Nowadays, health insurance has become a necessity. Basically, it acts as a barrier between your savings and untimely medical expenses. Considering the rising medical inflation, it would be best to choose a plan that provides you with the highest coverage within your budget. There is a very cost-effective way to get higher coverage with a lower premium.
Base and Super top-up
Most people often purchase only the base plan with a cover of 5L, 10, 20L etc. Combining this base policy with a super top-up policy enables you to get a much higher cover of even 1 Cr. You might think that this would be definitely a costly affair. But the cost of this Super top-up policy is usually much lesser than that of your base policy. A combination of these 2 policies gives you a greater benefit of health coverage up to 1 Cr.
Illustration:
For a healthy male, age 29, the cost of health insurance would be:
A base policy with Cover 10 L: Rs 8,776
Super top-up policy for 90 L (10 L deductible): Rs 1,021
Total cost for a cover of 1 Cr = Rs 9,797
Employer’s health insurance or standalone health insurance?
Most people argue that their employer provides health coverage, why do I then need to purchase personal health insurance?
Reasons for not relying on employer’s health insurance:
- Usually, a very basic plan with low coverage
- Co-pay clause
- No tax benefits
- Coverage only till the employment
Even if your employer is providing a good plan, you cannot rely on it completely as this perk would be available only during employment. During Covid-19, many of us lost our jobs and thereby lost company-provided insurance cover also. Those who wanted to reapply for insurance with some pre-existing disease or past critical illness history did not get the policy due to the adverse history. So you need to think twice if your insurance cover is protecting you for a lifetime or not.
When you pay the premium for your family’s health insurance, you can also get tax exemption for up to Rs. 75,000 under Sec. 80D of Income Tax Act.
Parameters for selection of best-suitable health insurance:
- Insurer Company: You should look for a company having a good claim settlement ratio and your preferred hospitals on their list of network hospitals. This facilitates you with a cashless settlement opportunity.
- Room rent limitation: Most of the charges in hospitals are usually linked to the rent of the room that you choose. If you choose a room with even marginally higher rent than that your insurer is providing, you might end up paying a lot more out of your pocket. So better choose insurance with no room rent limitations.
- Restoration benefit: This benefit acts like a recharge for your health insurance. Make sure that this benefit is available without any restrictions for diseases or per individual.
- Co-pay clause: Co-pay or co-payment clause implies that hospitalization cost is shared between the insurer and the insured. Opting for a co-pay may reduce your premium, but increase your out-of-pocket expenses in case of a claim.
- No Claim Bonus: This benefit rewards you for not claiming in a policy year. This may go up to 100% of your base sum insured.
- AYUSH Benefits: Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homeopathy are included under AYUSH benefits. It is advisable to check whether your insurer provides partial or complete coverage for such treatments.
- Addons: There are several add-ons which cover your non-payable items, inflation-adjusted coverage, a cash benefit if you are forced to be hospitalized for a longer period, etc.
Now that you’ve shortlisted a health insurance policy for your Family, the question arises that whether to opt for a 1-year or 3-year premium payment.
Well, most of the insurers give some discount when opting for a 3-years premium payment option. Apart from this discount, you also secure the lumpsum pricing for the block of 3 years. The insurance cost keeps on rising each year. Hence, purchasing a 3-year plan gives you peace of mind for the coming years.
But if you are tight on budget, there is nothing wrong with buying health insurance for 1 year. You can always change payment frequency at the time of renewal.
If you would like to know more about the best-suitable health insurance for you and your family, please feel free to connect with us here.
Thank you for sharing this… Very useful..