Guide to planning health insurance

A family floater plan is easier to manage compared to multiple individual plans for members of a family. However, a floater plan may seem inadequate in case an entire family suffers an emergency such as an accident

April 11, 2013 2:08 IST | India Infoline News Service
Medical costs have been increasing day by day. From hospital expenses, to surgical costs, a medical emergency could bring about a sudden jolt not only emotionally but financially too. At such times of medical emergencies a health insurance plan is the best way to protect you and your family. It takes care of all medical expenses in case of an unforeseen illness / surgery, thereby reducing the financial burden.

Reasons to buy a health insurance plan
A health insurance policy should be an integral part of your portfolio. For the premium that you pay a health insurance plan:
  • Covers medical expenses.
  • Reduces mental and financial burden.
  • Various health insurance plans offer benefits such as regular health check-ups.
Tax benefits: Investments made towards payment of health insurance premiums, qualify for a tax deduction under Section 80D. For individuals less than 65 years of age, amount of health insurance premium paid or Rs. 15,000, whichever is lesser. For senior citizens above 65 years, amount of health insurance premium paid or Rs. 20,000, whichever is lesser.

Individual & family floater policy
Health insurance policies could be taken either an individual policy or as a family floater plan. An individual health plan is the simplest form of health insurance. It takes care of medical and hospitalisation expenses for an individual. The premium depends on the amount of sum assured taken. On the other hand, a family floater plan covers various members of a family under a single sum assured. So with one plan you could get a cover for yourself, spouse, children or dependent parents.

Premiums work out lesser in a floater plan. A family floater plan is easier to manage in comparison to multiple individual plans for members of a family. Floater plans come with a single policy document and a single renewal date to be remembered. However, a floater plan may seem inadequate in case an entire family suffers an emergency such as an accident. In such a case, having multiple individual policies for family members may prove advantageous to cover expenses.

Planning it right: For yourself and family
Health insurance could vary with age as health requirements are different. Here are a few guidelines across four different life cycles to help you save and choose the appropriate health insurance plan.

Stage 1: early earning years (25 to 30 years)
This is a stage in life fraught with enthusiasm and high levels of activity. No dependents, low risks of lifestyle diseases or pre-existing diseases and higher risk of accidents. At this stage it is best to opt for an individual health insurance plan along with an accidental cover. Buying health insurance at an early age has its own advantages. Premiums on your policy are much lower and you could accumulate bonuses in the form of no claim bonus.

Stage 2: Mid career (30 to 45 years)
At the peak of responsibilities, with spouse, children, or even aged parents as dependents, this is the stage of getting an extensive cover for your family. With work related stress, it is also the stage where life style diseases such as blood pressure, or diabetes could set in. You could opt for a family floater at this stage. New members could be added in the same plan without taking a fresh policy. Many insurers also offer maternity and new born baby cover in the floater plan. Check on plans that provide free health checkups. Cashless feature also comes handy in case of medical emergencies.

Stage 3: Late career (45 to 60 years)
This is the stage where you move towards the end of your working years, and are at the peak of meeting your life’s financial goals. With grown up children, you may just need a health plan for yourself and spouse. At this stage your health and stamina may not really be at its peak. Opt for individual health plans that stress on maintaining good health through add-benefits for regular checkups and blood tests. You could also opt for a critical illness plan as a supplement to your health insurance portfolio.

Stage 4: Retirement (60+)
This is the stage when your health insurance requirements are at its maximum. With a limited income, soaring medical bills could be quite a pinch. A fresh policy at this stage is not what is advisable as it would work out expensive. Health insurance for retirement must be planned much earlier in life. For retirement health insurance, opt for a plan with lifelong renewability. What you would require is an individual comprehensive policy with hospitalization benefits and add-ons for regular health checkups, both for you and your spouse.

Article contributed by MyInsuranceClub.com

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