Smart ideas to improve your insurance protection amid heightened uncertainties – The Indian Express

Insurance is one of the most essential tools in financial planning. In the present situation, the importance of insurance has increased manifold due to pandemic-related risks. Many have lost their loved ones during the pandemic while countless had to pay hefty hospitalisation bills. As such, you cannot afford to ignore both health and life insurance, especially when the third wave of the pandemic is imminent. Insurance may not ensure the safety of life or protection from illnesses; however, it certainly reduces the associated financial stress, provided you are adequately insured when you get exposed to the risks.
Let’s discuss a few ways to improve your insurance protection amid the current times of heightened uncertainties.
If you are young and married, you may prefer opting for a family floater health insurance policy. It will allow health cover for you and your dependent family members, including spouse and children (till they get married or 25 years of age, whichever earlier). Some family floater policies also cover parents along with other dependent members. During Covid, there are high chances of more than one or all family members getting infected at the same time. So, you should take adequate cover size (at least Rs 5-10 lakh if you stay in a metro) to ensure that the policy doesn’t fall short of medical expenses if there are multiple claims.
If you are a senior citizen or above mid-fifties, you may prefer opting for an individual health policy. People in the higher age category are prone to illnesses and may require multiple hospitalisations in a year. An individual health policy doesn’t disturb the health cover prospect of other family members when there is a claim requirement as there is no sharing of cover like family floaters.
People who enjoy health insurance benefits from their employers should also consider purchasing an independent health policy. A group policy benefit offered by the employer may feel sufficient till you work with them, but if you decide to move on, that group health policy will seize to provide you with a health cover. Later, if you purchase a new health cover, it will come with several limitations such as fresh waiting periods for pre-existing conditions.
Maintaining an independent health insurance cover can give you peace of mind that your health protection won’t go away even if you don’t continue with your present job. Also, sometimes there is capping on room rent and treatments of particular ailments in employer-provided group plans. If you have your independent health insurance policy, you can easily get treatment without any restrictions. Amid Covid, many people have lost their jobs and the absence of a separate health policy has broken them financially too. You can easily minimise the risks by securing your health insurance ambit.
Amid skyrocketing medical inflation, even an individual or family floater health plan could prove inadequate, especially if there are multiple claims in a policy year. Getting a super-top-up plan in addition to your individual or family floater policy could be one of the most cost-effective ways to enhance your insurance protection. A super top-up policy covers you for multiple eligible hospitalisation claims, just like your individual policies, above a pre-defined deductible limit. A super top-up plan could provide a substantially higher cover (up to Rs 1 crore, in some cases), but the deductible limit keeps its premiums relatively low. For example, if your health policy’s coverage is Rs 5 lakh, and you also buy a super top-up plan of Rs 15 lakh with Rs 5 lakh deductible, all eligible claims up to Rs 15 lakh can easily be taken care of without burning a hole in your pocket. In fact, for a 30-year-old non-smoking individual residing in Bengaluru, annual premiums for super top-up plans of Rs 15 lakh cover with Rs 5 lakh deductible could be anywhere between Rs 1,588 to Rs 6,500 depending on the insurer and the policy benefits.
Now, the advantage of a super top-up plan over a top-up plan is that the former covers multiple eligible claims in a policy year as opposed to the latter’s coverage on a single-case basis. You’ll also be well-advised to choose a super top-up plan whose deductible amount is equal to or lower than your base health plan’s coverage for complete peace of mind. Lastly, don’t just focus on the premiums while selecting any health insurance plan but also consider the insurer’s claim settlement track record, networked hospitals, policy benefits, waiting periods and exclusions. Remember, the premiums would increase for all insurance plans as the insured gets older, so prioritise purchasing the policies that meet your requirements at the earliest if you haven’t done so already.
Apart from assessing your health cover needs, you should also evaluate your life cover requirements amid the current heightened risks. If you’re the sole breadwinner in your family, take stock of your current life insurance policies and evaluate whether your existing cover would be able to meet your dependent family members’ present and future financial requirements and take care of your long-term debts in your absence. Changes in lifestyle, income and responsibilities, in addition to the increased threat to life due to the pandemic, are crucial factors to keep in mind while assessing your life insurance requirements. If you feel your existing life insurance cover is inadequate, you can consider purchasing a term life cover of required size which are usually available at lower premiums, especially if you start them at a younger age.
Insurance products are evolving with time and the changing requirements of customers. Insurance companies have, thus, come up with new-age products like life-long insurance coverage, international cover, health cover towards modern treatments like robotic surgery, and cover that allows auto-reload facility after a claim. You can consider them while strengthening your insurance protection in the current times.
The author is the CEO at Views expressed are that of the author.
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