Inflation is raging, but the costs of private healthcare are rising
even faster. One estimate says that health care costs in India are
increasing by 13-14 per cent every year. The only way to safeguard your
finances against a fat medical bill is to buy a health insurance policy.
There are several types of medical insurance policies, each designed to
fulfill a certain need. The choice depends on the buyer's age, family
size and structure and existing insurance cover. Choose one that best
suits your circumstances.
Young nuclear family
If you are living in a nuclear family, a floater plan that covers all
members is you best option. The premium per `1 lakh may be higher
compared to an individual policy but the premium per person works out to
be lower. It's a calculated risk based on the assumption that all the
members are not likely to require hospitalisation at once.
For
newly married couples who intend to start a family in a few years, it
makes sense to plan accordingly. Though most health insurance policies
do not cover maternity costs, some policies do. However, these costs are
covered only after a waiting period of 2-3 years. Buy a policy that
covers maternity costs immediately after marriage.
Already covered by employer
A lot of people have the misconception that if they are covered by a
group plan from their employer, they don't need to buy a separate
policy. While group covers are useful, they may not be sufficient. If
you lose your job or switch to another company, you may be rendered
uninsured.
Even if you buy a fresh cover immediately, keep in
mind that there is a mandatory 45-day cooling period during which
certain claims will not be paid. Besides, there is a 2-3 year waiting
period for pre-existing diseases. Group covers have no such exclusions.
Living with dependent parents
The family floater plan is not a good option if you want cover for an older relative as well.
The premium rates in these plans are determined by the age of the oldest member.
If you live with aged parents, buy individual plans for them separately
so that the premium for the rest of the family does not shoot up. When
buying a policy for your parents, study its features in great detail.
Most health insurance policies don't offer coverage beyond the age of 70 years, but some policies now offer lifelong cover.
Even so, the premium is prohibitively high and you could be paying Rs
24,000-30,000 a year for a cover of Rs 1.5 lakh. Some may find that
putting away the premium money in an emergency fund for medical expenses
is a better idea than buying health insurance at that age.
Home Insurance
Your house is your most valuable asset. Yet, very few people insure
their home though home insurance is very cheap in India. The vital
covers your house needs will cost you less than Rs 2,000 a year. Keep in
mind that you don't need to insure the house for the value of the
property but only for the cost of reconstructing it. The costs can vary
from Rs 1,500 per sq ft for a basic no-frills structure to Rs 2,500 per
sq ft for a premium construction. You also need to insure the contents
of the house against damage. The cost of ensuring contents worth Rs 10
lakh against natural and manmade calamities is just Rs 255.
Burglary and Breakage
The covers against burglary and breakage are costlier but important
nevertheless. You can further enhance the coverage by adding more
sections if you perceive a certain risk and if your pocket allows.
A standard fire and other perils policy covers damage due to fire,
lightning, storm, flood, landslide, earthquake, vehicle impact, rioting,
arson and bursting of pipes and tanks. It is possible to buy this as a
standalone cover, but most insurance companies encourage buyers to go
for a comprehensive plan that covers a wide range of risks.
Some
people think they don't need home insurance if they live in a rented
house. While this is true, they still need insurance against any damage
to the contents (by any natural or man-made disaster) and against
burglary. These basic covers don't cost too much.
Five things your agent won't tell you
These conditions are logical but are kept under wraps so that buyers don't have second thoughts.
1. Compulsory deductible
Your policy will not compensate you fully. The first 5 per cent of the
sum assured or Rs 10,000 of every claim is not paid by the company.
2. Limits on claims
The payment is subject to limits. Architect fee is limited to 3 per
cent of sum assured and debris clearance to 1 per cent. The payment made
to the architect or engineer for processing the claim papers cannot be
included in claim.
3. Jewellery cover
Under a
standard policy, only up to Rs 10,000 worth of jewellery is covered, and
cash not at all. To insure jewellery, you have to take a separate
all-risk policy, hich costs Rs 10 per Rs 1,000.
4. Conditions apply
Your claim against burglary will not be valid if the house remained
unoccupied for over 30 days at a stretch or if your household help was
involved in the theft.
5. Quake cover for building
The entire building has to be covered for earthquake risk. You cannot insure a certain section of the house in isolation.
