The new year’s arrival is the perfect time to reflect on your financial priorities. One crucial aspect of this planning is investing in a comprehensive health insurance policy to safeguard your finances during medical emergencies. However, navigating various health insurance options can be confusing, especially with terms like deductibles, exclusions, and riders. Missteps in choosing a plan can derail your financial security and leave you exposed during emergencies.

As you create your New Year resolutions, ensure that your health insurance choices align with your financial goals. Here are some common mistakes to avoid when purchasing or renewing your health insurance policy in 2025.

1. Opting for insufficient coverage

A policy with a low premium but inadequate coverage can be detrimental during emergencies. Comprehensive health insurance should cover hospitalisation, pre- and post-hospitalisation expenses, and daycare treatments, and offer a cashless treatment facility across a wide network of hospitals.

Without sufficient coverage, you may face out-of-pocket expenses during medical emergencies, undermining the purpose of insurance. Review your family’s healthcare needs and ensure your policy provides all members the right level of coverage.

2. Ignoring policy exclusions

Understanding what your policy does not cover is as important as knowing its benefits. Policy exclusions can include:

• Maternity care
• Critical illness
• Dental treatments
• Cosmetic surgeries
• Outpatient Department (OPD) services

Before purchasing a policy, carefully review the exclusions to avoid surprises during claim settlement. Knowing these limitations ensures you are prepared for uncovered expenses.

3. Choosing unsuitable add-ons

Add-ons and riders enhance the features of your base health insurance policy, offering additional coverage such as critical illness benefits, room rent waivers, or maternity coverage. While these can add value, opting for unnecessary add-ons increases your premium without providing meaningful benefits.

For example, choosing maternity coverage when you do not plan to start a family shortly is an avoidable expense. Select add-ons that align with your current health and life stage requirements.

4. Focusing solely on low premiums

While affordability is important, selecting the cheapest policy can lead to insufficient coverage or poor service. Policies with very low premiums may have:

• Limited coverage for critical illnesses
• High co-payment clauses
• Poor cashless hospital networks

Balancing affordability with comprehensive benefits is crucial. Evaluate factors like claim settlement ratios, network hospitals, and sum insured before finalising a policy.

5. Overlooking medical insurance tax benefit

One of the significant advantages of medical insurance is the tax benefits it offers under Section 80D of the Income Tax Act. You can claim deductions on the premiums paid for yourself, your family, and your parents. For individuals below 60, the maximum deduction is Rs 25,000 annually, and for senior citizens, it goes up to Rs 50,000.

Ignoring these benefits means missing an opportunity to optimise your financial planning. Ensure that your policy aligns with your tax-saving strategies.

6. Hiding pre-existing conditions

Disclosing pre-existing conditions while buying health insurance is mandatory. Hiding such information to reduce premiums can result in claim rejections, leaving you financially vulnerable. Most policies have a waiting period for pre-existing conditions, so it’s best to choose a plan that offers shorter waiting periods for your specific needs.

Failing to disclose your medical history not only delays the claim process but can also lead to the cancellation of your policy.

7. Delaying health insurance purchase

Delaying the purchase of health insurance increases the likelihood of higher premiums and exclusions for illnesses diagnosed later. The earlier you invest in a policy, the lower your premiums and waiting periods will be. Moreover, buying insurance while you are healthy ensures comprehensive coverage without restrictions.

Procrastination may also leave you unprepared for sudden health emergencies, disrupting your financial stability.

8. Missing the renewal deadline

Failing to renew your policy on time can lead to the loss of benefits such as no-claim bonuses or coverage for pre-existing conditions. Always track your renewal date and review your policy to ensure it meets your current needs.

Consider updating your policy if there have been significant changes in your health or family structure, such as the addition of dependents.

9. Ignoring the insurer’s credibility

The reliability of your insurance provider is as critical as the features of your policy. Assess the insurer’s claim settlement ratio, network hospitals, and reviews from policyholders to ensure a smooth claims process.

Choose an insurer with a high claim settlement ratio and a robust hospital network for cashless treatments. Evaluating the insurer’s reputation minimises the risk of claim disputes during emergencies.

10. Poor assessment of coverage requirements

When selecting health insurance, many people underestimate their coverage needs. Inflation in medical costs means that a low sum insured today may not suffice for future expenses. Assess your healthcare needs based on factors like age, family size, and medical history, and choose a policy with adequate coverage.

For instance, if you have dependents, opt for a higher sum insured to cover potential hospitalisation and treatment costs for the entire family.

Also Read: Zyla Health Appoints Amar Sinhji to Advisory Board to Accelerate Innovation and Strategic Growth in Corporate Wellness

How to choose the right health insurance policy?

To avoid these mistakes, follow these steps:

1. Evaluate your needs: Consider your current and future medical requirements, including the possibility of critical illnesses or surgeries.
2. Compare policies: Research different plans to find one that balances premiums with comprehensive benefits.
3. Check the fine print: Review exclusions, waiting periods, and claim settlement processes before purchasing a policy.
4. Plan for tax benefits: Use medical insurance tax benefit facility to optimise your financial planning.
5. Stay informed: Keep track of renewal deadlines and review your policy annually to ensure it aligns with your needs.

Avoiding common health insurance mistakes is key to safeguarding your financial future in 2025. A comprehensive health insurance policy not only provides financial protection during medical emergencies but also offers tax benefits that align with your overall financial goals.

Ensure that your policy provides adequate coverage, includes relevant add-ons, and is supported by a credible insurer. By making informed decisions, you can create a safety net for yourself and your family, ensuring peace of mind in the year ahead.

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