Inflation is raging, but the costs of private healthcare are rising even faster. One estimate says that health care costs in India are increasing by 13-14 per cent every year. The only way to safeguard your finances against a fat medical bill is to buy a health insurance policy. There are several types of medical insurance policies, each designed to fulfill a certain need. The choice depends on the buyer’s age, family size and structure and existing insurance cover. Choose one that best suits your circumstances.
Young nuclear family
If you are living in a nuclear family, a floater plan that covers all members is you best option. The premium per `1 lakh may be higher compared to an individual policy but the premium per person works out to be lower. It’s a calculated risk based on the assumption that all the members are not likely to require hospitalisation at once.
For newly married couples who intend to start a family in a few years, it makes sense to plan accordingly Though most health insurance policies do not cover maternity costs, some policies 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.
Already covered by employer
A lot of people have the misconception that if they are covered by a group plan from their employer, they don’t need to buy a separate policy. While group covers are useful, they may not be sufficient. If you lose your job or switch to another company, you may be rendered uninsured.
Even if you buy a fresh cover immediately, keep in mind that 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. Group covers have no such exclusions.
Living with dependent parents
The family floater plan is not a good option if you want cover for an older relative as well.
The premium rates in these plans are determined by the age of the oldest member.
If you live with aged parents, buy individual plans for them separately so that the premium for the rest of the family does not shoot up. When 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 lifelong cover.
Even so, the premium is prohibitively high and you could be paying Rs 24,000-30,000 a year for a cover of Rs 1.5 lakh. Some may find that putting away the premium money in an emergency fund for medical expenses is a better idea than buying health insurance at that age.
Your house is your most valuable asset. Yet, very few people insure their home though home insurance is very cheap in India. The vital covers your house needs will cost you less than Rs 2,000 a year. Keep in mind that you don’t need to insure the house for the value of the property but only for the cost of reconstructing it. The costs can vary from Rs 1,500 per sq ft for a basic no-frills structure to Rs 2,500 per sq ft for a premium construction. You also need to insure the contents of the house against damage. The cost of ensuring contents worth Rs 10 lakh against natural and manmade calamities is just Rs 255.
Burglary and Breakage
The covers against burglary and breakage are costlier but important nevertheless. You can further enhance the coverage by adding more sections if you perceive a certain risk and if your pocket allows.
A standard fire and other perils policy covers damage due to fire, lightning, storm, flood, landslide, earthquake, vehicle impact, rioting, arson and bursting of pipes and tanks. It is possible to buy this as a standalone cover, but most insurance companies encourage buyers to go for a comprehensive plan that covers a wide range of risks.
Some people think they don’t need home insurance if they live in a rented house. While this is true, they still need insurance against any damage to the contents (by any natural or man-made disaster) and against burglary. These basic covers don’t cost too much.
Five things your agent won’t tell you
These conditions are logical but are kept under wraps so that buyers don’t have second thoughts.
1. Compulsory deductible
Your policy will not compensate you fully. The first 5 per cent of the sum assured or Rs 10,000 of every claim is not paid by the company.
2. Limits on claims
The payment is subject to limits. Architect fee is limited to 3 per cent of sum assured and debris clearance to 1 per cent. The payment made to the architect or engineer for processing the claim papers cannot be included in claim.
3. Jewellery cover
Under a standard policy, only up to Rs 10,000 worth of jewellery is covered, and cash not at all. To insure jewellery, you have to take a separate all-risk policy, hich costs Rs 10 per Rs 1,000.
4. Conditions apply
Your claim against burglary will not be valid if the house remained unoccupied for over 30 days at a stretch or if your household help was involved in the theft.
5. Quake cover for building
The entire building has to be covered for earthquake risk. You cannot insure a certain section of the house in isolation.