What are the challenges faced when it comes to purchasing health insurance for older parents? Learn the factors that you need to consider with the help of a story.
Things You Need to Know about Health Insurance
The thing about medical emergencies is that they can hit anyone, anytime regardless of age, gender or lifestyle. Since it can't be predicted, one can always be prepared for it. Health Insurance protects everyone in your family against financial loss from the unexpected.It's an agreement between you and your insurance company, where for an annual premium, the insurer pays for your hospitalization and other medical expenses as mentioned in your policy.
Basic Health Plan: This provides for the hospitalization expenses you might face in case of accidents, day-care procedures, surgical treatments or critical illnesses. However, the features, limits and sum assured will vary from insurer to insurer.
Super Top-up Health Plan: Similar to top-ups for mobile network services, this adds supplementary coverage to your existing health plan. The aim is to increase overall sum assured with its corresponding coverage by paying a relatively lower premium.
Why Should You Compare Health Plans Before Buying?
Selecting a suitable health plan to protect everyone in your family is not an easy task (Unless, you have been buying insurance only to save on tax so far). Thus, always compare plans on the basis of the following crucial factors:
Premium vs Coverage: Assess if the cover and sum assured are suitable against the premium paid. Choose add-ons as per your needs.
Network Hospitals: Be sure of the insurer's network hospitals in your area. You can avail of cashless services only at these hospitals.
Room Rent Limit: Since hospital room rents vary, some insurance plans pay only a part of the actual rent. It's always best to go for higher or no room-rent limit plans.
Exclusions: Check what is permanently excluded and which treatments are possibly covered after waiting for a certain period.
Should you Opt for Fixed Benefit Health Insurance Plans
With the change in lifestyle and environment and many other hereditary factors, there has been a drastic rise in people falling prey to critical illnesses. Though medical technology and science has improved tremendously, the cost of medical treatments too has reached sky high! So much so, that a middle class sole earner finds it difficult to save his hard-earned money during medical emergencies in absence of a health insurance policy. Unfortunately, opting for personal loans from banks and at times from friends and relatives has created much distress among many families.
What are fixed benefit health insurance plans?To encounter such financial hardships to treat critical illnesses, it is essential to introduce something called as ‘fixed benefit health insurance plans’. These plans take care of two major expenses such as hospital room charges as well as the entire cost of the surgery. But, remember these plans do not pay the expenses that include pathology, radiology and medical consultation.
How does it work benefits of health insurance plans?An amount equal to the sum insured is paid off by the insurance company to the insured in case he suffers from an illness which forms a part of the policy wordings. This amount however is fixed and guaranteed. Here, a lump sum amount is offered irrespective of the actual expenses to the policy holder in case of a claim. In short, fixed benefit health insurance plans don’t include ‘indemnity’. The pre-existing ailments are covered only after the waiting clause comes to an end.
The survival period clause mentions that it is necessary for the policyholder to survive for certain period post diagnosis of the critical illness to make a legitimate claim.
Standalone Heart/ Cancer Insurance Plans, Critical Illness Insurance Plans etc. are few products that form a part of the fixed benefit health insurance plan.
Let's illustrate the functioning of this plan with the help of an example:
Rahul had bought a Critical Illness Health Insurance Plan with a sum insured of Rs.20 lakh. During the term of the policy, he got diagnosed with kidney failure. Since this was a legitimate claim, the insurance company paid out the entire sum insured of Rs.20 lakh to Rahul, irrelevant of the actual hospitalization and medical treatment expenses being only Rs.8 lakh. Thereafter, the policy got terminated.
Is it essential to buy a fixed benefit health insurance plan?Yes, with the surge in critical illnesses and rising medical costs, it becomes essential to buy a ‘Fixed Benefit Health Insurance Plan’. Let’s have a look at the major factors that urge us to buy these plans:
Financial safety net The insured gets a peace of mind for having a financial back-up even though the emotional trauma is unavoidable. The fear of the life-long savings getting wiped-off due to diagnosis of a critical illness is thrown away.
Lump sum pay out The insurer pays the insured a fixed and guaranteed sum insured amount in lump sum irrelevant of the actual expenses incurred for getting the critical illness treated. It solely depends on the insured how to utilize the sum insured.
Zero sub-limits Unlike an indemnity health insurance plan, the fixed benefit health insurance plans don’t have any sub-limits on mandatory co-payment, room rent capping etc. So, the insured has the leverage to manage the funds as per his requirement.
Pocket-friendly plan Fixed benefit health insurance plans are pocket-friendly premium wise. You do not have to shell out a huge amount in terms of the annual premium. The competitive pricing makes these plans the most essential plans to buy that cover critical illnesses.
Easy renewals Well, you can renew the plans easily. Your plan gets activated once you renew providing you the most required financial security in the hour of need.
Tax benefits Section 80D of the Income Tax Act offers tax deduction for the premiums that you pay for the fixed benefit health insurance plan.
Who should buy health insurance plans?A person who wishes to enhance his existing health cover should definitely opt for the fixed benefit health insurance plan. Besides, a person fearing to face a loss of income due to exorbitant hospitalization expenses should certainly opt for this plan. At times, employers do not offer paid medical leave. This is when a fixed benefit health insurance plan comes as a saviour.
Anyone at any age can fall prey to any critical illness. Having a fixed benefit health insurance plan provides a sense of relief without disturbing your hard-earned savings. A lump sum amount received post making a claim without any sub-limits proves as the financial net for your medical expenses and the years to come!