Personal health insurance a must, even if you have one from employer; here’s how much you should pay for it – The Financial Express
India has abysmally low awareness about health insurance: prerequisites of buying a health cover for oneself or the family, the premiums one must pay, the declarations to make, or the procedures for claiming the money. In fact, consumers or policyholders are at times skeptical if they will get coverage from their regular hospitals. However, none of that must stop one from buying a health insurance cover for self and family, even if one has a cover provided by the employer.
The claim game
“Typically all medically registered hospitals are covered in health insurance, however certain hospitals are black listed by insurance companies. In that case, insurance companies always have to inform the policyholders in advance about the hospitals that they will not settle claims from. Communication is essential on the part of the insurance companies,” Jayan Mathews, Co-founder, Vital, said at the second edition of FinancialExpress.com’s monthly series Manage Your Money.
And this works the other way round too. A policy buyer also needs to be transparent when getting a health insurance cover. “In case, customer does not disclose his/her medical conditions, the insurance company has all the right to deny the claim. While getting health insurance, you are entering into a legal contract with the insurance company and you need to be transparent about your medical history, etc. The policyholder needs to declare everything, for example, if you smoke or consume alcohol on a regular basis or if you have a pre-existing disease, etc. and not declaring it before signing the contract risks your claims ultimately,” said Amit Chhabra, Business Head – Health, PolicyBazaar.com.
How much to spend on health insurance?
The virtual discussion hosted by FinancialExpress.com also dived deeper into the kind of investment one should make for their health plan and how to make an informed decision when buying a health insurance cover. For Rohit Shah, Principal Officer, GYR Financial Planners Pvt Ltd, it works in a 30:30:30:10 framework. “We recommend what we call a 30:30:30:10 framework, according to which if your income is Rs 100 annually, you should save Rs 30, pay EMIs and rent from other Rs 30, spend Rs 30 on all other expenses (food, groceries, travel, utility bills, education, etc.) and reserve at least Rs 10 for your risk management budget, which includes insurances,” he said.
However, Sachin Mahajan, National Head – Health Insurance, Bajaj Allianz, stressed that people should be completely covered and get as many insurances as possible and there should be no gap in their insurance portfolio, irrespective of thinking about ratios. When asked his framework around what kind of investment one should be making on health insurance or towards their risk management budget, he said, “There actually is no number or fixed ratio to this. If something happens to you, the cost that will be incurred in the overall treatment procedure will go far more than the premium you will be paying for any XYZ insurance. I feel one should keep adding various kinds of insurance to their portfolio.”
He also maintained that it is ‘extremely important that people get their own health insurance and not be dependent on only the corporate cover or the health insurance provided by the employer.
Further elaborating on the ‘how much’ part of the investment portfolio, the panelists maintained that there is no fixed amount for premiums and overall cost of a health insurance, but it does depend on a lot of factors. “Premiums depend on the type of coverage you are taking, your location, age of the policyholder, by medical inflation, cost of medical technology and advanced treatments you are taking, etc. The overall cover amount also determines the premiums you will be paying for your health insurance,” said Jayan Mathews.
