How much Health Insurance Cover Should You Take?

I had seen my grandparents claiming that they hardly dealt with doctors or medicines when they were young. But that is not the same picture today. Recent years have seen not only medical advancements but also an increasing threat to human life. Thus an individual in today's world is more likely to need medical services than the same person living 50 years back.

The health service sector has been on the track of fast growth in recent years. While the retail inflation is around 3.3 per cent as of 2019, the inflation rate of health services is more than 8 per cent. Which means if you had paid Rs.200 as your consultation fee last year, this year you will require Rs. 216 to get access to the same service. 
As long as the amount due is small, you can kick aside your worries. But what if you incur a medical cost exceeding five lakhs? That's when your insurance can help you.

So why is an Health Insurance needed?

Assume you are stuck with a lethal problem and you have exhausted all your options to escape out of it. What will your next step be? You might run to that one person, be it family or friend to get assistance. Insurance is like that one friend who comes to your rescue. It reimburses the medical costs incurred by you. 

In general, a simple surgery or operation from a reputed hospital could cost you more two lakhs. So health insurance will always have your back when you have exhausted all your options. 

Conditions Pertaining to Health Insurance

But if you already have thyroid, high blood pressure or any other pre-existing disease then you will have to go through a waiting period of 4 years to claim the benefits of your insurance. For ailments, the waiting period is two years. And if insurance is taken for a newborn, the waiting period is 90 days.

This is common for all health insurance. Further, you have to be free from significant health disorder or diseases to take insurance. For instance, if a cancer patient wants to take insurance, he cannot do so.

Insurances except OPD covers only hospitalization charges. They do not cover consultation fees, dental costs, etc. It is always advisable to go in for insurance at a young age. Because later on if you get sick, you will be compensated. The vice-versa is not possible. Hence the younger, the better.

What Do I Gain?

Some essential benefits of insurance include the following,

• It will help you purchase a large cover for a small premium.
• Single insurance can suffice the medical needs of your entire family.
• It will also offer tax benefits under section 80D.

A Few important types of Health Insurance

Floater or Separate?

When you are about to take health insurance, the first question will be, whether it is going to be an individual or floater insurance. A floater provides cover to your entire family. For example, you are the breadwinner of your family. You are married and have two school going kids.

And you have taken a floater health insurance of 10 lakh on your family. So every member of your family can avail the benefits of that 10 lakh. However, you will have to pay only a single premium monthly. This sort of health insurance is a perfect fit for a family. The premium in a floater policy is fixed based on the elderly member's age. 

On the other hand, if you are an individual or looking forward to covering the expenses of a person, then individual health insurance will be sufficient.  Here the premium is based on the age and other factors pertaining to the individual. Also, if more than one person of the same family is taking individual health insurance, then you will be receiving a discount.

Thoughts about getting a Top-Up?

 Your insurance will cover costs that are incurred up to the threshold placed. What if your expenses exceed it? So top-up insurance helps in such a situation. Say if you have an insurance of 5 lakhs and a top-up of another 10 lakhs. Now you have filed a claim for Rs.11 lakhs. Once you have exhausted the assured sum of 5 lakhs from your top-ups will kick in. 

If you are a working professional, you are already provided with insurance from your company. But you know for a fact, that it won’t be sufficient. Then you can go in for a top-up. A top-up will cost you less in terms of a premium than an actual policy itself.

For example, consider the case of Mr.Raju who has health insurance of 5 lakhs. When he observed an increase in the medical expenses, he decided to act upon it. He had three options. He can either buy a new health premium of say five lakhs, or he can ask his policy advisor to get his policy upgraded.

In both cases, he will be required to pay an additional premium of 6000-7000 yearly. However, in the third case, if he goes in for a top-up, the cost is significantly low. He will be required to pay an additional of Rs.2000 roughly.

Why not Add-ons?

It is advisable to go in for add-ons if you need it. If a person suffers from critical illness or maternity, then they will need money to meet with daily hospital requirements. In such a case an add-on would really make sense. Here cash is paid on a regular basis.

OPD Or Outpatient Department

As mentioned earlier,  insurance policies cover only hospitalization expenses. But an OPD covers for outpatient department expenses as well. Insurance policy with OPD cover will meet various outpatient expenses like dental, consultation, diagnostic tests and pharmacy bills. It offers tax benefits as well. The insured can make a claim multiple times. The claim can be availed within 90 days. If you are a person who falls ill frequently,  then an OPD cover can be beneficial.

How much insurance cover do you actually need?

An average small-sized family will require a cover of 10 lakh or more. And an individual will need the cover of 5 lakh or more. Take top-ups when possible or when the need arises. However, the cover you will require depends on various parameters like medical conditions, age, etc. So consult your policy provider before making your move for further details.