Guys, we talk about different types of investments on this channel Like Stocks, Mutual Funds, Real Estate Gold, etc. But we never discussed that where should be our first investment. Its answer is there in another question that What is the biggest asset for us?
For me, the most important asset is myself Because my earning potential is unlimited and that’s why it is very important to take care of ourself. There is a famous saying ‘If you have life, you have the world’. If we’ll take care of ourself then only we can realize our earning potential. That’s why it is very important to invest in your body and health and that’s why The first investment we should do is to get Health insurance.
But when we go to buy health insurance, many questions come to our mind Do I need health insurance according to my career stage or age? Or how much total cover should I take? Sometimes some companies provide health insurance to their employees so they think that they’re done But is that cover sufficient? If you buy any health insurance policy then what is included and what is excluded On what you should focus more on? And if we’re buying any policy then should we buy the cheapest one?
Sometimes, even if you buy the policy, the claim gets rejected Some pre-existing diseases are not covered in that What are restoration benefits, top-up cover, and super top-up cover? We’ll discuss all these so stay tuned with this article.
We’ll cover this article in 4 parts. Firstly, we’ll see the benefits of health insurance. Secondly, we’ll talk about inclusions and exclusions that means about the features what all things are included and excluded in a standard policy and what all things to keep in mind.
On third, we’ll talk about how much total cover we should take Either as an individual or as a family And finally, we’ll watch a live demo on how to buy health insurance and what all things to keep in mind. Let’s discuss the benefits.
Benefits of health Insurance
The first benefit of health insurance is that your savings remain untouched at times of emergency Let’s say any medical problem occurs in your family And as we know medical costs are very high nowadays Surgery or treatment cost for any critical illness is very high like 5-15 lakhs So in this case, your savings will not be affected much and you’ll get total cover from health insurance. 2nd huge benefit is Cashless treatment and we don’t have to pay anything from your pocket.
Most of the standard policies have a network of hospitals where you can get cashless treatment. 3rd benefit is, there are Corporate Plans Top-up. Many companies provide 1.5-3 lakhs insurance cover. But it’s not sufficient in most cases so you can Top-up that also. 4th big benefit is, if you buy insurance at a young age, then your premium is less and most of your diseases are covered.
Because there are fewer chances of diseases at young age But over a period of time, the chances of diseases or any illness increases Most of the policies have a waiting period for pre-existing diseases of around 3-4 years If that will be covered then any other disease will be covered in future 5th benefit is, you get cover for all the lifestyle diseases Nowadays most of the jobs are desktop jobs because in this COVID time, most of the people are working from home
So it becomes more important in these times And 6th benefit is, you get many other benefits other than hospitalization like Maternity benefit or daycare facilities.
Many surgeries or treatments do not require hospitalization That is also covered in many policies. Many viral diseases are covered and there are special policies for COVID these days. 7th benefit is, Tax benefits Under Section 80D, you get a tax deduction of Rs. 25,000 if you choose the old slab. However, it’s not a big thing but it may be a big advantage for some people. Now let’s talk about Inclusions and Exclusions.
Features Of Health Insurance
The first feature you have to check in any policy is In your nearby hospitals, check which policy is providing cashless treatment. Secondly, check that whether pre and post hospitalization charges are covered or not Pre and post hospitalization charges are the charges which include during treatment charges And along with that, 30-60 days of pre-hospitalization period which includes consultation of a doctor, diagnostic test, any physiotherapy, etc.
And post-hospitalization may also include physiotherapy, diagnostic consultation. So many policies cover 30-60 days of pre hospitalization expenses And covers 60-180 days post-hospitalization expenses.
So keep this in mind as well. You should also check Day Care Facilities because Nowadays, many surgeries last just for 1 day That means you don’t need night admission in hospitals Many policies do not cover Day care facilities So keep this in mind as well.
Along with this, many policies cover Ambulance charges as well. You have to check the coverage and there should not be any cap on different diseases or treatments. For example, your policy may have a limit of Rs. 50,000 on maternity benefits And maybe your expenses come out Rs. 75,000-1,00,000. So keep this in mind.
Besides this, some policies also contain a Co-pay option That means you also have to give some money So if treatment costs Rs. 1 lakh and 10 % is Co-pay clause Then you have to pay Rs. 10,000 so it’s better not to have a Co-pay option.
One more thing to keep in mind is how much Room Rent is available All these charges are linked to your room rent and let’s say room rent is high under your policy So you have to Co-pay accordingly That’s why it’s important to see the room you would prefer according to your lifestyle. One more benefit which is available in some policies is the Restoration benefit.
Let’s say all your cover is exhausted in one year. Let’s say Rs. 3,00,000 cover exhausted for a family member So that cover will be restored for another member.
Hence, restoration benefits are also there. And in some policies, These restoration benefits are available during hospitalization. Similarly, there’s one more benefit which is the Top-up benefit. If there is a company insurance going on and if someone wants to take Top-up insurance then that is a very good option Let’s say you have a cover of Rs. 3 lakhs and you want it to be Rs. 6 lakhs Then you can buy an additional cover of Rs. 3 lakhs which is called Top-up cover.
Top-up cover means if your Rs. 3 lakhs cover is exhausted then additional Rs. 3 lakhs cover will be available.
And there is one more beneficial plan which is Super Top-up cover In which your multiple claims are also covered. And multiple claims means Let’s say a family member fallen sick and it cost Rs. 1 lakh for the treatment Then the remaining Rs. 2 lakhs got spent on another family member and the total cover exhausted.
Now you will get a Top-up of Rs. 3 lakhs again which is called super Top-up. And if you buy Top-up Or Super Top-up cover then your existing conditions are continued as it is That means the waiting period is continued as it is. This is the benefit of Top-up or Super Top-up. Now let’s understand what is Pre-Existing Disease and Waiting Period Because most of the claims used to get rejected because of this earlier and today as well. So to tackle this, IRDA defined the Pre-existing diseases properly. So the disease diagnosed 48 months prior to the date of policy buying is called Pre-existing disease. And this is considered basically for your claim.
So for example, if someone is suffering from diabetes and let’s say he took the policy in July 2020 and he was already suffering from diabetes Hence, it is a Pre-existing disease.
So he can claim the cost of its treatment from the 5th year onwards which means from July 2024.
But definitely, if you have any existing conditions or illnesses, then your premium increases. And this waiting period can be different for different diseases It is generally 2-4 years of duration. Along with this, remember that you don’t have to hide your existing condition.
If you smoke, you’re diabetic, or have any other type of heart condition then clearly mention it Because if you will not tell and later on it got detected, then your policy may get terminated. Besides this, you can check the No Claim Bonus in your policy. Because of that, conditions of decrease in premium maybe there or you get extra cover.
So let’s say you took policy for the current year without doing any claim and you were paying the premium regularly And let’s say you continued that policy, then you may get 10% extra cover or a rebate of 10%.
So No claim bonus may go up to 50-100% So check how much No Claim Bonus is available. Along with it, if you have No Claim for any year, then you get Preventive Health Check-up in many policies In which you can do your health check-up in a hospital and you get its refund. Let’s say you didn’t claimed for 2 years then you may get Rs. 2500 to Rs. 5000 So it depends on how much is your total cover. Now let’s come on our 3rd segment How much Health Insurance Cover should you take?
How Much Health Cover
It depends on many factors like your age, medical history of the family, existing conditions, nature of your job, is there any danger involved in that, income level, lifestyle, etc? But still, we’ll talk about some thumb rules.
If you’re buying a policy as an individual, then you should take a minimum cover of Rs. 3 lakhs because there are fewer chances of existing diseases at young age And as your age increases, you can increase your cover with that. Now let’s talk about the Family cover.
If we talk about a standard family with 2 adults and 2 kids then You should take Rs. 5-10 lakhs standard cover And there are some thumb rules here as well You can choose one among the 2 thumb rules Like 50% of annual salary or you can choose what’s the cost of heart surgery in your city. If the cost of heart surgery in your city is 4 lakhs then you can choose the cover of Rs. 4 lakhs But if you are in a Tier 1 city, it may go around Rs. 7-8 lakhs so you can take cover according to that. But it also depends on your income and lifestyle.
So a minimum cover for a family should be Rs. 5-10 lakhs. Besides this, if your parents are above the age of 50-60 years, You can keep them in a separate policy Otherwise, your premium will be very much high because the premium is decided according to the highest age. So let’s come on to our final segment that, How should we buy health insurance?
So firstly, understand that the cheapest is not the best. the brand value of a company is also very important when we buy insurance Because we are actually buying a promise So it becomes important that whether that company will pass our claim or not.
So for this, we can check Incurred Claim Ratio and Claim Settlement Ratio. We’ll talk about these in detail that what exactly these are and how to check them. But before that, let’s talk about 1-2 more points. Many times an agent or a bank approaches us for the policy There we have this disadvantage that we cannot compare the insurance
And maybe that person had his vested interest And maybe he’s selling you that policy in which he has more commision That’s why the best way is to purchase online insurance For example, Policy Bazaar is a good website from where you can purchase your insurance.
I also purchased insurance many times from this website. So let me give you a quick demo. We’re on the website of Policy Bazaar and this is the Health Insurance section Different types of health insurance are available here Normal health insurance, family, senior citizen insurance. And there is also special health insurance for Corona Virus.
Now let’s get into the Normal Health Insurance plan and fill in the details. After that, go to view plans and let me select an individual plan And the age I selected is 25 years. Click on continue Select the city. Do you take any daily medication or not? I am selecting No here and let’s see what all plans we’re getting.
So the plans are starting from Rs. 206 per month and you’re getting cover of Rs. 5 lakhs by Edelweiss. So we can compare all the plans here. After this, we’ll go to features. So you can check all the features about which we discussed Here are all the highlights and features. Hospital room eligibiity. So we can check all these in details. What is the claim process and which are the cashless hospitals.
You can also compare plans by yourself. I will give the link in the description and comment. Along with this, there are some more benefits of using these online platforms.
Like executers will help you if you are not able to understand If you’re facing a problem in claim settlement then the claim settlement team will help you. And nowadays, claim settlement teams are there in hospitals and they will help you. Besides this, because of this Covid situation, Medical test is usually Telemedical or Video medical.
So we saw how to do the online comparison of health insurance. Along with this, we should also check the conditions of the company also We can check that by mainly 2 ratios 1. Claim settlement ratio. This means the ratio of how many claims did company passed out of the total claims in a year.
If this ratio is greater than 85% then we can say that it is a healthy ratio and you can consider that policy. 2.
Incurred claim ratio. That means how much money company pays for paying the claims out of the total premium they received. So if this Incurred claim ratio is too much, then that is also not good. Let’s say if it’s more than 90% then maybe the company cannot pay the claims due to lack of money.
And if it’s less than 50, then maybe the company is charging more premiums and they are more focused on profitability. So a healthy ratio is ideally between 70-90 but you can consider 55-60 on a lower side. And the flexibility of these ratios depends on the brand value of the company. I hope I solved most of your doubts related to health insurance.