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Why Mediclaim

Why Should you Buy Health Insurance as early as possible?

Mediclaim is one of the most important insurance investments that an individual should make in life.
If you haven’t or think otherwise, this post will tell you why you must have a mediclaim policy.

You MUST understand that, while mediclaim won’t give you any monetary returns, it will prove to be your biggest investment when the need arises, that is in times of medical emergencies. They will cover for your hospitalization expenses, surgery if required, etc. If you can spare about Rs. 8,000 to 9,500 in a year you can get a mediclaim policy in India up to about Rs. 3-4 Lac. Is this asking too much of your yearly income? Rs. 8,000 a year is about 666 a month or Rs. 22 a day. Rs. 22 a day is not asking too much.
Some mediclaim policies can also cover you for specific critical illnesses like, diabetes, kidney failure, heart diseases, cancer etc, which will reimburse you even for diagnosis of the disease and also have a medical cover for hospitalization expenses. However this comes at an extra premium and you must take them if you can afford them.

Skyrocketing Health Costs

Medical costs, which are ever-rising, can burn a huge hole in your pocket. This indicative list of the cost of common medical procedures says it all:
Surgery                             Approximate Cost (in Rs.)
Heart Bypass                         3,00,000
Hysterectomy                         1,50,000
Cataract                                   30,000
Heart Valve Replacement         3,30,000

Why is it critical to get private health insurance?

Just because your employer has given you some health insurance coverage, it does not mean that you and your family are adequately covered. In the unfortunate event of hospitalization, don't be surprised that your work health insurance policy covers very little, or anything at all. Here is why you must have an independent health insurance policy for yourself and your loved ones.

Why taking a personal health insurance plan?

  1. Build your medical history: A health insurance policy has certain exclusions that do not allow the insured to claim certain benefits for the first few years of health coverage. Therefore, having a policy from an early age means that this time period can be covered much sooner in one's life when one is less vulnerable to medical problems. After this period of exclusions is over, the health policy is of great value because it will cover a much wider range of diseases and treatments.
  2. Avoid exclusions and delays: If the new employer does not have a health insurance plan and you decide to opt for one at that point in time, you might have to wait for a few years to avail of all the benefits.
  3. Avoid difficulty of getting insurance in old age: The older you get, the higher the statistical chance that might suffer from medical issues. As a result, no insurance company will consider the insurance application of older people favourably. There is a lesser chance of you being covered. Many medical policies are not allowed once you have conditions like diabetes, hypertension etc. Or, if you do get covered, the annual premium might be more expensive. Insurance companies do not look at pre-existing diseases favourably, but if you have had a private policy with this insurer, then you have a history with them.
  4. Security and peace of mind: An employee and his or her family will remain covered irrespective of the employee's job status. This gives one peace of mind, especially when the job situation might be in transition.

 

Scenarios where employer health insurance might be inadequate

Change in Employment Status

  1. Termination of employment: In today's economic environment, job layoffs with just one day's notice are a reality. In such a scenario, the employee and his or her family will be immediately left without health coverage. What if a medical emergency requiring hospitalization occurs before this person was to find a new job?
  2. Break in employment: If someone were to voluntarily leave a job, again, like above situation, there will be a gap and the family will then be exposed to the risk of paying the entire costs of a medical emergency from their own pocket.
  3. No employee health benefits at new employer: What if your new employer does not offer any group health benefits to its employees. The employee might have taken the availability of an employer health plan for granted, only to be surprised that this is not the case when the medical emergency arises.

Inadequate Coverage

  1. Inadequate coverage for family: Employer plans may or may not cover your entire family, i.e., spouse, kids and your parents. This might be most troublesome because often the employer health plan might not cover your aging parents, for whom health coverage is most important.
  2. Quantum of coverage: Your employer plan might be barebones, and might just cover just the minimal basics, but nothing that might be relevant to you, given you and your family's medical history. Corporate plans, by definition, are a one size fits all type of plan. Even if it does cover the say a family of four members, the rupee amount of coverage might be very low.
  3. Top up on your employer plan: Some private plans might allow you to purchase a top up plan that kicks in over and above the coverage that your employer provides. However, if you change employment, you will still be liable for the coverage up to that threshold amount before your private plan starts your coverage. For e.g., your employer plan covers up to Rs 2 lakhs of hospitalization expenses, and you buy a top up of an additional Rs 1 lakh, which kicks in only after the first Rs 2 lakhs has been consumed. If you leave your job, your private plan will still only cover you after you have paid the initial Rs 2 lakhs.

There are many reasons pundits advise people to opt for a health insurance policy at a young age. There are manifold advantages to it as listed below:

Waiting period: Most health insurance policies have a waiting period ranging from 1 to 3 months, during which you cannot make any claims even if you have a medical emergency. Buying a health insurance policy at a early young age is, therefore, a big advantage in this context, as you would exhaust the waiting period without any major requirements. There is a waiting period of 18 to 24 months for many ailments such as cataract, urinary tract stones, knee replacements, arthritis etc., so in younger age these waiting periods hardly affects you.

Low premium: In most cases, the premium amount charged by an insurance provider depends on your age. If you opt for a policy at a young age, you can avail of a lower premium.

Duration: It is important to note that most health insurance policies on offer come with a ceiling on upper age. If you buy a health insurance policy at a young age, you will not have to worry about age limits and thereby enjoying the benefit of health insurance for a longer duration.

Tax benefit: Buying a health insurance policy at a young age will allow you to enjoy tax benefits for a longer period in that you can claim the premium you pay as deduction from your total income under 80D of the Income Tax Act, 1961.

Coverage: Taking a health insurance policy at a young age ensures that you have greater coverage. Many latest health plans offer wide coverage from day care procedures and vector borne diseases to maternity benefits and OPD expenses among others.

Pre-existing conditions: Buying a health insurance policy in your late 40s will only increase your financial burden with reduced benefits. Many health insurance providers exclude many pre-existing conditions from getting covered which defeats the purpose of opting for a health insurance policy.

Bonus: Most insurance companies offer a ‘no claims bonus’ in the absence of any claims in the preceding year of a policy term. If you buy a health insurance policy at a young age, you can avail of cumulative bonus as you will most likely renew your policy every year. As a result, the bonus accumulated increases your coverage amount which will prove to be an advantage at later stages of life when you are old and grey. No claims bonus may range from 5% to 100% of sum insured in most cases.

Lifelong renewal: You can opt for lifetime renewal of your health insurance plan and thereby, avail of extended coverage. Consequently, you can enjoy healthcare benefits for your entire life by opting for renewal of your policy.

Lower rejection rate: When you are young, you have many productive years ahead of you and less health complications. As a result, chances of your health insurance policy getting rejected are miniscule.

Personal health insurance: In this day and age of an exponential increase in medical expenses, the importance of a health insurance policy cannot be overemphasised. The coverage provided by your employer may not suffice to cover your costs. Furthermore, you will run the risk of being uninsured at the time of any job change or loss of employment.

Why Mediclaim