Advantages and Disadvantages of Buying Health Insurance

Whether you are on the track of purchasing something expensive like a new house or something as mundane as new kitchen equipment, one concept maintains its constant presence – comparison. Weighing all pros and cons is an exercise that all buyers perform (consciously or subconsciously) whenever they set out to buy a certain product. more

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The same applies to health insurance, with the need for health insurance always being accompanied by a big question mark. This article will give a detailed analysis of all the advantages and disadvantages or limitations of health insurance uae plans and whether it is worth your money to get one. 

We will also discuss some tricks and tips to work around the limitations of health plans and the ways to use them to your advantage. 

The above plans and premiums are for AED 1,000,000 Sum insured for 1 Adult of 30 Years for Dubai city.

Advantages of Getting a Health Insurance Plan

Starting on a positive note, let’s first explore some of the most common advantages of purchasing a health insurance plan in the UAE for yourself and your family:

Makes Healthcare Affordable 

The biggest pro of health insurance uae plans is that they make healthcare highly affordable. Costs of healthcare have been rising corresponding to the improving medicine and healthcare system in the UAE. While this is a wonderful development in terms of the availability of medical services, it also means that the services are all that harder on the pockets of the common man. 

Health insurance plans make the expensive services significantly affordable for policyholders by covering a major chunk of the expenses. 

Fulfils Legal Requirements

Getting a proper health insurance plan is mandatory for all residents of the UAE. The Dubai Health Authority (DHA) has established clear guidelines regarding the minimum health insurance coverage required for all residents. These mandatory level health insurance plans are known as Essential Benefits Plan or EBP. Residents are free to choose any other plans available with the provider as per their requirements and cost-effectiveness. 

Brings Peace of Mind

As healthcare can be expensive, especially in case of a critical illness, having a health insurance plan can bring peace of mind by financially backing you up. Most health insurance plans cover the major portion of hefty hospitalisation, intensive care, medication, tests, and treatment expenses for all major illnesses. Not having to worry about bearing the treatment cost, on top of battling a disease, can be helpful both emotionally and mentally. 

Allows Cashless Hospitalisation 

Policyholders or insured members can easily access cashless hospitalisation benefit of health insurance plans to get hospitalised and initiate their treatment right away without worrying about upfront costs. Almost all health insurance plans available in the emirates offer cashless hospitalisation to insured members. 

If you have such an insurance plan, all you need to do is inform your insurance provider about the hospitalisation, get verbal approval, and take your insurance card to the hospital to get the costs covered directly. The insurance company, in such instances, pays the hospitalisation fees directly to the hospital, which allows you to continue your treatment without hassles and interruptions. 

Coverage for Pre-Existing Conditions

All health insurance plans in the UAE necessarily cover all pre-existing diseases with an applicable waiting period of 6 months to 2 years. This is a special benefit of health insurance plans in the UAE and is rarely found anywhere. 

This feature ensures that all your ailments will be covered properly regardless of when and at what age you purchase your plan. However, keep in mind that the premium amount will differ as per your current health conditions. 

Access to Network Hospitals 

Each health insurance plan comes with a network of hospitals that policyholders can utilise for cashless treatments. These hospitals can be visited to get any kind of covered medical services without upfront payments. Moreover, some health insurance plans are applicable worldwide, which means that the policyholder can access cashless medical services even when they are out of the UAE in a foreign country. 

Covers Day Care Procedures

Day care procedures refer to small procedures and treatments that don’t require hospitalisation for more than 24 hours. An example here can be cataract surgery. While hospitalisation itself is not required here, the procedure alone can often bring considerable expenses. With prior approvals from obtained from insurance provider, however, policyholders can get their day care procedure covered using the direct claim facility of their plans. 

Value-Adding Benefits

In addition to the basic benefits provided by health insurance, several providers in the UAE also offer special value-adding benefits with their health insurance plans. These can include free health camps, complimentary check-ups, lab tests, exercise meets, and more. Again, it’s worth noting that the number and types of offered benefits depend on the providers as well as individual plans. 

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Limitations of Health Insurance Plans

If we have to talk strictly about disadvantages of health insurance plans, there are none. It simply means that there aren’t any factors that actively put you at a disadvantage if you purchase a health insurance plan. 

Nevertheless, some factors associated with health insurance policies may seem like disadvantages. Let’s cover these quickly and understand why they exist:

Premium Increases with Age

The proportional relationship between health insurance premiums and your age can be one of the biggest limitations of health insurance plans. Thus, the premium amount of your health will keep increasing with your age. 

This is done to incorporate the risk of insuring your health which also changes with age, as the human body is more prone to fall ill and recover at a slower rate on ageing. This not only increases the chances of health insurance claims but also increases the overall hospitalisation and medical costs that the insurer might have to cover. 

Waiting Period for Selective Covers

Depending on your chosen health insurance plan, some covers may have a waiting period for the coverage to begin. The waiting period for a certain cover or benefit of your health plan may require you to wait for the specified period to enjoy the said benefit. 

For instance, if the maternity cover of your health insurance plan has a waiting period of 6 months, you will be required to wait for 6 months after purchasing the plan to take advantage of this cover. Generally, waiting periods range between 6 months to 2 years. 

Generally, the benefits of plans with highly extensive coverage may come with no waiting at all or waiting period of only a few days. Cheaper, more cost-effective covers, on the other hand, tend to have longer waiting periods. 

Co-Payment Clause

Insurance plans require the policyholders to share the medical expenses, which is known as the co-pay clause. The co-pay system is also popularly referred to as deducible of insurance plans. Here, the policyholder is expected to pay a part of the total claim amount, as agreed at the time of purchasing the plan. 

Since deductibles are out-of-pocket expenses, they may initially appear as a drawback of health insurance plans. However, paying deductibles, voluntary or compulsory ones, leads to a reduction in the amount you pay for premiums, which allows you access to cheaper yet comprehensive health plans.  

Sub-Limits on Benefits

While health insurance plans offer an array of benefits, each of these benefits comes with a sub-limit that confines the coverage scope to a substantial level. Sub-limits may often result in partial coverage of medical services and treatments, which can lead to more out-of-pocket expenses for the policyholders. 

The sub-limit of each benefit is properly mentioned in policy documents and plan brochures. Nevertheless, this limited coverage may still prove troublesome in the time of need.   

Loading Charges

Loading is a type of charge added to the premium of your health insurance plan as the conditions that prevailed previously change. The possible reason for loading charge application can be a newly discovered illness, change in age group, increased risk of premium payment defaults, and more. 

Loading is primarily applied to cover the increment in the level of risk that a policyholder brings to the insurance provider. While loading charges are justified as per the agreement terms of insurance plans, they may be perceived as a disadvantage by most policyholders since the premiums tend to increase dramatically without prior notice due to them. 

Should You Purchase a Health Insurance Policy?

As far as the legal requirements go, all UAE residents are required to get proper health insurance plans as per the guidelines established by the government. However, investing in a good health insurance plan is beneficial, whether required by law or not. 

Healthcare in the UAE can be quite expensive if you don’t have insurance plans to cover your financial expenses or have a health card to get discounted public healthcare. Getting a health card in itself can be daunting given the paperwork involved and waiting period. 

While there are a few limitations to the coverage offered by health plans, the overall benefits still supersede all. Such plans ensure that you get adequate coverage even for high-expense treatments at manageable premium amounts. For this reason, it is in your best interest to invest in a cost-effective health insurance plan that at least covers your major requirements, if not all.  

Use Disadvantages to Your Advantage by Choosing the Right Plan

Similar to the two sides of a coin, health insurance plans come with their set of limitations and strengths. However, there is an easy way to use all such factors to your advantage simply by choosing the right coverage at the right time. Here’s how you can turn the table around:

  • Buying your health insurance plan early allows you to get lower premiums, meaning that you can spend a major part of your 20s, 30s, and 40s with significantly lower premiums. Once premiums start increasing, the decision will be based on your claim history, health conditions, and several other factors and not just age. This, in turn, puts you at an advantage compared to those who started late. 
  • While the waiting period is a common feature of most health plans, you can work around the conditions. The most common covers that come with a waiting period are maternity covers, pre-existing condition covers, and critical illness covers. You can compare different plans and find the one that offers you the best conditions on waiting period in advance. 
  • Opt for plans with higher co-payment ratios when you are young as you are less likely to fall ill and make a claim. This will lower your premium rates. On the other hand, it is advisable to select plans with a low co-payment ratio or no co-payment at all when you are older. As your income will be higher at this time, you would be able to easily afford the premium and get your claims paid out by the insurance company entirely.
  • Make sure to read and understand the underwriting of your insurance plan to avoid any unpleasant surprises about sub-limits applicable to individual benefits of the plan. Work around the sub-limits to make sure you don’t end up paying a large sum out of your pocket in case medical services are required. 
  • The key to having the perfect coverage at all times is revisions. Keep revisiting your health insurance cover every few years and check if your requirements are being fulfilled. If not, you must consider switching the plan. If you find that another provider is offering your required services at a better price, consider switching providers. 

In a Nutshell 

Now that we are at the end of our discussion, we find that the advantages of health insurance plans triumph over the few limitations they have. Moreover, as it is mandatory for all residents to purchase a health insurance plan in the UAE, it is ideal to learn to work around the limitations and make sure that your chosen plan not only fits your requirements but also offers you the best possible deal beating all limitations. 

You can use the tips discussed in the previous section to figure out the ideal time and the plan to buy as per your age group. Make the best out of all the mentioned challenges and limits simply by being a little mindful and proactive concerning your insurance needs. 

A great place to start here would be, our website, where you can discover the top-rated health insurance plans in the UAE at affordable rates. You can continue on our site and visit the ‘health insurance’ section to proceed.

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