The past few months have been a difficult time for many individuals, with companies such as Google, Microsoft, Amazon, ShareChat, and Swiggy announcing layoffs. These layoffs have not only affected the employment status of thousands of individuals, but also their access to health insurance benefits provided by their former employers. This is a clear indication of how the present economic scenario is affecting the well-being of individuals, not just financially but also in terms of their health and well-being.
It is a well-known fact that healthcare is a basic human right and access to healthcare should not be dependent on one’s employment status. This highlights the importance of having a personal health insurance cover.
It is important to note that personal health insurance policies can vary greatly in terms of coverage. It is important for individuals to select a comprehensive and individualized policy that best suits their needs. This can include coverage for pre-existing conditions, hospitalization, and even alternative forms of treatment such as Ayurveda and homeopathy. It is important to remember that your health is your greatest asset and investing in a comprehensive personal health insurance policy is a wise decision.
In addition to providing financial protection, personal health insurance also offers peace of mind. Knowing that you and your loved ones are protected in the event of an unexpected illness or injury can provide a sense of security and stability during difficult times. Moreover, personal health insurance can also provide access to better quality healthcare and a wider range of treatments.
In conclusion, amidst the continuous layoffs, it is imperative that individuals consider obtaining a personal health insurance cover. With the ongoing layoff season, the need for personal health insurance has become even more crucial. A personal health insurance policy provides individuals with financial protection and peace of mind during difficult times.
However, it is important to select a comprehensive and individualized policy that best suits your needs, one that covers all your health-related needs and also takes care of your family. The present economic scenario is uncertain and the future is uncertain, but one thing that is certain is that your health should never be compromised. Investing in a personal health insurance policy is a small step towards ensuring that you and your loved ones are protected in the event of any medical emergency.
With health insurance policies becoming costlier, individuals often opt for higher co-payment which helps to reduce the premium. While the premium may be less in such a case, the policyholder will pay more towards the treatment rather than saving on the premium amount as the co-pay amount has to be paid before the insurance claim is paid off.
Experts recommend a policy without co-payment or deductible so that the insurance company bears the entire claim amount. Under the co-pay clause, either a specific percentage of the medical expenses or a fixed amount is borne by the insured and the rest is taken care of by the insurer. Insurers put co-pay condition in various ways depending on the terms and conditions. This is applied to costs involving hospitalisation, any tests, visit to doctor, etc.
However, going with the higher co-pay or deductible could be a risky option as it may put the policyholder in a situation where he is unable to afford the hefty medical bills owing to a higher out-of-pocket payment policy which can ultimately put the insured under unwanted financial stress.
Co-payment is mandatory for senior citizens over the age of 60 years as the treatment expenses for them would be on the higher end as compared to other age groups. Other than that, only a few insurance policies have a mandatory co-payment clause. John Maybe, executive director, Coverfox Group, says most of them provide policyholders with a choice of co-payment option, allowing them to pay lower premiums. “Co-payment is provided to people on the basis of their age group. Depending on their critical illnesses or the kind of risk involved, a policyholder can apply for a co-payment option of 5-20%.
Certain situations such as previous and current medical conditions, physical state, financial condition, lifestyle, etc., must be taken into high consideration before opting for higher or lower co-payments. Goyal says one must understand that the primary reason for any policy seeker to buy a health insurance is to be financially supported during an unexpected medical emergency. Hence, you must be sure about your financial capacity to pay the money out-of-pocket while agreeing for co-payment option.
Opt for a comprehensive cover preferably
Opt for a comprehensive health cover and take certain essential riders depending on your needs. Also, policyholders can take a super top-up plan with higher deductibles, which will be cost effective. Also, before buying a health cover, it is important to assess the size of cover that you will need depending on the age of family members, exclusion, specific waiting period, etc. Also look at inflation adjusted sum insured, disease-wise sub-limits, room rent and ICU sub-limits, restoration benefits, etc.
Ideally, go for a sizable base plan insurance that covers your medical emergencies, along with a higher deductible super top-up plan. This, John Maybe of Coverfox Group says, will allow people to get their medical expenses covered even if they have exhausted the sum insured of their regular health insurance policy. “Also, to save out-of-pocket expenses, one can opt for a few riders consumable covers that include daycare expenses, less waiting period for pre-existing diseases (PED) or the option for cashless hospitals, etc
Like many financially-savvy youngsters, Prakriti Verma, 23, started investing in mutual funds through the systematic investment plan (SIP) route soon after she landed her first job.
However, the Delhi-based digital marketing professional has not accorded similar importance to health insurance.
Health insurance is not only for the ‘aged’
Many individuals in their early 20s feel the same, though the fact is that health emergencies could come knocking on your doors without much warning.Yet, a very small section of people in India purchase health insurance policies in their early 20s. Most of them realise the importance of health insurance cover in their 30s or 40s, or worse, closer to retirement. Financial advisors recommend buying a health insurance policy in the early stages of one's career due to a number of reasons. For one, younger individuals are less likely to be suffering from chronic, lifestyle diseases such as diabetes and hypertension.
This is why many health policies do not require younger individuals to go through health check-ups prior to a policy purchase. Naturally, premiums, too, are cheaper for those age brackets.
Moreover, a health insurance policy also covers accidents and several ailments such as infectious diseases and appendicitis that are not linked to age.
“Diseases haven’t really remained age-specific now. And more than that, something like a dengue or typhoid can affect anyone,” says Kapil Mehta, Founder, SecureNow Insurance Broker Ltd. The outbreak of COVID-19 has made people more aware about the importance of having a health insurance policy in place. To start with, those in their 20s can start with a cover of at least Rs 5 lakh, and review it every five years to account for healthcare inflation.
Motor and cyber covers, too, critical
If you own a motor vehicle, a car or a bike, buying a motor insurance automatically becomes a must. While a third-party liability policy is mandated by law, you should also buy own damage policies’ to protect your vehicle against damage.
Another policy that has become increasingly relevant nowadays is cyber security insurance. With the rise in the digitisation process of most tasks and increasing use of social media, safeguarding yourself against any risks that can threaten your identity has become a must. It is particularly important for youngsters and senior citizens to own a cyber insurance policy. Buying a cyber insurance policy for a sum insured of Rs 25,000 will not cost more than Rs 200-300, he adds. You need not rush into buying a pure-protection term-life insurance cover if you do not have dependents. Essentially, such pure risk covers are meant to financially secure family members’ future in case of the policyholder’s death. So, if your family is not dependent on your income, the decision can wait. Employers’ group cover not enough
Problems such as pollution, and lifestyle issues such as lack of physical activity, long working hours and junk food have increased the chances of contracting lifestyle ailments.
In the wake of rising healthcare costs, the health coverage provided by employers – typically, Rs 3-5 lakh – could fall short in times of need. More importantly, it will cease to exist once you switch employers. If you were to fall sick or meet with an accident when you are in between jobs, you have to pay for the treatment expenses yourself. Therefore, it is prudent to buy your own health insurance policy on top of the coverage provided by your employer.Perks of buying health insurance early
Most health insurance plans come with a certain waiting period for pre-existing illnesses. During this period, you cannot make any claims, even in case of a health emergency. Therefore, buying a policy in your 20s is a wise idea as most illnesses start showing up with older age, by when you would have exhausted your waiting period.
Companies also offer a cumulative bonus of 5-10 percent of the sum insured, when you don't file any health insurance claim in the preceding year. This is more likely to happen in your 20s when you are relatively healthier.
Therefore, you would have access to a larger cover when you grow older, without having paid any premium for this additional cover.
When you opt for a health insurance policy in your 20s, you get more time to pay the premiums, and, hence, the premium rate becomes more affordable. For the same cover, you would pay a significantly higher premium in your 30s and 40s.
No shadow of pre-existing illnesses
It is tough to get a good insurance cover when you already have a medical condition. However, when you buy a health insurance plan in your 20s, any ailment diagnosed after the purchase is automatically included in the policy.
You will also be able to negotiate the best health insurance policy when you are healthier, without facing rejections or pre-conditions from the insurer.
No pre-policy issuance health screening
If you opt for a health insurance plan after you turn 45, companies typically ask you to undergo pre-policy health check-ups. If the reports are not encouraging, companies charge a higher premium. However, if you buy a policy at a younger age, you may not even need to undergo any pre-medical check-ups.
You can claim tax deduction of up to Rs 25,000 on premiums paid on health insurance policies under Section 80D of the Income-Tax Act, 1961.
If someone falls in the tax slab of 30 percent, and pays an annual premium of, say, Rs 10,000 for a health insurance policy, the effective premium outgo is only around Rs 7,000 for that person
Insurance premiums have skyrocketed in the last few years. This has led people to explore ways to keep their insurance premiums in check. One way to do this is to negotiate your premium during policy renewal. Deploying the right negotiating strategy when renewing your policy may get you significant financial relief in terms of premiums. The question is, how should you negotiate with your insurance provider? Here are some essential points that can help you negotiate and save money during policy renewal.
1. Compare insurance prices before renewal
Several policy comparison tools are now available online, which help you compare your existing insurance policy versus those available in the market. You can compare different policies against your own based on factors such as features and price. When switching policies from one provider to another, don’t let the price be the only criterion. Consider other crucial factors such as claim settlement ratio, claim processing time, post-sales service, and consistency in claim settlement before you switch. In case of car insurance renewal, confirm the new provider’s tie-up with your car manufacturer so as not to lose out on the cashless claim benefit.
2. Increase the deductible
Another way to lower the cost of your insurance coverage is increasing your deductible in case of a claim. The deductible is an amount the policyholder agrees to pay to cover expenses in the case of a claim. For example, in the event of a claim, you agree to bear expenses worth Rs 1 lakh before the insurance coverage kicks in. The deductible directly impacts the cost of your insurance – a higher deductible can lower your premium significantly, be it car insurance or health insurance.
When increasing your deductible, keep your financial situation in mind. Increase it to an amount you can afford without affecting other expenses. A higher deductible can help you save on premiums when you are young. But, if you are about to or have already retired, avoid a voluntary deductible. Since old age comes with increased medical issues, a voluntary deductible may turn out to be costlier with frequent medical expenses.
3. Rework the size of the insurance cover
If your car is old and has been driven extensively, its depreciated value is likely to be lower than its insured value. Considering this, it might be worthwhile to reassess the car’s insurance coverage to save on premiums. In the case of a health insurance policy with high premiums, you can save money by lowering the cover size of your base policy. Instead, purchase an adequate super-top-up health policy, which may likely be cheaper than the base health policy. However, as per applicable policy rules, your new super top-up policy may be subject to a waiting period. So, if you are 45 or above, or have a pre-existing medical condition, avoid disturbing your base policy size.
4. Avoid unnecessary add-ons
Insurance providers often offer add-ons with insurance policies which can drive up their premiums. Assess your needs and decide whether or not to take the add-on. If you have an add-on you no longer need, remove it when renewing your policy to save on premiums.
5. Renew the policy before it expires
One of the most important benefits of renewing your policy before it expires is to receive your No Claim bonus (NCB). Insurers offer the No Claim Bonus to policyholders who have had a claim-free policy year. Health insurance providers usually increase the insurance cover size as a reward against the NCB. On the other hand, car insurance companies typically offer NCB benefits through applicable discounts on insurance premiums.
Claim the active life benefit
Some health insurance companies offer premium discounts on renewal to policyholders who lead an active life. If you are a fitness enthusiast, ask your insurance provider about such a discount, as it may help you save on premiums. Insurance is a crucial risk-mitigating tool which must be chosen carefully. To successfully negotiate for better premiums, prepare in advance and discuss the terms with your insurance provider at the time of renewal.