The present COVID-19 pandemic has made everyone realise that medical emergencies cannot be predicted and can cause a financial impact on savings. This can be tough to handle for a family, especially during uncertain, troubled times. People have also started to realise the importance of not only having good health but also good health insurance coverage. Besides, with the rising cost of medical expenses, families are realising that getting access to good medical facilities and hospitalisation, will be financially strenuous.
Getting adequate health insurance cover for self and our loved ones have now become a priority. Apart from the obvious benefit of having the financial confidence to take care of your loved ones, a health insurance plan is extremely useful when it comes to beating medical treatment inflation. Some studies have indicated that the Indian health insurance market is projected to register a CAGR of 29% during 2021 – 2025. Looking at the growing interest, in this article, we will share some basic information on health insurance.
THE NEED FOR HEALTH INSURANCE
Perhaps everyone realises the importance of adequate health today especially with rising lifestyle diseases and high medical costs. However, we would repeat the reasons to drive home the point clearly. A medical emergency can attack anyone, anytime and impact an individual emotionally and financially and here is why i health insurance is needed
- Ensure access to quality medical treatment for self and family with crucial financial support
- Protect against rising medical and treatment costs
- Protect your life’s savings from being exhausted during medical emergencies and ensure your primary financial goals are not compromised
- Confidence and peace of mind for continued health security of self and family
THE RIGHT TIME TO BUY HEALTH INSURANCE
The low penetration of health insurance in India has created a gap of people without any protection against the financial costs of the current pandemic. To plug this gap and with a regulatory nudge from Buy insurance when you don’t need it as you will not get one when you need it. This holds true for health insurance. The right time to buy health insurance was when you were young and healthy, say below age 30. The next best time is to get it now. Buying early, when you are young and healthy helps you in multiple ways. There would be likely no medical checkups required and, in the absence of any past history of diseases, you will not have any exclusions or waiting periods for any pre-existing disease. Further, there would be lower chances of rejection and policy would be issued without any hassles. Please note that cost is also another important factor as premium costs increase notably with the increase in age. Also if you get detected with any complication like diabetes, blood pressure, etc., then there might be some extra or loading charges levied increasing the premium costs.
WHAT YOU NEED TO CHECK BEFORE BUYING HEALTH INSURANCE
Perhaps the most important decision here is to have ‘adequate’ health insurance. The idea should be to assess your needs and how possibly you can get the maximum coverage you can afford. The coverage amount depends on your medical, financial situation and the city you live in. Choosing the right products and coverage is crucial. Most experts believe a base coverage of Rs.5 lakhs should be considered as the minimum required coverage in metros. While buying a policy, you may come across many new terms like co-pay, sub-limits, pre-existing diseases, waiting period, exclusions, maternity benefit, day-care, no-claim benefit, restore benefit, and so on. It would be great if you can learn about these terms. Else, you can seek guidance from your insurance advisor and help choose the right product for you.
WHAT TO BUY?
Standalone policies are good and many do buy them. Often many corporates also provide their employees with health coverage. However, even if you have corporate policies, they should not be considered as they are only valid until the time you remain an employee. Buying an own policy thus is important early in life as said before.
For nuclear families, the family floater is a great product, tailor-made for such families. The only difference here is that the policy is extended to cover the entire family, providing like an umbrella coverage. This should be a preferred option when it comes to safeguarding the health of the entire family. It saves you from buying and tracking multiple health insurance while benefiting you from significant cost savings. While usually, it covers the individual, spouse and children, some insurance providers allow you to cover dependent parents, siblings and parents-in-law.
At times, single health policy is not sufficient to provide full cover along with many services. High sum assured in the base policy increases the policy premium. Top-up plans come to your rescue here. They are like a backup policy to your regular, base health insurance policy when its limits are exhausted. Top-up plans are a very cost-effective solution to protect the upside risks as they have a high deductible /threshold limit, usually equal to base policy cover. Super top-up plans are similar to top-up plans, except that top-up plan covers a single claim above the threshold limit, while the super top-up plan covers the total of all hospitalization bills above the threshold limit.
COVID & HEALTH INSURANCE
The insurance regulator in India - IRDA, recently mandated standard health policies and most insurance companies have started offering the same. Those with ‘adequate’ existing health insurance policies do not need to worry as your current insurance will meet treatment and hospitalisation charges for all diseases, including Covid-19. However, as mandated by the regulator and due to market demands, there are now many corona focussed policies, including Corona Kavach and Corona Rakshak, in the market today. These products are more suited to those with inadequate insurance or those who want corona protection only as these policies come with non-portable, fixed time horizons and cover only the COVID-19 risks
These policies do have their own benefits and justification to buy. Traditional health policies would make payment for Covid treatment based on standard policy terms which may be debatable and inadequate for the current situation /treatment protocols, deductibles and non-medical costs like PPEs. The existing policies may not cover special treatment zones like home quarantine, makeshift hospitals. Also the hospital room charges billed by hospitals are found to be higher than room rent limits. Such short-term policies can insulate you from such types of expenses and free you from the worry as to what will be payable or excluded. As said, existing policy-holders with adequate cover should not, however, worry too much. There is no uniform answer if one should or should not buy a COVID-19 policy and we would recommend you get in touch with your insurance advisor if you wanna play extra safe.
