check waiting periods before purchasing the plan to avoid surprises.

• Overlooking the Claim Process

A complicated claim process can lead to delays during critical times. Before buying, see how the insurer handles claims, whether it’s online, how responsive their support is, and what documents are needed. A smooth claim process is just as important as good coverage.

Mistakes People Make While Choosing Term Insurance Plans

Term insurance is designed to secure your family financially in case of an unfortunate event. It’s a simple product, yet the details matter. Avoiding these mistakes can help ensure your family gets the right support at the right time.

• Underestimating the Coverage Amount

Many opt for lower coverage to lower their premiums. However, the amount should be based on your financial goals, the needs of your dependents, existing loans, and inflation. A basic rule is to go for a sum assured that is at least 10 to 15 times your annual income.

• Short Policy Duration

Choosing a short term may leave your family uncovered during later years. It’s best to select a term that covers your working years and any major responsibilities. For most, a policy that lasts till retirement or till children are financially independent is ideal.

• Not Disclosing Health Information Honestly

Omitting medical history or lifestyle habits to get a lower premium may seem harmless. But it can lead to claim rejections. Always provide accurate information. Insurers conduct medical checks, and undisclosed conditions may arise later.

• Choosing Riders Without Understanding Them

Riders like critical illness or accidental disability can be valuable. But they also increase your premium. Evaluate which add-ons are relevant for your life stage and profession. Don’t add everything blindly; read what each rider offers and choose accordingly.

• Buying Without Comparing

Many people purchase the first policy they encounter, often through a bank or insurance agent. However, different insurers offer different terms, claim settlement ratios, and features. Use comparison tools or consult a financial advisor to evaluate multiple plans before making a decision.

How to Choose the Right Insurance Plan for Your Needs?

Insurance should not be a one-size-fits-all solution. Your age, income, family size, and health history play a big role. Here’s how to make sure you’re on the right path.

• Start Early

The earlier you buy, the better the premium and benefits will be. Starting young also helps you complete waiting periods before health conditions arise. With term plans, younger policyholders get higher coverage at lower costs.

• Consider Add-Ons and Riders

Riders can add to the value of your insurance plan without needing a separate policy. For health insurance, add-ons such as critical illness or maternity coverage may be beneficial. In term insurance, riders such as accidental death or waiver of premium can offer extra protection. Choose based on your lifestyle and specific needs.

• Review Your Policy Periodically

Life changes, and so should your insurance. Review your cover every few years. Got married? Had children? Taken a home loan? Ensure that your policies accurately reflect your current responsibilities.

• Choose a Trusted Insurer

Go for insurers with a strong claim settlement ratio, good customer support, and transparent processes. Price matters, but trust and reliability during difficult times matter more.

Health and term insurance are powerful tools that bring peace of mind and financial support. But getting the most out of them means making informed decisions. Understand your needs, read the fine print, and compare options before making a commitment. The right plan is one that truly works for you and gives you confidence for the future.