Don’t postpone buying a health insurance cover anymore

V Jagannathan

When was the last time you planned to fall sick? Or perhaps do you remember that late evening when you decided to undergo a cardiac arrest? You don’t recall any such event because you never really plan to fall ill. You never really decide when it is that time when your health will deteriorate. These events are beyond your reach, control and planning.

However, what you can plan is financially sound risk coverage against expenditure caused by any unforeseen medical emergencies. This article covers some basic guidelines and terms to emphasise the increasing importance of a robust health insurance cover.

If you are a young employee, chances are that you would be covered by the organisation you work for. The problem is that most organisations provide a basic health insurance cover. This basic health insurance might cover individuals from minor ailments and provide a decent amount of coverage.

Employer’s health cover may not be sufficient

However, on the flip side, there are some issues which are scarcely given attention to. The first among them is that the employer-taken health cover might often be insufficient in case of a major emergency.

Job switch may make you vulnerable

Secondly, every switch of employer that you do may make you vulnerable at least during the duration between leaving and joining elsewhere. What will happen if a disease decides to strike you just then? Or, an accident occurs within the intervening period? Thirdly, you might think of a sabbatical for upgrading your skills on your own. How will you meet the challenge of totally being vulnerable with no-cover against diseases or accidents? Hence, it becomes imperative for you to purchase an adequate health insurance cover which suits your individual requirements rather than settling for something which might be insufficient in the long term.

Buy health insurance early in life

Some youngsters tend to postpone the decision of buying a health insurance policy to the middle of their life spans, leaving it to when they are in their forties or fifties. By that time, health risks have also peaked, and you are no more a desirable health risk, seen from the health insurer’s perspective. It is advisable to buy a health insurance policy early in life so that you are through with all waiting periods and time exclusions. Most insurance companies have an upper age limit for the policies to get in. As an individual grows older, the cost of the cover increases and if you happen to face health issues, matters become worse. Hence, starting early is advisable so that you are able to avail full benefits of your health insurance plan.

Tax benefits

Besides, any payment towards health insurance premium offers a tax advantage under Section 80D of the Income Tax Act. The deduction under Section 80D is allowed from your gross total income.

Categories of health plans

The health insurance plans fall into two categories different in respect of when they become payable — indemnity-based and benefits- based. The former gives back what you have actually spent for treating a medical disorder or disease whilst admitted to the hospital. The latter pays benefits as defined and agreed in the policy, irrespective of the fact whether you have actually spent the money on treating it or not. For instance, if a policy taken by you assures that it will pay once you have been diagnosed with cancer for the first time, the policy will make the payment in case you have had the misfortune of befalling a cancer victim. Whether you have spent the money on the treatment or not, or whether you are going to spend is not looked into while admitting a claim. In indemnity-based policy, the claim is limited to what you actually spend on treatment and whether you have handed over the relevant receipts to the insurer or not.

Primary layer of protection

You must surely have an indemnity-based health insurance as your primary layer of protection. To augment your protection, you can have benefits-based policies which will help you tide over extraordinary situations such as falling a victim to cancer, stroke, paralysis, serious disabilities etc.

Research well

Understanding which policy suits you the best requires adequate amount of research on your part. All in all, with an appropriate health insurance cover in place, you can be rest assured that even if life gives you a rough patch with you or your loved one meeting with an unfortunate incident, at least the financial burden of the situation wouldn’t weigh you down.

All it amounts to is: “Do stay insured, do stay protected”.

The author is CMD, Star Health and Allied Insurance Company Ltd. The views expressed in this article are his own