HOW TO PICK YOUR HEALTH COVER CORRECTLY

TIPS TO PICK THE RIGHT HEALTH COVER

·         How does one pick a suitable health plan ?

·         The answer is that your needs should define the type of policy you buy, as each type of health insurance policy fulfils a certain need.

·         The choice depends on the buyer's age, family size and structure, and existing insurance cover.

·         Health insurance – It pays your medical expenses.

·         Hospital cash insurance – You receive a fixed amount of cash if you are admitted to a hospital.

·         Critical illness insurance – It reduces your financial burden if you are diagnosed with a major illness like cancer or a stroke.

·         Long term healthcare – It pays the cost of any long-term health problem.

·         Accident disability cover – It protects your income if you are unable to work after an accident. 

1. For a young nuclear family

·         A family floater plan will suit you best, where the cover is shared by the entire family.

·         The total premium may be higher compared with an individual policy, but the premium per person works out to be lower.

·         It's a calculated risk you can safely take as it is unlikely that all the members will require hospitalisation in the same year.

·         For newly married couples, who intend to start a family in a few years, though most health insurance policies do not cover maternity costs, some do.

·         However, these costs are covered only after a waiting period of 2-3 years.

·         Buy a policy that covers maternity costs immediately after marriage.

2. For those covered by employer

·         Some people believe that if they are covered by their employer, they don't need to buy a separate policy.

·         This can be a costly mistake as they may not be sufficient.

·         Also, if you lose your job or switch to another company, you may be rendered uninsured.

·         Even if you buy a fresh cover immediately, there is a mandatory 45-day cooling period during which certain claims will not be paid.

·         Besides, there is a 2-3 year waiting period for pre-existing diseases.

·         This is where the employer-provided cover is very handy, as the waiting period for a pre-existing diseases cover is taken care of by the group cover.

·         While supplementing an existing cover, you can either buy a normal policy or a top-up plan.

·         A top-up policy is cheaper because it will cover expenses beyond a certain initial threshold.

·         Their existing policies can take care of the initial expenses, which won't be covered by the top-up plan.

3. For self-employed or businessperson

·         Health insurance is especially important for people not in formal employment.

·         For them, a simple indemnity plan that covers hospitalisation expenses will not be enough.

·         They also need to insure themselves against loss of income due to hospitalisation.

·         Self-employed professionals should supplement the base cover with a fixed benefit policy, which pays them a certain amount for the period that they are out of action.

4. For those living with dependent parents

·         The family floater plan is not a good option if you want a cover for an older relative as well.

·         This is because the premium rates in these plans are determined by the age of the oldest member.

·         If you live with aged parents, it is advisable to go for individual policies rather than a family floater.

·         Buy individual plans for them so that the premium for the rest of the family does not shoot up.

·         Also, there is a greater likelihood of making a claim for an older person.

·         So the floater plan will miss out on the no-claim bonus it might have otherwise received.

·         While buying a policy for your parents, study its features in great detail.

·         Most health insurance policies don't offer coverage beyond the age of 70 years, but some policies now offer a lifelong cover.

·         However, do the math when you buy a health cover for someone over 70 years, as the premium is prohibitively high with a very small cover.

·         Some may find that putting away the premium money in an emergency fund for medical expenses is a better idea than buying insurance at that age.

·         ÂIf you still want to buy the cover, check out the clauses relating to its renewals.

·         If it is in place, an insurer cannot back out because of the advancing age of the insured person.

·         Insurers are also required to disclose upfront the terms of renewal, including the scope of coverage and the likely premium for future renewals.

·         Renewal clauses should be among the most important factors governing the choice of a health policy.

·         Look for disclosures regarding renewal of premiums, and whether they are guaranteed on the basis of age slabs.

·         Do remember that insurers cannot raise the premiums (called loading) arbitrarily on the basis of a claim in the previous year, and it has to be based on the claims in the preceding three years.

·         Besides, the insurer not only has to inform the policyholder of the rise three months in advance but also justify the increase.