Tips & Article

Health Insurance

Ensure an adequate heath cover for you and your family

Need for an adequate health cover

With the rising pollution, change in lifestyle, change in eating trends etc., diseases have attacked mankind today like never before. In the event of an unforeseen illness, you may have no option but to utilize your hard-earned savings. A right health insurance is a savior in such situation and is must in today's time.

Today almost all employers offer a group health policy to their employees. But these health covers are generally customized covers and may have many restrictions. Some of the common restrictions relate to limited sum insured, family definitions (cover restricted to limited number of family members), co-payment clauses, Compulsory deductibles, Room rent and ICU limits & Cover is limited to the employment period and ceases on termination of employment. Hence it is advisable that one should think of buying an adequate health cover for himself & his family.

Various ways with which you can ensure an adequate health cover

There are various health insurance products in the market to choose from - an individual policy, a family floater, a policy for elderly parents, a cover that gives lump-sum benefit on a diagnosis of critical illness, or a hospital cash cover.

A health insurance taken as top up cover over and above the sum insured under the employer’s policy will help in case the cost of treatment exceeds the amount provided under the employer provided cover. Also in case the employer provided covers excludes certain family members such as parents then the additional cover should be taken to ensure that all dependent family members are adequately covered.

Sometime there are co-payment clauses or sub limits on certain expenses such as room rent, ICU bills etc. In such cases Hospital Cash cover proves to be very useful.

Most importantly the employer provided covers are valid only for the period of employment and ceases on termination of employment. Generally the next employment starts only after a gap. This gap could be short or long depending on the employment environment and also how the entire move is timed. Technically today the health insurance is portable and an individual can port the benefits of the employer’s policy to a policy taken on individual basis on termination of employment. Therefore, there may not be any need to keep a concurrent cover in force all the time. However, in case of careers in high turnover industries it is advisable to keep a concurrent cover just to ensure there is no gap in between two employments.

It is observed that the employers typically buy indemnity based products. This means that the policy pays only for the expenses incurred. But the health contingency is not limited to meeting the hospitalization expenses alone. They can also lead to temporary or total loss of employment and loss of leaves. In addition there are a lot of hospitalization associated expenses which are not covered by standard health policies.

To cover the additional expenses, it makes sense to take additional Hospital Cash policy. These policies provide defined daily cash benefits based on the number of days of hospitalization. This can also provide the cash benefit in lieu of the leaves taken on account of hospitalization.

However, the loss of employment can be a matter of serious concern and should be handled appropriately. In case the ailment impacts employability, the traditional health cover may not provide any benefit to make up for the loss of employment.

Critical Illness policies are specifically designed to take care of such contingencies. These policies are benefit policies and the sum assured is paid as lump-sum benefit. Once the claim is paid, the policy ceases to exist. A critical illness cover can be taken as a stand-alone policy or as a rider with a hospitalization policy. There are various sum insured options available and one can therefore decide the most suitable option based on one’s evaluation of risk. However, it may be prudent to take adequate sum insured under critical illness policies.

Lastly a wise advise, when a purchasing a health insurance; keep a close eye on details such as coverage, exclusions, waiting period for pre-existing disease, sub-limits on various expense heads. This will help to secure your future against critical times.

Have a healthy life!