A Complete Guide to Health Insurance: When, why and how to buy one

Thanks to a clearer understanding and solid evidence, insurance companies are increasingly adding preventive healthcare to their services. More often than not, people talk about saving money for things like their kids' education, a home, or retirement. Rarely do they mention saving up in case they get sick and have to pay medical bills. But surprisingly, that's exactly what ends up happening sometimes. It's tough for many to see why they should get health insurance when they're feeling well. But those who do get it really believe in its importance. It's like having an umbrella for a rainy day that you hope never comes.

Health insurance is an agreement where the insurer promises to cover some or all of your medical expenses if you get sick or need surgery. Nowadays, with health problems becoming more common among people of all ages, having health insurance is seen as a basic part of managing your finances. A study by MetLife, focused on the Gulf region, found out that on average, people start needing disability claims around age 38. For critical illnesses, it's around 47. This just goes to show that having good insurance for everyone in your family is super important.

Policies and types

In Dubai and Abu Dhabi, every resident must have insurance, and many people get coverage through their employers. If you're lucky, your job might offer a really good medical plan that can pay for a lot of your medical expenses, maybe even up to a million dirhams or more, especially if you've been with the company for a while. But there are also people who don't have the benefit of a group plan, and they have to buy their own insurance by paying money from their own pockets.

Now, here's the thing: when it comes to insurance, there's something to be said for having your own individual plan. A group plan only covers you as long as you have a job that provides it. Imagine this: you get sick with a serious illness that takes a long time to get better from, and it makes it impossible for you to do your job. You might end up losing your job. And if you lose your job, getting a new individual insurance plan might be really tough, especially because of the illness you already have. That's why it's a smart idea to have your own individual insurance that doesn't depend on your job. This way, you're more protected.

Whether it's a group plan or an individual plan, the insurance helps pay for the medical stuff that's mentioned in the plan. This could include regular doctor visits, surgeries, and even care after you leave the hospital, depending on what the plan says. The amount of money you pay regularly for insurance, called premiums, depends on a bunch of things. These include how much the insurance will cover, any limits or extra rules, things that aren't covered, extras you might want like dental or maternity coverage, and most importantly, which hospitals you can go to. Sometimes, you can only use certain hospitals, and those can be just in your country, in the region, or even around the world. Plans that let you go to hospitals around the world, like in the US, are usually more expensive – around 40 percent more, on average. But the more you pay, the more benefits you get. It's kind of like you get what you pay for.

Policies are changing with digitalization

Thanks to better understanding and real-world proof, insurance companies are now adding preventive healthcare to what they offer. This means that people who are insured can now get health checkups and screenings either for free or for a small fee. The idea behind this is that it's cheaper for insurance companies to help you stay healthy now than to pay for bigger medical bills later when things get worse. This shift is actually benefiting both the people who have insurance and the insurance companies.

On a similar note, some insurance companies are thinking about covering experimental and alternative treatments to reduce risks. Things like reading your genetic code to find out if you're likely to have certain health problems, making 3D-printed organs for transplants, and focusing on mental health are becoming more important in the world of health insurance.

A few insurers have already started using technology to create personalized insurance plans for their customers. If you're okay with sharing information about your health and exercise habits, you might get special bonuses in your insurance plan. This shared info helps insurance companies figure out how risky it might be to insure you. They also get data from devices like smartwatches and fitness bands, which lets them offer more coverage for lower costs by taking on more risk.

Points to remember

Over the past ten years, the renewability of insurance policies has become a big topic of disagreement between people who have insurance and insurance companies. Some insurance companies promise that you can renew your policy every year without any issues. Others have the right to say no, but they usually use this right in specific situations, like if you made a big claim in the last year. Not having the option to renew becomes a problem, especially for older people or those who have been diagnosed with a serious illness. Being sick might make it tough for them to get new insurance. Some bigger insurance companies, especially the ones that work internationally, will let you keep renewing, but you'll have to pay more each year – like around 7 percent more, depending on things like inflation and how old you are.

For people who are worried about policies that can be canceled, there's something called critical illness (CI) insurance. This type of insurance guarantees that if you're diagnosed with a serious illness listed in the policy, you'll get a lump sum of money. This can help make up for the money you might lose because you can't work during your illness. It could also cover things like care after leaving the hospital, getting treated in another country, or trying alternative medicine – things that regular health insurance might not cover. So, getting CI insurance adds an extra layer of protection to your financial plans.

Another thing to think about is co-insurance, which is when you have to pay a part of your medical bill. For example, if you have 25 percent co-insurance, you pay 25 percent of the bill, and the insurance company pays the rest. If you want a lower co-payment, you'll have to pay more for your insurance premiums. You also need to keep in mind deductibles before you get an insurance plan. Deductibles are the amount of money you need to pay before your insurance starts covering you. Different policies might have different deductibles, like starting at Dh10. This is to stop people from making small claims for tiny issues. If you want a policy with no deductibles, it will usually cost you more in premiums.

Lately, insurance companies have become stricter because they've had to pay out more claims. Things have also changed after the pandemic. The rules about what's included and what's not in insurance policies have changed a lot. So, it's really important, to be honest when you're telling the insurance company about your health before you sign up. Even if you don't tell them everything and they find out later, they might not pay your claim. All these complicated things can be much easier to understand if you talk to an insurance middleman or a financial advisor.

News Source: Khaleej Times