Health Insurance is a must for all. It is something inevitable if you want to secure your life. Planning for your life definitely depends on your financial goals to a greater extent. How well you plan out your financial structure makes a lot of difference. Investments are an integral part of it and they have a huge impact on your future spending. Similarly, insurance too is a vital factor to save your money now and in future as it takes care of many uncertainties. If you do not cover your life or fail to cover it properly, it will have a direct effect on your savings and investments. Insurance can save you from a lot of chaos in case any life threatening event takes place. So, to consider it as an unnecessary or lesser important tool will jeopardise your own interest. Not to provide for insurance in your financial portfolio can go against you and could have an ever lasting impact.
The era in which we live, we have already witnessed the challenges caused by the pandemic. Moreover, the polluted environment in which we live, unhealthy lifestyle, stressed and lengthy working hours, lack of time to pay attention towards nutrition and exercise etc also lead to health issues starting at a young age. It becomes all the more important to get insurance as the probabilities of facing minor to major ailments become higher. Medical costs are skyrocketing and it calls for providing for a solid plan to safeguard your health. Emergencies related to your health could cause serious trouble and there is a need to provide for term insurance in that case.
It is better that you understand the significance of medical insurance putting behind all the preconceived notions about the same. Once you go through the step by step procedure to procure it, you will come to know that it is a very simple financial product. If you work towards knowing it better, you will arrive at a better decision. Some help from an unbiased professional together with your own research work will surely make you confident in this area.
In this article we will try to understand many other aspects related to Insurance that further emphasise its importance. The common misconceptions about health insurance are given in the following paragraphs. The underlying facts are also explained in detail so that it eradicates all the doubts and makes you better understand the reality behind it.
- If my employer is contributing towards health insurance, I need not worry about it- All major and known organisations cover their employees and close family members under the corporate health insurance plan. Such plans provide a cover upto a certain amount and any expenditure crossing that limit will be out of your pocket. It also does not give you complete coverage. It is better that you get a comprehensive plan for your family that suits each one of them. Elderly members like parents need a plan that is sufficient to take care of all the medical costs looking at the contingencies of them falling sick more. Once you change the organisation, such benefits may cease to exist and you have to think about starting afresh by buying insurance for yourself. It is possible that you attain a certain age while doing so. The risk associated with your life might change and the premium as well as the coverage will get affected due to that reason. Later years of life are unpredictable and deterioration in your health condition will prove to be costlier. Buy an additional cover even if you have one under corporate plan. For the safety and wellbeing of your family members you should always buy full proof insurance. Also you will not be covered under the corporate plans even if offered by all your employers for a while during the transition period when you switch jobs.
Corporate health insurance plans usually provide an insurance cover ranging from Rs.2-5 lakhs. Suppose an individual is earning Rs.75,000 per month, a corporate plan is not sufficient for him/her. And it is better to buy health insurance that will cover the deficiency to make it upto the required amount of insurance.
- As a young and healthy man or woman I do not need it now: Earning, saving and investing are the best when you start early. So is the case with insurance. The people who get jobs at an early age can better plan their financial matters. They can even modify them as per their own experience. It will only make those getting better. When you are young, buy insurance. If you do so, insurance premiums can be cheaper as getting hospitalised is a far possibility in your case. To make any insurance policy effective, a minimum period of 2-4 years is needed. So getting it early means you will be able to reduce the waiting period. Almost all the terms will be in your favour when you buy it while you are young and fit.
Outbreaks like Covid-19 spare no one. The cost of treating it could go as high as 10-15 lakhs. If you do not have health insurance, you might face a financial crunch as lakhs of rupees will be spent after the treatment. Life is uncertain and anything right from a serious disease to an accident may have a huge impact on your earning capacity. What if your regular income gets interrupted while you are struggling with some kind of an ailment? Sparing a large amount of money towards your treatment along with the day to day expenses will put more burden on you. If you are the only earning member, such a challenge will be quite troublesome. Any young or healthy individual might face difficulties during such times.
- Getting hospitalised for a day is a must to claim health insurance: Due to medical advancements, many surgeries and procedures do not require more than a few hours for a patient to get hospitalised. There has been a myth that one must stay in a hospital for a 24 hours time in order to claim medical insurance. Because of the advancements, no such condition prevails. There are a number of such claims which you can make despite your stay in the hospital being less than a day. Similarly a few other treatments are covered in the gamut of insurance like chemotherapy, dialysis, eye surgery, tonsil surgery, radiotherapy and even a few outpatient procedures. Dental treatments are also covered subject to certain limits. Daycare facilities are covered for up to 20 to 50 days days by health insurance companies.
- Saying no to online insurance: Today’s world is inspired by a lot of technological upgrades in almost all spheres of life. It is almost impossible to run banking, transport, travel, education and many other fields without using technology. All digital transactions are safe and both the government and private agencies are using them. Insurance is not an exception. Digitisation has streamlined the process of online buying of health insurance. It will be cheaper if you buy it online. It excludes all the intermediaries and hence the insurer will be able to offer you some discount which the offline customers do not usually get. You will be able to compare many policies online including their features and premiums as well. You can choose the one that fulfils your requirements. Also, there is no need to worry about the confidentiality and privacy related with the transaction. There are secured payment gateways ensuring all round safety. The processing time etc gets shorter as the verification of information or resolution of queries can be done in real time.
- Ending up choosing cheaper options: Paying premium becomes a matter of consideration for many without looking at other aspects involved. A cheap policy might come up with cheaper premiums but it is required to compare various policies. Study the features, co-payments, waiting periods and other terms before you end up choosing a policy based on its lower premium. Instead go for the best policy at a reasonable price. Policy coverage must be wide enough to give you maximum benefits. If you select a cheap policy it may fail to give you extensive benefits and rather proves to be unfruitful when you look at its restricted features. Do not hurry to buy any policy that looks cheaper but is costlier in other terms.
- Buying Health Insurance plan for tax savings: There are a few known sections of the Income Tax Act that people are aware of. Simply to get some relief from tax they buy an insurance cover. This kind of short sighted approach does not serve the purpose. The aim behind buying insurance is to provide for the safety of your all round health/medical costs. Each individual should plan to get health insurance as per his/her own requirements. It is an inevitable part of a portfolio and buying it merely for the sake of some deduction restricts you from getting the maximum benefits of it. It is possible that the premium that you pay exceeds the exemption limits allowed under the I-T Act, so what? Still you can claim deduction up to the maximum available limits allowed therein along with the health benefits offered by the comprehensive health plan just by spending a little more. The ultimate goal is to save you from spending thousands or lakhs in the time of a health crisis. What you save by way of tax is just nothing as compared to what you get.
- Other common misconceptions : Over and above the myths that we have already discussed, the following are also some of the common myths,
- It does not cover pregnancy-Maternity is no more an exclusion. You can opt for it separately or include it otherwise in your health insurance plan. It not only covers the child birth but other medical costs during pregnancy and post childbirth expenditure.
- We cannot change the terms-You can always upgrade your plan. Keep yourself updated about the changes in the terms and conditions that usually take place in a five years’ period. Premiums, benefits, terms and conditions as well as the procedure to get an insurance change over a period of time.
- Cashless cover is a must-There is no such thing. Even if you do not get a cashless cover, that in no way diminishes the importance of your policy. Usually all the policies these days have tie ups with hospitals and cashless facilities are available. Just be doubly sure if you are looking out for a cashless program before you buy a policy. If the cashless program is a necessity for you, check the list of network hospitals while getting the policy. Network hospitals also keep on changing every year. So a hospital which you have preferred might not be on the list next year even if you have taken a policy based on its inclusion in the current year. So is the case with the various treatments and procedures. The list of day care facilities also keeps on changing.
- It is useful only for the earning member of the family-Health insurance is a must for all the close family members together with the earning member. That’s why we have stressed on getting a policy over and above the corporate plan in this article. The safety and well being of all the family members are important and hence it should not be restricted to the earning member only. Because in absence of a health cover for other family members, again the cost of medical treatment will be an out of pocket expense and it could run into thousands and lakhs of rupees.
- Room rent should not be the main concern: Many policies put a cap on the room rent depending upon the premium amount and the sum insured. The kind of health insurance policy that you buy will be the deciding factor. Anything above the capped limit will be rejected. But again, room rent is not the sole factor in health insurance plans. There are many other benefits and you should not postpone or dismiss the idea of getting one due to the cap on room rent.
- Health insurance policy is a risky financial tool: People think that health insurance is risky. Try searching about health insurance online. When you read about/buy a policy online, you will find it very streamlined and transparent. There is no risk attached. You are not going to lose anything. The documentation and other procedures are quite customer friendly whether you choose an offline or online mode of buying.
- It does not work when one has pre existing diseases-There is a common misunderstanding that when a person has an existing disease, it will not be covered by any policy. Majority of health plans contain a pre-existing disease clause and even if you have any such health condition, it will be covered by it. The insurer might need to undergo a few medical tests as a part of their formality. This way they can be aware of the severity of your disease and can accordingly adjust their terms and conditions. Similarly, there is a duty on the part of the policyholder to give the fullest details or facts regarding his current health condition so that the insurer can access it and it will be for the good of both the parties.
- Insurance companies cover all the expenses: Health insurance plans have exclusions or co-payment clauses. Certain procedures or ailments which are not covered by health insurance are what we call exclusions. Policyholder has to pay for them. For the co-payment clause, only a part of the hospital bill will be covered by the insurer and the rest is paid by the policyholder. You should know about the sub limit on room rent. It is usually believed that the health insurance companies pay all the expenses. So you need to know what is excluded to avoid the last moment disputes at the time of claim settlement.
- Smokers are not eligible for health insurance: It is a myth that smokers and alcoholic individuals cannot get health insurance. Just because they are at high risk does not mean they are not eligible for health insurance coverage. Though they may have to pay a higher premium, and also undergo stricter health tests before they get health insurance.
- It can cover immediate medical expenses like a surgery: A claim can be made within 60-90 days only if the health plan provides for it. Otherwise for it to get effective there is a waiting period. You cannot get insurance just when you are about to undergo some surgical procedure. Only accidental hospitalisation gets coverage from the beginning. Get a clear picture regarding the claims before you place it. Same is the case with pre existing conditions. A few ailments are expressly outside the coverage of common policies. Study the clauses thoroughly while getting an insurance.
- The agents help you get the best policy: The agents are not always the right persons to suggest you the best insurance policies. If you hire professionally qualified individuals they do better work. They are unbiased and have extensive knowledge about all the products. An agent may not be engaged with the same insurer at the time you have to make a claim. You should pay attention to your own goals for getting a health cover. It is always good to gather some knowledge by yourself and hire an informed advisor.
Choosing a proper health insurance plan is not at all an easy job. Many people fail to understand it because of its several terms and conditions. But those who are able to understand it, they can further analyse them and compare them to choose the best among them. These days everything is available on the internet and the information is becoming more and more transparent and understandable due to many players in the field. Health insurance companies want their customers to know about the highlights of their own scheme and hence it is important for them to make the customers understand all the tactics of health insurance easily digestible.
A policy which is purchased early in life and is renewed from time to time, results in better claim experiences in case of need. Basic policies include the common causes affecting one’s health whereas the updated and latest policies offer numerous additional and special benefits. Hence, it is always good to keep your knowledge about them up to date. A professional might help you in this regard. Remember, getting health insurance is very very important and so is to renew it on time in order to continue the benefits arising from it. TPAs may ask for policy copies of the past three to four years. The new TPA needs to know about the continuity of a health plan during a claim. So retain policies of at least three years along with the current one. Keep all the policy documents at a safe place and even after expiry do not destroy them. Let your family know about the health insurance and also let them know where to find the documents if need arises.
Images from https://unsplash.com/@nci
Bhoi Smrutirekha Dharanidhar