Why to buy medical insurance or health insurance?

We often blurt out an old but a true adage, Health is Wealth as friendly advice. Without realising its importance ourselves, the phrase becomes our signature response to one and all. But self-realisation occurs only when life strikes you hard; when on an unfortunate day, either you or a loved one ends up on a hospital bed. The family’s pain becomes worse if they are unable to arrange the money demanded by the hospital.

health insurance - Why to buy medical insurance or health insurance?

Family members end up taking heavy debt or mortgage property for monetary support. Some resort to redeeming their investments and fixed deposits midway, which could have secured their future expenses for child education, weddings or would have served as retirement funds.

Given our fast-paced lifestyles, serious ailments (cardiac arrest, liver failure or lung, and kidneys diseases) can affect even the healthiest of us all, irrespective of age. Whether in your ’20s or ’60s, you are at equal risk to fall prey to severe diseases. Thanks to our stressful lives!

How we wish that we never have to face such a reality that bites. Since the future is beyond our control, we ought to be prepared for the unforeseen and ensure that our future plans don’t go haywire or our families don’t go through the ordeal. So, are you prepared to bear the cost of unexpected medical packages that run into lakhs?

A medical or health insurance can keep you covered for the rest of your life. You can understand and learn about Medical/Health Insurance through our simple Q & A’s.

 Q) Why should you get an insurance cover at the earliest? How much does medical/health insurance cost?

A) It’s best to get medically insured in the age group between 25-35 years, as the premium costs are low and generally no health check-ups are required by insurance companies at the time of policy initiation.

Total Premium for a basic cashless INR 10 Lacs medical cover for a 30-year old man with a 27-year old wife should cost around INR 10,000 – 11,000* for 1 year. Paying a 2-year premium together gets you a 10% discount on the policy premium.

If you add features like out-patient treatment and maternity benefit, then the premium will increase to INR 20,000 – 22,000* per year.

The premium can be easily compared online. All the insurance policies can be purchased online directly from the company’s website. Detailed comparison and analysis of the plan feature, price and terms & conditions should be done before buying any insurance policy.

(* Prices are indicative based on a leading insurance company’s online quotation)

Q) Paying premium each year or every 2 years. What works better?

A) If you plan to get married, have a baby, or want to increase your sum insured soon, yearly premium payment is the best option as an addition to a policy can be only made at the time of renewal.

Otherwise, opt for 10% discount by paying a premium for 2years if your budget permits.

Q) Do I need medical insurance; my family and I are protected under the company’s group health insurance?

A) In case you are insured under a company’s group health insurance, it is still vital to have your personal health insurance. A medical emergency may arise at a time when you have resigned from your job (or get fired) or you are on a sabbatical/between jobs. Nobody knows the future.

Q) How should I decide which insurance company to go for?

A) You should do the following –

  1. A thorough comparison of the policy features (both inclusions and exclusions) needs to be done to ensure an apples-to-apples comparison. Inclusion or exclusion of features like OPD coverage, Maternity Cover, Policy-restore benefit, Ambulance charges, Daily Cash, Donor charges, etc can be evaluated based on the requirement.
  2. Network Hospitals: Higher the better! Good hospitals which are closer to home & office should be there on the list.
  3. Evaluate the claim settlement ratio – Again, higher the better!
  4. Room-rent sub-limits – It has become important to look at the per day room cost levied by the hospitals these days.
  5. Renewability – Lifetime is better!
  6. Insurance companies with dedicated team for claim settlement rather than third-party outsourcing.
  7. Check for online reviews – i.e. customer feedbacks and complaints online.

It is extremely important to make full disclosures w.r.t pre-existing illnesses, family health history, and smoking/drinking habits. Any false disclosure can become a reason for the rejection of the claim by the insurance company.  

So buy adequate health insurance coverage and keep your family & your life savings safe.

Kushal Bhateja

Program Head-Financial Analysis

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