The Telegraph
Monday , January 28 , 2013
Since 1st March, 1999
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The fitness formula

Greek playwright Aeschylus had said, “There is a limit to the best of health, disease is always a near neighbour.” And in today’s world, good health comes at a cost.

Spiralling healthcare costs and increasing cases of chronic diseases point out at the need to assess your health risks. Studies have shown how diagnostic revenues in lipid profile, blood glucose levels, thyroid and hormonal levels have grown 25 per cent per annum, another indicator of rapid growth in lifestyle diseases.

With more than 50 million diabetics and over 25 million heart patients, India is home to a huge incidence of lifestyle diseases. These diseases by definition last a lifetime and, therefore, pose a huge strain on the pocket. Thus, it makes sense to get a health cover early in life that will provide security throughout one’s lifetime.

It is essential to have a health cover to reduce the risk of financial difficulties in the event of a major illness or hospitalisation. However, it is also important to build a safety net that will exclusively cater to your out-of-pocket expenses.

This essentially means that one should have a budget for this regularly; an amount that you do not spend can be set aside to build a kitty or fund which can be utilised for medical expenses for your post-retirement years.

In India, less than 5 per cent of the population have health insurance cover and continue to fund 75 per cent of the total medical expense from their personal savings.

Long-term decision

While choosing a health cover, the basic rule is to opt for the one that gives you a long lasting cover, especially for post-retirement years. Many of these may not be covered by the health cover you have.

A few insurers, such as Max Bupa, provide health cover for life. These are the ones that one should typically opt for; while planning for the family, one should get a family floater plan which will be cost-efficient.

In family floater plans, there are no individual limits and any number of claims can be made during a year.

Keeping up with the increasing demand, health insurance companies have introduced several innovative plans catering to the needs of the consumers and the target buyer group. The consumers are literally spoilt for choice. However, buying a health insurance calls for greater awareness and cost-benefit balancing by consumers to choose the best product that will provide maximum cover at a reasonable cost.

Points to ponder

A buyer needs to keep the following things in mind while making an informed choice of a health insurance that provides adequate benefits at reasonable costs

● Choose a lifetime plan that provides cover for post-retirement age: One should buy a health insurance plan with a maximum renewable age or a lifetime insurance policy. The sole purpose of buying a health insurance is to protect oneself and the family from mounting healthcare costs throughout one’s life.

If a policy does not provide cover for the entire life or the maximum permissible age, it is not worth buying. Also, sickness and age-related debilities occur in old age, causing significant medical expenses.

● Adequate coverage for dependent family members: The sum insured should be decided according to the family size, past medical history and the area of residence. Past medical history will require higher medical expenses and, thus, a large insured amount.

A buyer needs to be careful as many companies do not pay for pre-existing diseases and the complications arising from them. These days, however, some companies allow for pre-existing diseases after a specific waiting period and if the policy renewals are continuous. A buyer should be aware of the renewal date or period to avoid lapse of the policy

● Daycare procedures: Ask yourself if your health cover provides a comprehensive list for cover under day care procedures.

● Maximum benefit: A health insurance involves a cost in terms of premium that depends on whether the policy is for an individual or a family, the number of family members and their age group.

A buyer must check for all the limitations in an insurance cover and choose the one that provides maximum benefit within an affordable cost.

● Focused on women: Women insurers need to ensure whether maternity benefits are covered under a given health insurance or not. Otherwise, it will be advisable that they opt for a top-up plan or specific coverage facility to avoid disappointment at a later stage.

The author is chief financial officer of Max Bupa