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Dec 22, 2017 02:03 PM IST | Source: Moneycontrol.com

Rising medical expenses: Don’t just bank on your employer-provided health insurance

If you want to purchase health insurance for a respectable sum which will fetch a good healthcare for you after accounting for inflation of around 12 to 15 per cent, you have to buy a health insurance for yourself.

Nikhil Walavalkar @nikhilmw

Buying health insurance is seen as a waste of money by many. “If I am not hospitalised, all my money is wasted,” is the common argument. However, most of them want to ignore the fact that one hospitalisation in the family can throw them off their journey to achieving financial freedom.

A joint study by KPMG and FICCI highlighted the fact that ‘Out of Pocket’ expenditure for the country accounts for 62 percent of the total healthcare spending against a global average of 18 percent. If you are thinking of relying on the employer provided health insurance then do not ignore the findings of the MSME group health insurance penetration in India report. The report findings point out that 48 percent MSMEs prefer low sum insured of up to Rs 2 lakh. MSMEs preferred a basic cover of personal accident and critical illness with a focus on a reduction in premiums and coverage of employees only.

The key takeaway from this is if you want to purchase health insurance for a respectable sum which will fetch a good healthcare for you after accounting for inflation of around 12 to 15 percent, you have to buy a health insurance for yourself. While the employer provided group health insurance and the social welfare schemes such as Rashtriya Swasthya Bima Yojana should be tapped, a family floater health insurance purchase must follow. Here are five things you must ensure while purchasing health insurance.

Buy adequate sum assured and right benefits: A sum assured of Rs 5 lakh is a ballpark number most financial planners recommend. If you are living in a metro city and keen on top of the ranks healthcare facilities then you should consider going higher.

Traditionally health insurance policies offer to pay the hospital bills. However, the new variants are also offering to pay some expenses that were always paid by consumer ‘out of pocket’ and hospital cash benefit, albeit at a cost. If you are keen on such cover, you can go for these covers after due diligence. Covers such as maternity benefit, restore benefit add value to one’s health insurance, but they should only be bought if the costs permit.

Choose the right insurer: While the products and premium are the two points most buyers focus upon, one should not ignore the insurer. Do check the claim settlement track record of the insurer. Both the percentage of claim settled and the percentage of claim settled in less than a month must be looked at. Higher the number better it is. You should also choose an insurer with the least consumer complaints.

Some insurer score high on most of these counts, but may not be offering good healthcare options in your region. Do check the ‘network hospital list’ of the insurer. Avoid an insurer if it is not providing the hospitals you would choose for treatment in its network.

Read the fine print: Health insurance policies come with a long list of terms and conditions. Be it waiting periods, sub-limits or exclusions the coverage gets curtailed. Waiting periods vary across policies. Sub-limits are specified for many health condition - that limits the amount the insurer would pay in case of a hospitalisation arising out of that health condition. It make sense to read through all these limiting factors before signing above the dotted line.

Budget can’t be the constraint: When one wants to buy higher sum assured, the premium goes up. For some limited budget is a reality. In such a circumstances, one can consider buying top-up plans. Top-up plans pay after the base policy sum assured is exhausted.  Super-tops too can be tapped.

If you are willing to pay for small expenses, but worried about larger costs, consider buying a health insurance plan with high deductible. These plans pay only when the claims exceed the deduction amount. The premium charged for these policies are relatively less as compared to traditional basic health insurance policies.

If you have limited money to spend, buy only basic family health covers. Do not go for hospital cash covers or the ‘ailment specific covers’ – such as dengue care policy or the cancer care policy.

Review it: Once you bought a health insurance policy, ensure that you pay the premium well before the due date. That helps to you to enjoy the continuous coverage.

Most health insurance policies are renewed every year. However some insurers allow you pay for couple of years at one go. Review your health insurance carefully at least once in five years.
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