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Health Insurance-If you are in the pink of health

If you are in the pink of health, it is difficult to imagine an illness, could make you pauper. The escalating cost of medical treatment is becoming beyond the reach of common man. The oft quoted rate of inflation in health care is between 15-20% per annum, as compared to overall inflation of 6-7%, making medical treatment very expenses for common man.

The idea of making/earning money can make a man move mountains. If you tell a man to stop smoking because it will damage his lungs, he will not stop. But offer him a rupee for every cigarette, he will give up and get cured for life. So, it’s no wonder that when well-wishers ask you to take medical insurance you ‘ll smile and ignore them as if there were insane.

My father too was living in such a dream world. He thought he or my Mom will never get sick. Newly retired from a PSU where medical reimbursement was actuals my father was spoilt and as a result he did not buy health insurance during his younger days… till my Uncle threatened and cajoled him to buy one for my Mom and himself.

Within 6 months of buying health insurance at the age of 59 my mom had emergency hernia surgery late in the night. Blissfully unaware of pre-existing disease clause in the policy my father cried fouled when Mom’s claim was rejected as hernia is not covered in the first year of policy. He had never bothered to read policy document. Substantial sum of money was spent on Mom’s 8-day hospitalization and after care. It dented my father’s savings at a time when he was still grappling with his post retirement issues of regular income etc.

All this taught me few lessons on importance of health insurance and care to be taken while buying health cover. Using my own personal experiences, I will try to decode and simplify health insurance in this blog by answering some common questions and myths which more than often deters us from buying health cover.

Why do I need?

Health care is a serious concern for majority of us. Escalating costs accompanied by increase in life style diseases, dreaded disease like cancer becoming common make us want to run for cover. This is where Mediclaim steps in. It is an insurance that takes care of your medical expenses or treatment expenses.

Remember: Healthcare costs are ‘inelastic’ because demand doesn’t go down as prices go up.

The icing on the cake is tax benefit u/s 80 D of Income Tax Act,1961

I am too young and healthy

At times, certain ailments remain unknown to us until their symptoms are visible. As per regulations, such pre-existing ailments are covered after at least 48 months of holding a health policy. Therefore, buying early, before one develops any diseases, would help ensure that one’s health is insured without any such exclusions.

By and large, a health insurance policy bought at an early age and renewed regularly for several years without any claim should lead to a better claim experience.

Remember: The best time to get enough health insurance is when you need it the least

In my experience with people over 45 I have seen insurance companies refusing cover or loading premium because client is taking medicine for BP/Thyroid or is overweight or has anxiety problem which is so common for us, in this cut throat competitive world.

Remember: The more you delay and the older you get, the heftier will be your premium.

I have a group cover by my employers,so I don’t need a separate policy

If your employer provides an option for group health coverage, grab it even if you have to pay a portion of the premium. The coverage amount may be restrictive so check if it is sufficient. Also, remember, especially if you are in the private sector that this group cover will continue only as long as you are in the job. The period between switching jobs may leave you unprotected. Moreover, few insurers are calling off their contract with employers and thus leaving several employees stranded with.

How much Mediclaim do I need?

This depends on several factors such as age, health condition, lifestyle, family history, etc. Ideally,you should cover the cost of big surgeries and operations. Give due consideration to your medical history, family health history before deciding on the amount of cover. We get use to certain standard of living, this also plays a very imp factor while deciding on the amount of cover.

Bottom line: Affordability of the premium. One must consider the amount of premium which is to be paid by him. The amount of premium is directly proportional to the sum assured.

Should I go for individual or family floater?

If you have a family and are looking to buy health insurance, the common dilemma is between buying an individual health insurance policy and a family floater policy. Individual policies, as the name suggests, cover a single person. Whereas, the floater policy covers the entire family under a single policy.

Keep the following points into consideration in order to choose between the two:

PRICE

If your family is young or the age gap between the spouses is not much, then a floater plan will be cheaper.

Floater: good

Individual: bad

HIGHER COVER

Being cheaper than the individual health plan, the floater health insurance plan makes a higher value cover more affordable.

Floater: good

Individual: bad

BAD YEAR

However, the flip side is that while in an individual plan each individual has a dedicated sum insured, in a floater plan the insurance cover is shared. So if one family member makes a claim, the cover reduces on the rest by that much. In the event of a bad year, when all members need to use the policy, the floater may not be sufficient.

Floater: bad

Individual: good

(But please note that there are products available in the market, where your health cover is automatically restored in the event of one family members using the entire cover in 1 year)

AGE GAP

Individual plans are expensive compared to a floater policy. But the cost advantage of a family floater insurance plan diminishes if the age gap between the spouses, or the eldest member, is huge. It could also become financially unviable if one individual is not in good health and poses the risk of using up the entire sum insured.

Floater: bad

Individual: good

Affordability

Bottom line is if you can afford have separate covers.

What are the benefits of Mediclaim?

Medical insurance covers almost everything right from the time you step into the hospital till the time you are discharged including Ambulance charges. The normal costs that are covered are room and boarding expenses, nursing expenses, fees for the surgeon, anesthetist, medical practitioner, consultant, fees for specialists, blood, oxygen and the operation theatre, charges for surgical appliances, medicines, diagnostics materials and charges for X-rays, dialysis, chemotherapy and so on. Even medicines are covered.

(Please read the product brochure and policy wordings carefully)

What are the limitations of Mediclaim?

*Most important limitation is pre-existing health conditions. If a person has had a heart attack previously or has been operated upon for some other condition, then cover will not be available for those conditions.

*Some day care medical procedures are not covered (refer to product brochure or policy wordings)

*Dental surgeries, cosmetic surgeries for aesthetic purpose, HIV related conditions etc. are not covered.

*There is a waiting/cooling period of 30 days to 90 days from the date of inception of the policy, when you take the policy for the first time

*Disease wise capping in many cases. For example, cataract surgeries there is a sub-limit of Rs. 40,000

*High premium with age. Premium tends to jump when there is a change in age band.The cost can sometimes so expensive that the person may not able to pay the premiums

Health insurance is very useful and everyone should have adequate cover.Hospital bills for very small to considerably large ailments can be a pain. It’s difficult to meet such costs on our own without burning a hole in our savings. Also, with medical costs escalating, we may have to compromise on quality healthcare, because of affordability. It is then that the importance of health insurance comes into the picture. Health Insurance provides us with the ability to afford better healthcare facilities for ourselves and our loved ones. What’s more, Govt give us tax benefits. That’s enough incentive to gift ourselves and our loved ones a peaceful sleep this Christmas.

For please feel free to call/write for more details on Health Insurance. You can write to, contact@sbsfin.com