Horror stories of families broken financially are frequently repeated, since generations. Many of us have direct experience or know of friend’s families who have piled on debt, sold precious heirlooms or properties, and occasionally even sacrificed career to take care of a loved one.
Recent decades have seen a wide spread and availability of medical insurance. In recent years insurance companies have spread their focus to specific illnesses through ‘Critical Illness Plans’ that cover illnesses having high financial impact, or are life threatening.
Does your family carry the risk of possible penury from astronomical medical costs? We believe that without unemotional planning and execution of the plans, every family carries the risk.
We will suggest some steps to reduce, or even eliminate the risk to the future of an entire family for one or more generations from significant medical costs.
The simplest and non-negotiable safeguard if to have sufficient medical insurance. The amount required needs to be worked out individually, but in a metro Rs. 5 lakhs in a floater policy for a family of 4 may be the minimum coverage to consider. Increase this depending on the family history of illness and the kind of hospital you are likely to use – a plush corporate hospital will obviously cost a lot more than a hospital run by a charitable Trust.
Medical insurance may be taken from more than 1 insurance company at the same time. If you believe you may need more coverage, take policies from 2 companies. This has the additional advantage of utilising the company that provides faster service – time is vital in medical emergencies. Insurance rules will ensure that you cannot claim the same amount from more than one insurer. Make your claims from one insurer to accumulate the no-claim bonus at the other till you need it.
Take medical insurance personally even if you get coverage from the employer. This will ensure coverage if you change jobs, or if your employer discontinues the perk at some time. Continuity of coverage post retirement is essential and it would be easier and cheaper to continue renewing the policy you hold, than getting an expensive policy, with limited coverage at an older age.
Serious and critical illnesses can be very expensive to treat. Their incidence is also constantly increasing either due to the modern lifestyle, or to superior diagnosis. Insurance against critical illness such as of heart attack (covering bye-pass surgery), cancer, bone marrow transplant, stroke, kidney failure, major organ transplant, total blindness and coma are among the common serious situations or illnesses that are offered by various companies. Critical illness plans of insurance companies pay out a fixed amount on the diagnosis of the illness, rather than pay for the treatment. This is a sort of compensation for the event and pain endured. If you have a fear of such illnesses, or a high incidence of such illnesses in your family, neighbourhood or community it would be worth taking critical illness cover as it costs a fraction of the insurance coverage amount. Isurance companies have their own standard lists of critical illnesses covered, with a list of illnesses that may be added on. Most insist on a 30 day window of the patient’s survival after diagnosis with the condition before making a payout of the sum assured.
Personal accident insurance is a cheap and important cover, providing for compensation loss of limb or life, and even income due to immobility due to accidents at home or outside. It is not limited to motor accidents.
Other steps to be taken in safeguarding self and family against financial stress are social and personal.
The individual could decide, preferably in consultation with the family of limits to the medical treatment he wishes to have. An example has been set by the Pope Emeritus Benedict who has published a “Living Will” with instructions that he should be subject to extreme life prolonging procedures, including use of the ventilator. While this is a hard and emotional decision to take, it is one that more evolved families prefer. A Living Will is not yet legal in India, with our laws leaving it to the immediate family of the affected person to decide on the extent of treatment to be provided. Moral pressure would however work on the family if there is clarity of thought and communication in the matter of limiting medical treatment and costs.
Finally, eat wisely and exercise regularly. This is the best insurance you can have, so that you live a fuller, richer life.
The author is CEO & Founder, Right Horizons