How do I choose a health insurance policy?

-Name withheld on request

The insurance premium is charged based on the current age and existing medical conditions of the customer. Since the chances of contracting any lifestyle diseases like Diabetes, Hypertension, High Cholesterol, etc. are less at a young age, buying a policy for your family early would be the wisest thing to do. This will ensure low insurance premium and comprehensive coverage which will help you avail quality healthcare services.

Before buying a health plan, evaluate the average medical hospitalization expenses in your city. You also need to take into account your salary and family medical history. Assuming that you live in a metro with your spouse and two children and do not have any major medical history, then choose a base family floater policy with a minimum sum assured. 1.5 million. The annual premium for this will be between 15,000 more 17,000. Insurers these days also offer the option of buying the policy in installments if you do not want to pay in one go.

Consider factors such as network of hospitals, claim settlement ratio of the insurer and availability of cashless facilities before selecting an insurer. Opt for a base plan that offers features like restoration of basic sum assured, pre and post hospitalization and advanced treatment. It would be an advantage if the insurer offers add-ons like double cover, change in room rent limit, vaccination cover, consumable cover, childcare cover and guaranteed cumulative bonus, as these covers can be useful depending on the medical requirements.

As an alternative, you can go for a base family floater policy and instead of add-ons, you can top up your base policy with a super top-up plan. This will ensure all the benefits of an advance plan but at a combined lower cost.

(This question was answered by Rakesh Jain, CEO, Reliance General Insurance. If you have any personal finance queries, write to mintmoney@livemint.com to get them answered by experts.)