Skip to main content

Risk strategies for Health coverage

RISK coverage, in the form of insurance, life and health, forms the base of any financial plan. If risk strategies are not in place, any well- thought of and well implemented plan can go awry. Most employers in the organised sector provide some sort of health benefits to their employees. There is a slow increase in awareness about having a personal health insurance. In order to cover the gaps in case of change of job or redundancy.

IS HEALTH INSURANCE ENOUGH?

Normally health cover limit from single insurer is of `5lakh. Lately some companies have increased this limit to `10 lakh per person.

But it is still discretionary and depends on the profile of the applicant. Some new entrants in the industry even provide a cover of `50 lakh. These are meant for high networth individuals as the premiums are very high and a limited number of high-end hospitals are on the panel for treatment.

Alternatively, you can take a family floater upto `10 lakh for your family. For individual covers, you can increase your cover by taking multiple policies from various insurers. The problem with this approach is that in case of a claim, each insurer will pay you proportionately. This will increase the paper-work as all bills will have to be submitted to all the insurers. Also, depending on the terms and conditions of each insurer, the premiums due for each policy can go up at the time of renewal due to the claims.

So what does a healthy young person do? He might not have a claim for several years to come. But with the kind of lifestyles today the risk of diseases like diabetes, hypertension and so on has increased tremendously. If he already suffers from any ailments, he may face a pre-existing disease exclusion period, on purchase of new policy. The exclusion period means that pre-existing diseases or conditions arising due to them are covered only after a fixed tenure as mentioned in the policy. Any claims arising due to the pre-existing diseases during exclusion period are not accepted. Even the premiums will get loaded for these pre-existing diseases. In some cases, a co-payment clause might be added, meaning that in case of a claim the insurer will pay only certain percentage of the claim, say 75 per cent. The rest has to be borne by the client.

If he takes a cover of `2- 3 lakh, it might not suffice in case of a major surgery or ailment. If he takes the entire `10 lakh limit available to him, he might be paying high premiums for several years, even when the risk is low. A `2- 5 lakh cover might be sufficient today, but in years time, due to inflation, that amount will be grossly inadequate to provide any meaningful respite from hospital expenses if need arises. By that time if he decides to get additional cover, the costs will be high and some conditions may be marked as pre-existing. Thus, both risk and cost increases with age.

In case of senior citizens, due to the age factor, there might be several heath issues, thus risks of claims arising are high. It is difficult to find insurers providing a decent amount of cover for this category of individuals. Some policies offer higher cover, but with a copayment clause. Here if your employer is providing for health insurance for dependent parents under their group insurance policy, it is an excellent advantage.

SOLUTIONS

There could be two possible solutions. Apart from the health insurance policies provided by general insurers, you can go for health plans from life insurance companies. There are several variants available in the market. These are essentially unit-linked insurance policies (Ulips). The benefits they provide are lump sum payment in case of occurrence of certain ailment as defined in their offer. The payment may be one-time for any one ailment or more than once for multiple ailments. Apart from this, there are payments available in case of hospitalisation or domiciliary hospitalisation and major surgeries. These payments are out of the fund created from the premium you pay. So the amount available will depend on the premium you pay, the option selected and market conditions. This can only be a supporting product. It can't replace the basic health cover.

The second method is to invest systematically in mutual funds to build a separate corpus for health. This is to be used only in case of health emergencies, and not for anything else. In case you have dependent parents having some health issues which might lead to hospitalisation in future, you might have to start with a higher allocation to create a sizeable corpus to be available at short notice. Creation of health corpus becomes a top-priority in such cases.

Therefore, it is always better to spend a small amount and go in for regular health check-ups. Knowing the status of your health will warn you if you are pre-disposed to certain risks. This will not only motivate you opt for a healthier lifestyle, but will also push you to be financially prepared.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

 

---------------------------------------------

Invest Mutual Funds Online

Transact Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Fund Application Forms

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver Mutual  Funds  Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

 

Popular posts from this blog

Surrender ULPPs

  ICICI Pru LifeTime and ICICI Pru Lifestage are Unit Linked Pension Plans. Such insurance linked retirement plans are neither good investments nor do they offer sufficient insurance cover. As you can see, these have turned out to be bad deals. In the Lifetime plan, the fund value is not even equal to the total premiums that you have paid and in the Lifestage plan your return is just about 6% which is quite low. The mortality charges are as per your age which is why they have increased. Moreover, once these plans matures, you will have to compulsorily opt for annuity (regular income) and the annuity rates are generally modest. Assuming these plans mature in the next one year, it will be wise to surrender the plan now and curb your future commitments.   Before you choose to buy a term plan, you have to consider a few points. You need to insure yourself, only during the time you are working and your family is financially dependent on you. At the age of 59, not all insurance companies w...
Read more

ICICI Pru Constant Maturity Gilt dividend

Invest ICICI Prudential Constant Maturity Gilt Fund Online ICICI Prudential Mutual Fund   has announced dividend under the following schemes: Scheme Dividend ( R /unit) ICICI Pru Constant Maturity Gilt-DQ 0.26543239 ICICI Pru Constant Maturity Gilt Direct-DQ 0.27171609 ICICI Pru Q Interval Plan I-D 0.10617296 ICICI Pru Q Interval Plan I Direct-D 0.10703967 ICICI Pru Q Interval Plan I Ret-D 0.10617296             The record date has been fixed as June 13, 2016.   ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in india for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) ...
Read more

NPS Investment Choice for Safe Investors

Invest NPS Online       Whether they invested through SIPs or put in a lump sum amount, risk-averse individ uals have earned the highest returns. These are investors who stayed away from stocks and divided their NPS corpus between G class gilt funds and C class corporate debt funds. On average, gilt funds have given 9.75% annualised returns while corporate debt funds have churned out more than 11% in the past five years. As a result, the average return for ultra-safe investors in the past five years is in double digits. Even in the short term, ultrasafe investors have been the biggest gainers among NPS investors. Will the good times continue? The gilt funds of NPS are holding long-term bonds with an average maturity of over 19 years and a modified duration of about 9 years.These funds have done well because interest rate cuts have pushed down bond yields. But experts say this trend will not stay forever. NPS is a long-term investment and the bonds are predominantly held to matu...
Read more

Buy Health Insurance Plan even if you are covered with my Employer

Buy Health Insurance Plan Online Yes, getting a private insurance cover now, which extends beyond your retirement age, is recommended There are a few reasons why buying a health insurance plan may make sense even though you get medical insurance from your employer. Here are the points you need to think about. Firstly, your employer's insurance coverage will only protect you as long as you are employed with the company. The policy will terminate when you quit the job or when you retire. Post retirement is perhaps the phase when one needs it the most but you won't have it then. Moreover, buying a new insurance policy after the age of 50 means that there will be no coverage for pre-existing diseases.   Lastly, health insurance policy you get from your employer may or may not cover your dependants. ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver M...
Read more

SBI MAGNUM MIDCAP ONLINE

Invest SBI MAGNUM MIDCAP ONLINE   SBI MAGNUM MIDCAP fund didn't fare well in its initial years but, in recent years, has steadily improved its performance under the capable hands of its current fund manager. Although investing predominantly in mid-cap stocks, the average market capitalisation of its portfolio is lower than other category peers.   Although the stock selection approach is mostly bottom-up , the fund manager doesn't shy away from taking bold sector bets , as is reflected in its large exposure to the healthcare sector. She is equally adept at handling performance across market cycles--the fund has captured more of the upside during market upticks and contained the downside during downturns in a better manner than its peers.   Given its superior risk-reward equation, the fund is a worthy pick in its category.     ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing EL...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now