Healthcare insurance is undoubtedly one of the most difficult products to evaluate. With so many different plans on the market and vast coverage plans that stretch from the absolute bare minimum to plans that give you 5-star treatment, consumers should be mindful of the important factors that make up a health insurance plan. There are a few widely used terms in the insurance industry which are important to understand.
The premium of a health insurance plan is the amount of money that is paid by the policyholder to the insurer. In general, the higher the premium amount, the better or more extensive the health coverage. Premiums are calculated in a few different ways but the key factors include age, gender, current and previous health risks, location and whether the plan will be per individual or family wide.
Maximum Annual Limit
This term refers to the maximum amount the insurer will pay for all benefits in a year. If one plan advertises an annual limit of AED 500,000, it means under all combined claims in a year, they will not pay more than this amount, and the policyholder will have to cover the rest. Insurance companies might use different terminologies such as sum-assured or yearly cover, but every plan comes with a limit. There are many options on the market, with yearly coverage ranging from as little as AED 100,000 to AED 10 million. When comparing health insurance plans, it is important to understand that the higher the maximum annual limit, the higher the premium.
Room Rent Limit
Room rentals from hospitals can be a very crucial item when considering different plans. The same exact treatment at a hospital, administered by the same exact doctor, could cost up to 50% more depending on the type of room that is chosen. Typical options include shared rooms, private rooms or even hospital suites. Many plans will only cover a certain amount (for example AED 750 per night), so you could end up pay a significant sum from your own pocket each night.
No medical insurance coverage will start immediately after purchase, which is important to keep in mind. There is usually a pre-determined waiting period that is administered before claims can be made. There are two different waiting periods that insurance companies enforce depending on the situation. Initial waiting periods mean you are out of coverage for the first 30 days, except in the case of hospitalization due to an accident. Exclusion waiting periods mean that certain procedures or disorders are not covered for a specified amount of time, usually somewhere in the neighborhood of 1 to 3 years. It is important to understand the implications of the waiting and exclusion periods before purchasing a plan so as not to be disappointed when the insurance company refuses coverage due to these reasons.
Waiting periods apply when you are signing up for a new plan, but are not a factor for health insurance renewals. Therefore, you should take the waiting period into consideration if you are thinking of changing your insurance provider.