Health Check

This can be confusing: which one to take first-a life insurance or health insurance policy? The answer to that is pretty obvious-health insurance, before taking life. Yet, chances are you will come across people with little or no health insurance, but have some form of life policy or the other. The odds of falling sick are much more than those of dying, but people rarely show the maturity to go for a health insurance policy when they start earning. The few who do have it, is because of an employer provided policy.

Logically, the moment you are financially independent, you need to take a personal accident insurance, followed by health insurance, before taking life insurance. "Accident related outcomes of disability-partial, temporary and total, can set you off financially. Having a policy to address this situation is essential," suggests Antony Jacob, CEO, Apollo Munich Health Insurance. The next and most useful form of insurance should be to protect against healthrelated risks. Rising healthcare costs makes it prohibitive to be left without a health insurance policy at any stage. Both personal accident and health policies should stay with you throughout your life.

Good health call

For 28-year-old Mumbai-based Harshada More, her employer-provided health insurance was her first brush with health insurance. But, she decided to go for an individual plan too. "I wanted to take a policy when I was young and healthy, than being denied one when I am older and will definitely need it. As after a certain age pre-insurance medical tests are mandatory, I felt it would be a better decision to buy a health plan sooner," she says. She is not content with just the policy backup, she is equally focused to stay healthy with regular dose of exercise and healthy lifestyle habits.

Fast-paced lifestyles, a sedentary work environment and paucity of time are all factors resulting in poor health among the young. One way is to work on one's fitness and health, the other is to ring-fence healthcare risks with adequate health insurance. An independent cover can serve as a fallback option, absorb any claim amount exceeding your corporate sum insured, if you have a policy from the employer, and act as a bridge when you are devoid of a group cover during job transition.

MNC executive-turned-entrepreneur Ranganath Jagannath, 47, is a strong advocate of having an independent health policy in place. "I ensured that I had adequate health insurance for myself and my family before taking the plunge into the world of entrepreneurship. When you are in a corporate setup, you are used to the group cover provided by your employer, but you are on your own once you decide to float your startup," he explains.

Choosing a policy

An individual plan is good to start, with a Rs 5 lakh cover when you are young and single. But, as soon as you enter your 30s or get married, you need to look for more than basic health cover. "Have a clear roadmap of reviewing the cover and upgrading it before you cross 35 or get married, whichever is earlier. Once you cross this milestone, buy the highest cover you can afford," suggests Mahavir Chopra, head - Health, Life and Strategic Initiatives, Coverfox.com.

There are plenty of choices in health insurance-there are policies under which the whole family can be included, known as a family floater, there are policies with clauses that are beneficial and those that are detrimental in future. There are instances when even a policy with a high insurance cover does not work fully because of sub-limits in it. It becomes necessary to learn about these things or approach an expert who knows which policy is suitable with the future in mind. Do not limit the choice of zeroing on a health policy just on the basis of the premiums you would pay.

Buy health cover with an eye on the future and not just your current needs and cost of treatment procedures. "Buy a cover that is at least twice the current cost of treatment. The most expensive disease today is cancer, which costs Rs 8-12 lakh when treated in a grade A hospital. So, the same treatment ten years down the line might cost between Rs 16-24 lakh," says Kapil Mehta, MD, SecureNow.

While a single, large cover is desirable, it will also come with steep premium that may not necessarily fit into every family's budget. "Medical costs have been rising at 15-18 per cent a year, which calls for larger covers. But not everyone can afford to pay high premiums. This is where health top-up plans are useful. They reduce costs through in-built deductibles," explains Rajiv Kumar, MD and CEO, Universal Sompo General Insurance. Look for a top-up health policy for efficient addition at an incremental premium.

A top up cover actually covers you after a threshold limit that is already exhausted in the policy. For instance, on a top up health policy of Rs 10 lakh cover, with a threshold limit of Rs 5 lakh, the policy will come into force only when you have a claim above Rs 5 lakh. This way, if you have a simple health policy of Rs 5 lakh cover, taking a top-up for Rs 10 lakh or Rs 20 lakh will enhance the scope of the cover in a cost-effective manner. There are variants like super-top up, making the concept of top-up and threshold more expansive.

Buyer beware

Choose a policy that meets your criteria and imposes minimal restrictions. "It should have appropriate coverage without any sub-limit or restrictions of hospitals. There should not be high loading in premium for any disease that one is living with," recommends Dr S Prakash, COO, Star Health & Allied Insurance.

Look for policies with broad terms of coverage and fewer restrictions. "An ideal health insurance plan should have no co-pay or sub-limits and have a wide hospital network for cashless benefit," cautions Jacob. If you do not follow this, you may land up with a policy you may not benefit from at the time of need. "If any life threatening ailment figure under permanent exclusions, such products should be avoided. Health insurance cover should be available in need, particularly during emergencies," stresses Prakash.

"Stick with your policy for as long as possible, because the longer you stay the better it is. Even if slightly better products come out later, it is advisable to keep your policy," says Mehta. After all, claim settlement record is the most important parameter while choosing between policies. Do not be in the chase of a perfect health insurance policy because things are changing rapidly, and chances are you will need a mix of health insurance policies than rely on a single policy throughout your life.

preeti.kulkarni@outlookindia.com