Mistakes to Avoid When Buying Insurance in Pakistan - Smartchoice.pk

Mistakes to Avoid When Buying Insurance in Pakistan

Saving money is good and saving money on investments is better. People that shop around when looking for insurance coverage always end up saving money. However, don’t do this by just reducing insurance coverage or dropping important coverages. That will end up making your insurance policy just a piece of paper and a waste of your money.

Health insurance has never been more necessary in this time of rising costs. It is critical financial protection in case of unforeseen medical emergencies. While there are many risks to not having any health insurance policy at all, there are also some mistakes that people make when buying health insurance.

Whether you are in the insurance market or already have it, you don’t need to be told that proper coverage is an important pillar of personal finance, providing much-needed protection for those who depend on you. But with all the coverage options available, and costly errors common, it might just help to explore some of the biggest mistakes people make when purchasing policies of their own.

Before you buy it, you need to understand the health insurance policy and its terms and conditions. This will ensure that you have an effective plan that will actually benefit you and not be a lost investment. Don’t run the risk of being seriously underinsured and on the hook for much bigger bills in the event of a medical situation.

Here are some of the top common mistakes to avoid while buying health insurance in Pakistan:

1. Not Doing Your Research about Policies

Most people are not well-versed with insurance terms and usually buy a life insurance policy without a full understanding of the policy features and terms. If you do not make an informed decision when you purchase or renew a life insurance policy, you might end up with a policy that is not suitable for your requirements. Most people also end up paying a higher premium than needed.

Many others buy health insurance in a hurry or rely on word of mouth. Everyone’s needs are different, so you need to look for a plan that suits your needs.

Compare different policies and understand the items they cover and their respective premiums.  Also, get an average of your medical requirements and expenditure in the past years so that you can pick a suitable policy.

2. Getting Inadequate Coverage

Another common health insurance mistake is that people often restrict their coverage. In order to save on premiums, many end up with plans with limited insurance coverage or a lower sum insured amount. At times people opt for health insurance for the sake of it or to qualify for tax benefits. However, you will be missing out on the benefits of a comprehensive health insurance plan.

While this kind of coverage seems beneficial in the short term, you will have to pay out-of-pocket at the time of a medical emergency, adding to your financial burdens during a crisis.

You can avoid this by checking that the health insurance policy you select offers adequate coverage for all your medical needs and includes essentials like critical illnesses, pre- and post-hospitalization expenses, and annual health check-ups. Additionally, ensure that you choose a sum insured amount that provides for all your needs. With the right coverage, your health insurance will help ensure your financial security

3. Not Selecting Add-Ons

Linked to the point above, many people also do not opt for the many add-ons they can add to their policy. This is because they have to be added separately and require additional premium payments.

A standard health insurance plan does not cover specific medical situations, so having these covers can make a difference to your insurance coverage.

Look at the add-on covers offered with your insurance policy, and choose the ones that might be helpful for you, your family, or your plans for the future. Some key covers are Maternity cover, Critical Illness cover, or Personal Accident cover.

4. Depending on Employer Insurance

Nowadays, most employers cover their full-time, permanent employees through a group medical policy. Many usually don’t bother to get additional health insurance for themselves. But, such group policies may not provide coverage for your needs. In addition, if you lose your job or retire, you will end up not having any cover at all.

Investing in a customized health insurance policy is advisable to get additional coverage and financial security regardless of your employment status.


5. Not Disclosing Your Medical History

A number of buyers make the error of concealing their medical conditions when picking a health plan. This could be due to fear of rejection, longer processing times, or high premiums. However, doing this can be very unfavorable. Your insurance claims can be denied due to existing conditions or undisclosed medical information at a time when you are in desperate need.

But not being honest can cause more harm than good. If you lie on your insurance application, there’s a good chance the insurer will find out the truth during a medical exam or by accessing your medical records.

Health insurance policies work best when there is transparency on all fronts. Make it a point to truthfully disclose your medical history at the time of buying your policy. You might have to pay a higher premium, but it will eliminate the chances of claim rejection in the future.

6. Ignorance of the Policy Document

A usual mistake many individuals make when buying health insurance is that they do not read through the policy’s terms and conditions. Every insurance policy comes with inclusions and exclusions, and while it is important to know what is included, it is just as important to understand what is excluded.

This can be a painful process, as reading through the fine print is painful. Go through the inclusions and the exclusions in your policy document, or what is covered and not covered under the plan, before buying it. Knowing these things is helpful in making an informed decision and will also help avoid any unpleasant surprises at the time of claim settlement.

7. Ignoring Insurance Sub-Limits

People often don’t know that there are sub-limits clauses in their health insurance or are just unaware of what they mean. A sub-limit is a pre-determined cap that is placed on parts of your claim amount by the insurer. These limits can be set on ambulance or physician charges, hospital room rent, treatment of specific diseases, and post-hospitalization charges.

At the time you make a claim, the insurer will only pay the amount specified in the sub-limit clause; anything above that limit will be paid out of your pocket. Because of this, sub-limits are many in policies with lower premiums.

Again, all of this will be avoided if you read through your policy document and review the sub-limit clauses it lists. Usually, these are listed under exclusions. If possible, try to buy a plan with higher coverage limits or lesser sub-limits.

8. Waiting Until You are Older to Invest in Health Insurance

At a young age, people are usually hesitant to get health insurance and put off this investment. The thought process is generally based on the assumption that they can wait to make this investment when they are older. However, no one can predict life and crises or medical emergencies. Starting insurance early in life means reducing your premiums and increasing your savings. Starting at a young age means that you avoid higher premiums based on older age.

Affordable and quality healthcare is still not available to many in Pakistan. This makes health insurance an essential investment. With so many options available, you need to be well informed to avoid making any mistakes while buying health insurance. Once you know what to look out for, you will be able to make a good choice and secure your future and well-being with the right health insurance.

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