Health insurance is an important element of financial planning, as one big expenditure can set back your financial goals by a number of years.
Health problems usually come uninformed and their consequences can be physical, emotional and financial as well. It is, therefore, important for everyone to get a health insurance plan. Adopting a healthy lifestyle and getting health insurance for yourself and your family is of equal importance to protect yourself against the rising cost of medical care, particularly when there is a rise in the incidence of diseases at a younger age.
Health insurance is, therefore, an important element of financial planning, as one big expenditure can set back your financial goals by a number of years. To help you manage your health insurance policy in a better way, here are some tips on how to make the most of your health insurance policy.
Type of Cover
Instead of buying a separate health policy for each family member, you can go for a family floater plan that provides the best coverage as per your needs. If you intend to purchase a health insurance plan in your 30s, consider opting for a family floater plan. This will be much cheaper than buying individual plans for each family member. But keep in mind that if you are adding your parents who are older than 50 years, it would be much better to go for a separate health insurance plan for them. Including family members with a high risk of getting ill can eat into your whole family floater plan cover, leaving no cover for others to claim.
Increase the Sum Insured
The cost of good quality medical treatments is rising, and to beat this cost, you will need to have a sufficient amount of sum insured. A lower amount of sum insured can prove to be insufficient when the actual need arises. Therefore, it is important to evaluate your needs from time to time. You can also opt for a top-up policy to increase the sum insured of your policy, as premiums are very low for such plans.
Add New Members
Always inform your insurance provider immediately and get your child added to the policy instead of waiting for renewal. Usually, health insurance coverage for newborn babies will begin only after completion of 91 days. To add your child to a health insurance policy, you will need to pay a pro-rated premium, and the endorsement for the same will be issued by your insurer.
Room Rent Capping
Health insurance policies have a limit on the room rent expenses. This limit is called room rent capping. As per this limit, you are eligible to claim expenses for the room up to a certain limit. In cases where room rent exceeds the limit, you will have to pay the expenses, over and above the limit, from your own pocket.
To explain this feature of health insurance, here is a scenario. Let us assume that your health insurance policy has a room rent cap of Rs 5000 per day. In case you are hospitalized and the rent of the room is Rs 10,000 per day, you will need to pay Rs 5000 out of your own pocket even though your policy covers room rent.
You also need to keep in mind that once the room rent exceeds the limit, the cost of other expenses such as nursing also goes up.
It is always good to inform the insurer about any changes in your health history. To ensure that you maintain good faith, you should disclose everything related to your health or any pre-existing disease so that there are no complications or problems later on during the claim.
Mark the Renewal Date
Policyholders mostly pay the premium for their health insurance policy just in the nick of time or when a reminder is sent out by the insurance company. This approach should be avoided as you can lose all benefits of your existing health insurance policy if it comes for renewal beyond the grace period of one month. To ensure that you renew your health insurance on time, set a reminder of the due date and make timely payment of insurance premium. And as the premium could be a huge part of your monthly expenses, ensure that you have set some funds aside for the same before the renewal date.
Family Members Policy Details
There have been cases when the family has remained unaware of a family health insurance plan that the insured has bought. This has resulted in dependents not filing a cashless claim or delay registering a claim, only to end up bearing the expenses themselves. So, it is vital that you inform your spouse or family about any insurance plan you have purchased, and keep a copy of the policy documents in a safe but easily accessible place. Ensure that each member is aware of how to file a claim if the need arises.
Avail Tax Benefit
You might be paying the insurance premium regularly and on-time since buying health insurance. But you may not be aware of the tax benefits you could avail against the premium paid for a health insurance plan. You can make some serious saving on your tax by increasing your knowledge of exemptions available under the Income Tax Act. Section 80D pertains to tax deductions on the premium paid on health insurance.
Although it is important to have a health insurance policy, what is more important is to choose a policy that fits your need the best. Purchasing the right policy is an important but difficult task and, therefore, you need to review a number of policies before purchasing one. You can buy health insurance online also, which gives you a lot more choices. With a little research, you will be able to reap the maximum benefits out of your health insurance.
(By Subrata Mondal, Executive Vice President (Underwriting), IFFCO Tokio General Insurance Company Ltd)