5 things you should know about health insurance

A health insurance policy is a must considering the double digit inflation in healthcare costs.

Even before you buy life insurance plan, you need to get your health covered. A health insurance policy is a must considering the double digit inflation in healthcare costs. Many would argue that if you are a working professional, your company will already provide you with an insurance cover. However, the health insurance cover may not be adequate. Also if you quit you job or are in the transition period to your new job, you don’t want to be without an insurance cover. In case of unforeseen event during the period you might have to end up using your own savings. Now that you are aware you should have an insurance cover, here are five things you should know before opting for one:

Ensure you are adequately covered: If you are young, don’t have any health issue and have the ability to pay premium, you should look at the average hospital bill you would expect. “Say if today you need a Rs 4-5 lakh cover for a family floater. Since it a life time cover, I need to factor in inflation as you may need the policy later. At 5% inflation for 20-25 years, you will need a cover of say Rs 14-15 lakh,” said Mahavir Chopra, director of health, life and strategic initiatives at Coverfox.com.

Start with base cover and top it up: To begin with, you should opt for a base cover. Once your basic health cover is in place, you can you a top up insurance cover. A top up plan is a regular health cover and a cheaper way to increase your health insurance cover. “You can buy Rs 10 lakh base policy and then remaining as a top up policy. You should also look at the difference between the cost of buying Rs 10-15 lakh top up and a Rs 15-30 lakh. If the difference is low, then you may want to consider the higher top up,” said Chopra.

Include critical illness and personal accident cover: If you have decided to buy a health insurance policy besides base cover and top up, you also have critical illness cover and personal accident cover. “A person should typically have all four covers—base insurance cover, top up plan, critical illness cover and personal accident policy. A personal accident policy will take care of all kinds of disability and is cheap. A comprehensive personal accident cover should take care 15 to 20 times of your annual income. In case of critical illness cover, the idea is to take care of loss of income because of certain critical illness diagnosed,” said Chopra. It is to protect you against losing your means of earnings.

Paying health premium is better than spending your savings on healthcare: Taking a higher health insurance cover also means that you will have to shell out more in the form of premium. But is it worth it? “After taking a higher cover you can forget about healthcare and risk around it forever. You don’t have to keep on reviewing it. It is tricky to get an upgrade if there is an illness. Say you pay Rs 50,000 a year for 40 years, you will end up paying Rs 20 lakh for over Rs 1 crore cover,” said Copra. Instead of depleting your savings on health care cost, taking an insurance cover works well.

Even if you have insurance from your company, you still need individual health plan: It is better to have a personal health insurance policy. “If you have higher covers from organization, if you are clear that you are going to remain employed, then you can simply buy the top up and not buy the base cover depending on the base cover your organization offers. There also convertible top-ups also available which you can then covert to a base cover when you move to a another organization with lower cover or if you go on your own,” said Chopra.