Managing finance has become a strenuous task nowadays, which is one reason why people want to keep themselves secure from any unforeseen expenses. Talking about unexpected expenses, health is one of the important aspects which needs proper attention as some medical emergency (if comes) can disturb your finances in just few minutes. To save yourself from any such situation, you can buy a Health / medical insurance policy. Medical insurance policy covers medical treatment in case of illness, injury and accident of the insured. It lets the insured get good medical treatment without worrying about expensive treatment which means without disturbing finances of the insured.
What Is Health Insurance?
Health or medical insurance policy, as the name suggests, is an insurance product that covers the medical expenses of the insured in case of some medical emergency. In simple words, policyholder can get proper health treatment without incurring any medical expenses in case of some medical emergency.
What Is The Right Time Or Age To Buy Health Insurance Policy?
In today’s world, no one can guarantee anyone’s health, be it a child, young or old. Which means there is no right time or age to buy a medical policy, as medical emergency can fall at any age. So to keep yourself secure from the risk of medical expenses, it is a good idea to buy your health insurance policy as early as possible.
What Are The Benefits Of Buying Health Insurance Policy In Early Age?
Buying health insurance before any medical emergency falls is considered to be a right decision. For that, it is very important that one should buy policy in early age. There are few major benefits that you can avail by buying your insurance policy in early age :-
- Low Premium :- Buying health insurance policy at early age, when you are free from any medical problems would cost you less for an adequate cover.
- Complete Insurance Benefit :- In most of the health insurance policies, some chronic diseases have waiting period. If insured gets his policy in early age, he will be able to take the complete benefit of his policy.
- Waiting Period For Health Insurance Policy :- It refers to the number of years insured has to wait for treatment of specific ailments to be payable under the health insurance policy. This varies from one insurance company to another mostly in the range of 1 to 4 years.
- No Claim Bonus :- As the name suggest, it is a bonus awarded to the insured for not claiming anything from the insurance company during the year. Insured get “No Claim Bonus” in the form of additional sum assured every year for the number of years insured don’t claim.
- More Options:- Buying health insurance product in early age offers multiple health insurance options to the insured. But buying the same in later stage will limit the options due to upper age limit in the insurance policies.
- Save Tax :- Buying health insurance policy at early age also helps insured to claim the premium paid as tax deduction under section 80D of the income tax act for longer period.
- Medical Checkup :- Buying health insurance at early age does not require any medical checkup. But in later stages you have to go through a medical checkup which can sometime cause rejection of his application on the basis of medical test.
Why An Independent Medical Insurance Is Required When You Are Already Covered Under A Group Medical Policy Through Employer?
This is a very important question which needs to be answered thoroughly to make you understand ‘Why you should buy personal mediclaim even if your company is covering you and your family (parents, spouse and kids) under a group medical policy?’.
Group medical policy offered by employers allows employees to claim medical expenses for himself and for family. In these type of policies, the claim ratio is usually high which is making these policies less profitable for insurance companies. As a result premium cost for these policies are increasing year after year. Considering this, lets have a look how group insurance policy offered by your employer is not enough for you and your family:-
- Employer May Withdraw This Facility :– Due to high cost, employer may stop covering all family members like your parents. At that point, it may be difficult for you to get a cover for your parents as buying health cover in later age can be difficult and expensive.
- Inadequate Medical Cover :- The insurance cover under group medical policy for each member may not be enough considering the ever increasing cost of medical treatments in India.
- Employer May Not Offer This Facility :- On switching job, your new employer may not offer mediclaim facility to you and your family. At that point it may be difficult for you to get a cover for yourself (or your family member) if any of you or your family members has developed a disease in the meanwhile.
There can be more reasons for the same such as leaving job. So, a reasonably adequate independent cover is must for you and your family members whether you are a government employees or have a private job.
While Buying Health Insurance For Family – Family Floater or Individual Medical Insurance Cover Which One To Choose?
Once you understand the importance of having an independent health insurance policy for your family then you need to decide whether to buy a family floater or individual medical insurance cover for each member of the family.
Family Floater :- It is a policy which covers 2 or more family members for a cover which is shared by all the family members. For Example :- If Rohit took a family floater of Rs 4 lakhs for his family of five, all the five members can claim up to Rs. 4 lakh together.
Advantages Of Family Floater
- It is less expensive than Individual Medical Policy for younger family members.
- It is more suitable for families where health risk is low (young family members). As in these plans, price of the policy is decided on the basis of the age of the senior most member.
- One can add immediate family members like spouse and kids.
- In case if no or only one claim is made in a year, family member gets greater claim amount compared to what one may get in an individual medical cover. For example – Mr. Rohit bought a family floater of Rs 6 lakhs for five and during the year he only claimed Rs 20,000 for his wife’s treatment. So his family still get a claim amount of Rs 5.8 lakh.
- Less documentation.
Disadvantages Of Family Floater
- In case of more than one claim from a family in a year, the other family members will be left with little or no cover.
- The policy can be renewed only till the senior most member of the policy turns the maximum age of renewability depending on the policy. And that time, the other family members will need to take a fresh policy.
- The policy covers children till there maximum age (normally 25 years in most cases) after that they need to buy a separate policy for themselves.
- Most of the policies stop covering other family members in case of the unfortunate death of the senior most member.
- This policy only cover your immediate family members i.e only Husband, wife and children, not even your parents and siblings.
Individual Health Insurance :- In individual medical insurance policy, each of the insured members is entitled to the entire amount separately. For Example :- If three members of a family Mr. Rohit, Raghav and Rishabh bought individual health insurance policy for themselves for Rs 2 lakh, then all three can claim upto Rs 2 lakhs for their medial treatment.
Advantages Of Individual Health Insurance
- This policy is more suitable for families where the health risk is more i.e for older family members.
- One can buy this policy for anyone like Parents, friends, in-Laws etc..
- There are no age restrictions on the maximum age for the members for renewablity.
Disadvantages Of Individual Health Insurance
- The policy is expensive for the families with low health risk i.e for young family members.
- Documentation for each member of the family who needs to be insured, is required separately .
Which Insurance Company Is Better – Who Has Third Party Administrator (TPA) or In-House Claims Processing?
While choosing insurance company one thing that people are most worried about is ‘Claim Settlement’. So one thing that is very important for one is to inquire, is the company background on claim settlement good or not. There are two ways through which insurance companies handle their claim settlement process. One is by third party Administrator while the other one is by in-house claim processing.
Third Party Administrator (TPA) :- TPA handles the claim processing work for an insurance company. Or we can simply say that insurance company outsource claim settlement work on contract to some organizations.
In-House Claim Settlement :- In in-house claim settlement, insurance company handles the work of claim settlement by themselves.
It doesn’t matter who is handling the work of claim settlement for an insurance company –TPA or in-house. What is important is to ensure that you get enough information about the claim settlement service of the insurance company, you are buying the insurance from. If the service and history of the insurance company in claim settlement is good, then you can go for it.
Which One Is Better For Medical Insurance – Government Mediclaim Or Private Health Insurance Company?
Mostly people count on mediclaim from government PSU companies as compare to private insurers. The main reason behind this is, mediclaim through PSU companies is backed by government and considered to be more safe than private companies. People have a common perception that private insurers reject claims to keep there profits high whereas PSU companies being non-profit organization are more judgmental before rejecting or reconsidering a rejected proposal or a claim. But when we talk about dealing with insurance companies, it is difficult to get your work done at government companies as compare to private companies.
Overall, no insurance company is good or bad, it is always better to go for an insurance company with good claim settlement history/reviews.
What Type Of Health Insurance Policy Should You Buy – A Basic Policy Or Advanced Policy?
Now insurance companies are coming up with various types of health insurance plans. Some of them cover even the cost of your day today medicines. But as we know, the more facilities you get from your insurance company, the more you have to pay for the same. Which means, premium for full features health insurance policies are more as compared to the basic health insurance policies.
But looking at these attractive insurance policies you should not forget the main purpose for buying the health insurance plan i.e to secure yourself from any medical emergency. So, while buying a health insurance plan we should go for a plan which can offer us security against any unforeseen medical emergencies, especially the ones which we cannot afford.
How To Calculate Ideal Sum Insured (Cover) For A Health Insurance Policy?
To decide an ideal health cover which can save you from medical emergencies depends on several parameters. One can analyze these parameters to decide – what should be an ideal health insurance cover?.
You can estimate your medical expenses on the basis of following parameters:-
- Where Do You & Your Family Live? :- First depends on the place where you and your family members live, as expenses on medical treatment vary a lot in metro cities and small towns.
- Number Of Members In Your Family :- While taking family floater you should consider the number of members in your family. Higher the number of family members, higher will be the cover required.
- Age Of The Family Members :- If members of your family are at an age where health risk is higher, then health cover should be higher.
- Your Preferences :- If you want your medical treatment to be done at one of the top hospitals of the city, then you need higher cover.
- Look Long Run :- For an individual health insurance, one should analyze the amount of cover he would require once he will turn 50+, keeping the inflation factor in mind.
Try to analyze all these necessary parameters in advance before taking a health insurance policy as taking a low cover policy thinking to upgrade the same later is not easy.
How To Buy A Health Insurance Policy – Online, Direct Or Through An Agent?
Next question that arises is that whether you should buy an insurance policy offline or online? There are large number of companies and products for health insurance in the market. Choosing one which suits your needs is very important. For that either you should have a thorough knowledge of the industry and products or one who have expertise in this field should help you buy a right product.
You can take help of an experienced insurance agent who will help you in all the stages of the policy starting from buying a right product, timely payment of insurance premium, updates on procedures or policy structure (if any), claim settlement etc. You can also buy an insurance policy online.
Is Medical Tests Mandatory For Health Insurance In India?
In most of the insurance companies, there is no compulsion on medical test for people below 45 years of age.
What All Documents Are Required To Apply For A Health Insurance Policy?
In most of the insurance companies, documents required are:- Age proof and identity proof.