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With an impulsive surge in medical costs clubbed with annual healthcare inflation in the range of 15-25%, hospitalization on account of any grave illness can cost you not less than Rs.3 lakh. In the absence of a proper health insurance cover, rest assured, you’ll be either digging into your hard earned savings or will be running into some serious debts.
Most first time buyers are puzzled as to opt for an individual health insurance for each family member or the family floater insurance plan. In this article, we will discover the nitty-gritties related to individual health insurance for families.
In simple terms, an individual health insurance policy means a separate policy for each of the family member with individual sum insured. To make things easier, let’s consider Gupta family from Mumbai. Mr. Gupta (50) has recently bought Apollo Munich individual health insurance for himself, his wife (30), daughter (20) and son (18) for a coverage of Rs.3 lakh each.
Although Mr. Gupta paid a whopping amount of approx. Rs.24500 towards the premium, there are few things he considered before investing in the plan. As Mr. Gupta has recently undergone gall bladder surgery, he wanted to ensure that his medical condition doesn’t unreasonably lead to waiting period for the rest of the family members. Also, he wanted to block a dedicated sum insured for each family member. These reasons encouraged him to decide on the individual health insurance for the family. While we are at it, let’s delve deeper into some pros and cons for opting the individual health insurance for the family members.
Pros:
Cons:
Cost towards premium is one of the major deciding factor while opting for any insurance policy. Below are few deciding factors on the premium calculation:
Administrative and Promotional Costs: Designing of policy, underwriting costs, marketing and advertising costs, brokers’ commission are some of the costs involved under this canopy and where do you think they are recovered from? Of course, through the premiums paid.
Savings from Investments: When you pay the premium towards the insurance policy, the insurance company put that money into various public investments. Health insurance premiums are calculated basis returns from these investments.
Medical Underwriting: This is where the risk evaluated and crucial decisions are taken to prevent the insurance company from making any losses.
Rate of Mortality: The rate of mortality varies for different age and income bands and is usually high for older customers. For example:
A. Premiums are more if sum assured is higher
B. Premiums are higher as one grows old
C. Premiums are inflated for those suffering from lifestyle illnesses like blood pressure or diabetes
Personal Medical History: Insurance companies may or may not require you to undergo a medical check-up before the insurance policy is issued. However, your medical history also decides policy premium you would be required to pay. Keep in mind, habitual smoking and drinking summons higher premiums.
Community Rating: The geographical location, lifestyle habits, overall development of the region along with the trade activities and political stability of the place are few other influential factors that decide the premium amount.
Band Rating: Under this segment, the insurance company settles on a base rate to be charged for a specific set of people with the similar attributes. These include aspects like group size, geographical location, gender, age, etc. For example: a young and healthy family will pay less premium as compared to a family comprising of senior citizens.
As a first time buyer, one of the key challenge is to decide between the individual plans for the family or opt for a family floater insurance policy. As both options carry their own pros and cons, it’s best to evaluate your individual needs, age bracket, family income, medical history to arrive at an informed decision. With the availability of online portals like Coverfox.com, you can compare different plans and combinations to choose the cream of the crop.
Also Read: Choosing Between Family Floater and Individual Health Insurance
NWhether you opt for individual policies for your family or insure them under family floater plan, as mentioned prior, it’s best to assess your requirements coupled with your financial health to take a perfect decision. While an individual plan could make sense for a young family, a family floater will be the right choice for someone with older kids. In addition to this, room rent sub limits, cashless hospitalization tie ups, pre-post hospitalization cover and other benefits on offer should also form crucial part of your deciding components.
