7 Things to consider before you purchase health insurance
7 THINGS TO
CONSIDER
BEFORE YOU
PURCHASE
HEALTH
INSURANCE
WRITTEN BY DOOSHIMA DAPO-OYEWOLE
Health Insurance is cover for individuals to seek
medical treatment when they are ill. This type of
insurance can be provided in 3 ways: 1) through a
policy you pay for yourself, 2) as a benefit from the
company you work for, or 3) from your government at
a subsidised rate. Lack of Health Insurance is a fiscal
burden on people and their families and can cause
worse health outcomes. (Urban Institute, 2007)
While no one plan’s to get sick, at some point in
time you will need to visit a doctor. What happens, if
something problematic is discovered? Who will bear
the costs for your medical treatment? Unfortunately
most of us tend to only think about questions like this
when the need arises, and by then it’s too late.
Following the global outbreak of Covid-19, it is clear
that countries who took early preventative action
saved lives. An age-old saying goes “ A stitch in time
saves nine.” The time to think about and understand
medical insurance cover for yourself and family is
now.
This is my take on 7 things to consider before
purchasing a health insurance policy.
1. Assess what your main medical
concerns are.
Do you have any pre-existing
conditions or a family history of
cancer, diabetes or cardiac problems
that will need routine monitoring? Are
you planning a pregnancy to expand
your family in the near future? This is
important; because when you take out
a health insurance policy you will be
medically underwritten. What this
potentially means is your insurer
might exclude you from receiving
certain kinds of treatment after
purchase for a period (possibly 12-24
months) or indefinitely. Taking time to
assess your medical concerns prior to
purchase will ensure you don’t fall into
the common trap of not being able to
use your policy due to exclusions.
2. Make a list of Healthcare facilities you
frequently visit
Do they accept insurance as a method of
payment? What insurance companies do they
currently have relationships with? This is
important, because as a cost savings measure,
insurers build relationships with healthcare
providers to negotiate discounts for their
customers. There is no point in buying a policy
to only discover you can not use it at your
preferred health care provider or worse, get
slammed with a heavy bill because your
insurance provider does not cover treatment at
the location you received care. If you have just
moved to a new country/city and have no
preferred health care network, ask potential
insurers for a list of hospitals covered in their
network. Make a shortlist based on what is
most important to you (proximity to your work
or home, reputation of consultants, online
reviews etc.).
3. Consider what level of cover and
benefits would suit your current
lifestyle.
Are you a frequent traveller who
needs cover in various countries?
Are you comfortable receiving
treatment in a general ward or
would prefer a private room? Do
you want a policy that covers your
outpatient consultations and
prescriptions or just in-patient
hospital admissions? Would you
want an annual health check
covered by your policy? These are
important details to consider before
purchase.
4. Which value-added services are
important to you?
In today’s competitive business
environment, insurance companies
stand out to customers by the value
added services they offer. Value
added services on your policies
could be things like, a
complimentary retail shopping
voucher once you purchase a plan, a
24/7 customer care line, access to a
virtual doctor/telemedicine service
or a promise to process your claims
and payments in a certain number
of business days.
5. Consider options to reduce total costs.
Purchasing health insurance is a risk
transfer mechanism. To reduce your
potential for loss from medical bills you
will have to pay a monetary premium
to company. Consider what changes
you can make on your policy to reduce
costs. This could be by adding excess
on your policy (in certain countries
this is also referred to as a co-pay or
deductible). A policy excess is an amount
deducted from each claim that you
will be responsible for paying. If you
have a policy with a $200 excess, and
receive a hospital bill of $500, you will be
responsible for paying $200 of the bill
and your insurance company will pay
$300
6. Research your potential insurance
company.
The Internet provides us a wealth of
information at our fingertips. Find out if
you can, what is their claims payment
ratio/turnaround time? Have members of
their senior management team been
sanctioned for malpractice in the past? Is
there any public information on the
company’s financial stability (this will
determine if they can pay your claims
when the time comes)? Finally research
online reviews from other customers and
how they respond to them-it is unlikely
you will find only positive reviews but
how they handle negative feedback is
telling.
7. Review your policy documents.
This is not an exciting task, but it is
imperative you read the fine print of
your policy documents/handbook/offer
and ask questions. Not every risk is
insurable and the devil is in the details.
Reviewing this information helps you
understand how your potential insurers
define certain words and situations.
What is their definition of a medical
condition or uninsurable risk? What
actions by you could invalidate your
policy? In light of Covid-19 many will
discover insurance policy wording
usually does not cover the outbreak of a
pandemics, as losses of this nature are
hard to calculate.
This document is for information
purposes only. Please seek out a licensed
insurance professional or broker in your
country that is registered by the
insurance regulator or institute to
discuss your particular circumstances
Dooshima Dapo-Oyewole is a Nigerian/Ugandan
risk management professional, interested in
technology as a tool for transformation and
financial literacy. She is certified in general
insurance and a member of the UK Chartered
Insurance Institute. She is the host of “Insuring
our Future” a risk management podcast for
millennial’s