Published in Mint on April 17 2017, Written by Abhishek Bondia
Why should I consider buying a high sum assured on my family health insurance plan? Would I practically need a sum assured of more than Rs5 lakh? Most hospitalizations and medical procedures cost much less. For example, a cataract operation does not cost even Rs50,000.
—Ramdhari Negi
A large number of routine hospitalization incidents cost significantly less than Rs5 lakh. However, you should still consider a high sum assured on family health insurance for four reasons.
First, insurance is not only taken for routine hospitalization but also for complicated surgeries and life-threatening illnesses. In several situations, such as brain haemorrhage or cancer, the cost of treatment can be more than Rs20 lakh.
Second, cost of treatment is rising at a faster pace than general inflation. A sum assured that is sufficient today, will not be sufficient 10 years from now. With age, insurers also become reluctant to offer high covers, especially if the prospect has acquired a chronic illness such as hypertension.
Third, cost of treatment varies substantially by facilities. Hospital expenses for a pregnancy may cost Rs30,000 in a nursing home and Rs2.5 lakh in a tertiary hospital. High sum assured gives you the flexibility to choose from a wider range of hospitals.
Fourth, premium increase for higher sum assured is not proportionate. Sum assured increase from Rs25 lakh to Rs50 lakh will not cost double the premium.
So, in many situations buying a high cover delivers excellent value for money.
I am 25 years old and have been working as a freelancer for 3 years. The work pays well and I may not get into a regular corporate job for some time in the future. I want to purchase a health insurance for myself. What kind of plan should I take?
—Nitin Jagdev
Since you are a freelancer, without support from an employer-sponsored health insurance, your primary insurance cover will be a personal health insurance. So, you should buy a comprehensive health insurance policy and supplement it with a critical illness insurance.
The health insurance policy will pay for expenses incurred during hospitalization. Do note that the hospitalisation must be over 24 hours. If you receive a day care procedure, then your insurance will only cover it if it is a listed day care procedure.
You should consider three aspects before buying a health insurance policy.
First, take a sum assured that is at least equal to your annual income.
Second, consider a plan with a high no-claim bonus. This will allow an increase in the sum assured for later years.
Third, consider a well-rated plan as per the Mint SecureNow Mediclaim Rating. You may refer to individual plans suggested for a 35 year old.
Critical illness insurance pays a lump sum if you are diagnosed with any of the listed illnesses. Generally, critical illnesses like cancer entail a large expense outgo, which may be over the limits of a standard mediclaim policy. So, a critical illness plan will help cover for these expenses and also for certain drugs that may be excluded from the mediclaim policy.
I am planning to go on a 3 month trekking vacation in Nepal this year and I want to take travel insurance. What are the insurance options are available to me?
—Rahul Oberoi
You can take a travel insurance policy for this specific trip. Almost all the leading insurers offer this policy. You can consider a policy from one of the top 10 insurers. If you plan to engage in adventure sports, then do make sure you declare this while buying the policy because these activities are often excluded from insurance covers.
I am planning a destination wedding for my daughter in Seychelles and 60-70 people (all close relatives) would fly out of Mumbai in a chartered plan. What kind of insurance should I take?
—Ravi Syal
You should consider buying a travel insurance for the extended family, as well as wedding insurance.
Declare the fact that you will travel by a chartered aircraft because travel insurance typically covers regular commercial flights only.
The travel insurance will cover for loss of personal belongings, and accident-related deaths and disabilities during the travel.
Wedding insurance is useful because it will help cover a few of the unforeseen exigencies.
First, any damage to property, such as wedding jewellery, due to incidents such as fire and theft, at the wedding venue.
Second, it will cover expenses if the wedding is cancelled due to a catastrophe or state emergencies.
Third, it will cover any third-party injury or property damage at the wedding venue.
