A regular visitor to the United States for events and client meetings 36-year-old marketing professional and fitness enthusiast Prajakta Saraogi did not think health insurance would be a priority.
However, while in the US two months back, she experienced discomfort in breathing and had to be immediately hospitalised for a minor procedure.
The cost? Rs 15 lakh. Over and above that were the homecare and medicine-related expenses of Rs 5 lakh.
While Saraogi had adequate savings to pay for the treatment, the money kept aside for the purchase of a second home in Delhi had to be used for the procedure.
This taught her an important lesson: Buy adequate insurance on time.
Last week, CignaManipal Health Insurance launched a Rs 18 crore global medical cover targeted at high net-worth individuals. But if you are a globe-trotter, the size of the cover should not shock you considering the financial costs involved for medical procedures in the West.
The common perception among working professionals is that a basic Rs 10 lakh insurance cover is adequate. However, the rise in living costs for most Indian cities and rising medical inflation has necessitated the need to have a cover touching Rs 1 crore.
Picture this: You have an annual salary of Rs 15 lakh, with a wife and child to care for. If there is an accident or medical conditions restrict your ability to have a full-time job, a Rs 10 lakh insurance cover is not enough to sustain the family.
The worst-case scenario is when the sole earning member of the family dies in an untoward incident. A Rs 1 crore cover would at least sustain the family through daily expenses and the child's education until another family member is employed.
The premium for a Rs 1 crore cover, if bought at an early age (25-30 years), is only about Rs 6,000 per annum. While one may invest in stocks, mutual funds and other financial instruments, insurance is the only instrument that gives a lump sum death benefit.
The same follows for health insurance as well. The annual premium for a Rs 1 crore health cover, if bought at an early age, will be Rs 25,000. Considering that a good city hospital charges about Rs 20 lakh for surgery, a health policy with an appropriate sum assured would lessen the burden.
Waking up to the need for insurance after facing a bad accident or death in the family is obvious. But if you have crossed the age of 40, a Rs 1 crore life or health policy will be priced significantly higher.
A simple check of the claims settlement ratio would tell a customer which insurer to trust. Always remember that the cheapest policy is not the best and you need to choose product features that are suitable for your lifestyle.
For instance, a family with a history of heart-ailments must have a heart-care policy. Or those employed in risky professions like armed forces, drivers, pilots, etc., must have an insurance cover to complement their income.
Merely saving money in a bank account may not be sufficient. Invest wisely so that during an emergency, there is no compromise on the medical treatment nor fears of an uncertain future.
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