Healthcare is the template on which you build your career and future. From here, you begin your journey for your destination. Therefore, being financially stable to secure your health becomes an urgent need. Uncertainty lies everywhere, but we try to minimize it. Here we must strive to secure some portion of our financial prowess for our healthcare needs so that there is nothing untoward in the basket for us in the future.
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Financial planners emphasize on healthcare planning as the base framework, preceding which no important planning is needed. After you finish the quintessential job, you move on to do some more work to insure your goals.
But why the healthcare insurance should be taken up first?
Medical inflation is around 17% in India, indicate the studies. This annual percentage is visibly higher than the normal inflation in the economy. Therefore, from an economic point of view, it has become essential to purchase the right kind of insurance plan for health immediately.
Secondly, one must realize the fact that life is eventful and misfortune is unseen. Accidents occur without any intimation, and you may regret not having health insurance. Minor or major activities that affect our health must concern us every-time. Health insurance is not just about diseases, after all. In the world of illness, certain sicknesses are highly dormant. The symptoms of these ailments might become superficial at a point of your life when you are in no condition to afford the health costs. Better be prepared for all eventualities. Policy-wise as well, if you buy insurance at an early age and renew it for some years without any claim, you may have a better claim experience till the need arise.
Following are the steps that can help you find a good health insurance plan:
There are two kinds of health insurance plans. One, ‘indemnity plans’ that reimburse the hospital fees and two, ‘defined-benefit plans’ which, irrespective of what is your hospital expense, will give you a lump-sum amount. The former must be the center of your health insurance portfolio. This indemnity plan can be individual health insurance. You can add more on it, such as other critical illness plans that are normally defined-benefit plans. There are certain other plans like hospital daily cash plan which will offset the hospitalization costs, that you can add on top of that base plan.
The ‘individual health plan’ is individual-oriented, as the name suggests. Each member of one’s family will have his/her plan and follow-up schedules. Premiums will depend on the age of the member insured, and the sum insured. The claim by one has nothing to do with others. But, sometimes insurers’ provide a discount on simultaneous insurance purchase for multiple family members.
On the contrary, the Family Floater plan gives you an umbrella plan that can cover more than one member of your family. You can pay one premium for the insurance of your spouse, children, and parents. Same as the premium, the claim is also single. Irrespective of the requirement of any number of family members, the whole amount of insurance can be claimed. The underlying assumption here on the part of the insurer is that not all the family members will fall ill at the same time. Even if some of them fall ill, the chance of all being sick within one year is very less.
There lies a general confusion on what to choose between an individual health plan and a ‘Family Floater’ plan. Here you must remember that an individual plan gives you extensive coverage like no other. Whereas, in a Family Floater policy, bad experience in one can significantly affect others in the family. It may be the situation that you are having an inadequate sum insured for other members of the family.
To be honest, there are no bound set of rules for this. How much health insurance one can have depends largely on the basic facts surrounding one’s lifestyle. Where do you live? You residential city holds a good position in this requirement. In metropolitan cities like Delhi, Mumbai, or Bangalore, the lifestyle is normally expensive. Hence the cost of medical treatment is high. Therefore your cover should be at least of Rs.10 lakh. But, the same is not true for class B cities. One can manage with insurance coverage of Rs.4 to 5 lakhs. So you have to see your daily expenditures concerning your medical expenses and other ancillary activities. Even if you are residing in a class ‘A' city and there are less medical incidences in your family somehow, you can go for the less amount of coverage. It depends on what is your parameter for calculation.
The option of sub-limit is a recent innovation in the health insurance sector. Under this, the amount that is to be reimbursed to the insured is capped under certain cost-heads. The insurer pays only the amount fixed under such limit notwithstanding your expenditure on that amenity. Say, the transportation bill is capped at 1% of the total insured amount. If you accrue an expense that is more than that limited amount, you will not be paid by the insurer. Rather, that will be your out-of-the-pocket spending. Some plans have these sub-limits that you have to watch while buying, whereas some do not have such complexities.
See how much time it takes for insurance to cover the ailment. This period is often termed as ‘waiting period.’ It varies from 36 to 48 months. These details are explained in the terms and conditions paper that you get when you begin the purchasing process. It is preferable to have a shorter waiting period for such ailments. There are also certain provisions for certain ailments. Apart from this one thing, another thing to be careful about is that you very clearly mention the pre-existing ailment at the time of your insurance purchase. A clear disclosure may help you with claim support, and inaccurate details can result in rejection.
This option is not in all the schemes. But in senior citizen plans, this can be mandatory. Co-payment normally helps to ease the burden of higher premium payment, as in the case of a higher age group. Sometimes you have to pay as much as 20% co-payment if you get treated in a city different than your mentioned one in papers.
Lastly, do not forget to compare at least 2 or 3 plans from different companies. Take a close look at the details of every option. And be careful of the exclusions and inclusions. Choose health insurance based on clarity and simplicity rather than intricate details and cumbersome procedures.