Health insurance is now widely considered a basic need, and smart consumers are increasingly exploring the possibility of getting better facilities out of their policy. Usually, consumers opt for basic health covers in the range of Rs 3 to 5 lakh. But these covers are limited in many ways such as the room rent limit. There may also be sub-limits on certain forms of treatments and illnesses.
As a consumer, you do not want to find yourself at the limits of your health insurance while you’re receiving treatment. You should opt for the highest possible cover your budget allows. The question we’re going to ask in this article is this: how much is too much?
There are now health insurance plans that cater to HNIs, providing them eight-figure sum insured. These covers may range from Rs 25 lakh to Rs 1.5 crore. Do you too need these covers?
Who Needs Big Covers?
High net worth individuals (HNIs) look for a comprehensive health cover, with five-star facilities and hassle-free treatment without limits. They are not deterred by premium costs. They also want to keep in mind healthcare inflation, which makes hospitalisation increasingly expensive.
Individuals who have a history of critical illnesses in the family—illnesses that require expensive and prolonged hospitalisations—may also opt for a big cover. In instances of diseases such as advanced cancer, private hospitalisation may easily cost tens of lakhs of rupees, and only a large-sized cover can protect the patient.
Lastly, if the patient wants to go abroad for advanced treatment, a low or mid-value health policy would certainly be inadequate. In all such situations, the best way forward is to have a high-value health insurance plan.
Organ transplants, overseas coverage, treatment for the terminally ill, any ailment that requires ventilator support, and all major diseases could be covered only in a high value insurance cover.
Exclusions & Inclusions
Exclusions may vary depending on the type of policy, the amount of cover, and on the insurance company’s terms and condition. Most high-value health insurance policies provide high levels of maternity benefits, wider range of day care treatment, organ transplants including donation cost, OPD costs, alternative treatments, overseas treatment, and overseas flight charges.
Exclusions typically are treatment in unrecognized hospitals, genetic disorders, HIV/AIDS, hospitalisation caused by adventure or hazardous sports, etc. It’s best to go through the policy document to understand the full list of exclusions.
There may also be waiting periods for certain ailments going up to two to four years since the policy commencement.
What Should You Do?
Getting a high-value insurance cover isn’t a possibility for the common man. The annual premium for such a policy of Rs 1 crore may cost around Rs 45,000 for an individual of 21 to 25 years of age, or Rs 2.37 lakh for individuals of 65 to 70 years of age. Such policies are available through private as well as public insurance companies.
When you pay such a high cost, you should have a policy with the least number of exclusions, which covers the maximum number of illnesses, and that has low waiting periods. The health cover should not have sub-limits, especially if it is a high value health cover. You should also avoid a policy that asks for co-payment for senior citizens.
But if you’re seeking a high-value cover without having to pay such heavy costs, here are your options.
If you are at the starting of your career at around the age of 25, you can take a standard health policy of Rs 5 to 10 lakh, since the chances of you being hospitalised are very low. As you grow older, you can increase the coverage amount gradually, keeping in mind your deteriorating health and increase in chances of bigger ailments.
Increasing the cover periodically would also help mitigate inflationary impact properly. Considering your personal health, you can increase your health cover at fixed intervals such as every five years. You can reduce your premium costs by buying top-up insurance plans.
(The writer is CEO, BankBazaar.com)