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February 16, 2023Health Insurance is insurance that covers the medical expenses of a person. It is an essential insurance cover in personal insurance along with life insurance. Since health is a non-negotiable essential requirement as high medical expenses in case of sickness or injury can economically ruin a person or a family. To mitigate this risk, health insurance can be a lifesaver. Also, read Why Life Insurance is Not An Investment Instrument.
Health insurance can be bought at any age but generally buying at an early age is better since it will be of a lower premium. There are many different kinds of health insurance with complex set clauses which makes buying a difficult problem for a layman. The three main types of health insurance are:
a) Corporate – Corporate health insurance is generally offered at the office where you work. Though it is for a low amount you will have to forego the same in case of a job loss.
b) Individual – An individual health insurance covers the health and medical expenses of an individual.
c) Family Floater – An insurance that covers an entire family under one plan is a Family Floater insurance.
There are also specified health insurance tires for critical illness, disease-specific like COVID health insurance, top-up, and super top-up, etc.
Things to Note before buying a Health Insurance
i) Remember to always buy a health insurance plan from a public health insurance company like Oriental, United, etc. rather than a private insurance company since private companies have commercial gains as their main objective. Their claim conversion ratio is also lower than public.
ii) Buy a suitably large family floater plan (50% of your annual income). This will lower premium costs when compared to an individual plan.
iii) For Rs.30 lakh annual income, buy Rs.15 lakh plan. Buy a super top-up policy of another Rs.50 lakh with Rs.5 lakh deductible. This will be used in extreme cases but can be a lifesaver. Super top-up has a much lower cost s Rs.5 lakh has to be paid by you or your normal insurance company.
iv) Prefer to buy both policies from the same insurance provider.
v) You can buy policies from websites or even visit their office or agents.
Health insurance is something a lot of people ignore to their detriment. Everyone will face medical expenses at one time or another other and health insurance can save you from financial ruin in case of ever-rising hospital costs.