Buying Private Health Insurance

Medical treatment costs are increasing every day and getting good quality treatment or surgery done from modern hospitals without health insurance is likely to significantly diminish your savings. A health insurance plan is one of the best investments one can make in order to firmly secure health coverage for themselves as well as their loved ones.It's true that most employers nowadays provide a group insurance policy for their employees. But that alone may not be sufficient and it only lasts till you’re employed with the company in question. All the limitations of a group policy makes it essential for everyone to buy a private health insurance policy that provides extensive health coverage.But do you need health insurance? Let us take a look at some scenarios which make it essential for you to buy a health insurance policy.

If you’re self employed and run a business, you have to buy a private health insurance policy for yourself since you cannot get the benefits of an employer provided group policy.

A company policy is active only until you remain employed with the company and ceases to exist once you leave the company. So if you’re between jobs, you will most likely be without any health coverage. This makes you the perfect candidate to get an independent, private health insurance, so that your medical expenses remain covered.

Yet another group of individuals who cannot get a group policy through their employers are part-time employees and freelancers. Companies usually provide group health coverage only to full time employees and not part time ones and freelancers. Therefore, it becomes necessary for such people to get a private, individual insurance plan.

As we know, a family floater policy covers the entire family, including children, spouse and parents, if specified. But children under such a policy are only covered until a certain age, which can be between 21 to 24 years. After you cross the age limit, the family floater policy that your parents got for you won’t be applicable any more, and you will need a separate health insurance policy.

A lot of people are in two minds when making a decision regarding health insurance purchase. The number one factor that makes them hesitate is whether they will get to use the policy after paying the premium. Even if your policy remains unclaimed, remember that you will have the mental assurance that the insured sum is always there for you in case you require medical treatment.Let us take a look at a few reasons why you need to purchase health insurance as soon as possible.

Rising cost of treatment

Medical cost inflation is on the rise and you can never predict when you or your loved one might require medical treatment or surgery. If such a time comes, and you do not have a health insurance policy, it can become very difficult to bear the costs of medical treatment. Your hard earned savings are likely to get eroded and this can dent your finances significantly. A health insurance policy avoids all these hassles and lets you get treatment for you and your family without the financial burden.

Lifestyle changes

The modern day lifestyle consists of long working hours, a hectic schedule, professional pressure, junk food, long sitting hours and not much exercise and focus on health. All this will eventually lead to a host of lifestyle disorders like high blood pressure, diabetes, cholesterol etc. With our current lifestyle, we are more likely to contract diseases and a health insurance plan can at least protect us from financial strain if we ever require expensive medical treatment.

Access to the best treatment available

When you pay for medical treatment from your own pocket, you have to consider affordability and choose a hospital based on your ability to bear the medical expenses. However, if you have a health insurance policy, you have access to some of the top hospitals in the insurer’s network and you can rest assured that you will get the best medical facilities available. You do not have to worry about finances because your treatment will be covered by the insurer, and you can opt for hospitals with the best facilities irrespective of your financial standing.

A wide variety of health insurance products are available on the market. To help you make the best choice, given below are some points that you must keep in mind before making a decision.

Get a policy with adequate sum insured

You must understand that the sum insured of a health policy is such an important factor when choosing a policy. Always choose a policy that has a sufficient insured sum that will allow you to get the required treatment without having to pay from your own pocket. Medical treatment is expensive, for eg. A heart surgery like angioplasty costs approximately Rs.3-5 lakh depending on the hospital and to come up with this amount without an insurance can be tough for middle class families. That is why, you must choose a policy with at least a coverage of Rs. 5 lakh or more.

Go for maximum coverage and minimum exclusions

All health insurance policies do not cover all illnesses. Some illnesses may be excluded, which means that you cannot file a claim for those illnesses. It is important to understand exactly what your policy is covering and the extent of it. All policies have a list of exclusions and you must go through them carefully. A famous saying is that you should go for a policy with maximum coverage and minimum exclusions. Also, a proper understanding of your family history can help you decide whether a certain illness simply cannot be excluded from your policy. In that case, you can look for other policy options.

This is the first question that comes to mind when we decide to buy a health insurance policy. The answer to this depends on a lot of factors, the most important of which is your age. We know that younger people are less likely to get major ailments while older people are more likely to contract them. An insurer understands this too, and hence, the premium for younger persons is significantly lesser than that for older persons.The premium also depends on the insured sum that the insurer has promised. Higher sum insured will attract higher premiums and vice versa.To put it in perspective, let us take a look at the approximate premiums for health cover of Rs. 20 lakh across various age brackets:

Nowadays insurance products are so abundant that you can buy a health insurance policy from literally any bank or non-banking financial company (NBFC). All these insurance providers offer a plethora of options that you can choose from and tweak according to your needs. You can either apply for insurance by visiting an insurance provider’s office or visit their website and apply online.

When you decide on a policy, look for the following key factors

Is the waiting period too long for some diseases?

Make sure the waiting period for some diseases is not longer than 2-4 years. Anything longer is a strict no-no and you must look for other options.

Copayment clause

Policies may have a copayment clause, which means that the insurer will not pay for the entire treatment amount. Some percentage of the cost will have to be borne by you. Always ensure that there is no copayment clause in your policy and even if it is present (like in policies for the elderly), the copayment percentage is low.

Pre and post hospitalization expenses

Make sure that your policy also covers expenses during the pre and post hospitalization period. This can include diagnostic tests and other charges before and after the actual hospitalization period.

Ambulance coverage

Many policies also cover expenses for ambulance requirements when the patient has to be transported in an emergency to the hospital. Check whether this and other miscellaneous charges are covered.

We believe this comprehensive guide will make it easier for you to understand everything there is to know about health insurance, and guide you towards making the best possible decision when you buy a health policy for you and your family. Choosing a policy can be overwhelming sometimes, but now that you have an idea of the terminology, you can confidently go about looking for a policy. Always remember to ask all the questions to the representative or agent selling the policy and clear all doubts. You do not want any surprises when you claim the policy and clearing everything right at the start will eventually allow to fully utilize the full benefits of the policy.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.