Skip to main content

How much health insurance cover should you buy?

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

What is the adequate health insurance cover one should have? Should I go with individual policy or family floater? Do I need to top it up with personal accident policy and critical illness plan also or just buying higher sum assured in mediclaim would be enough. All this and many more questions naturally come up in mind of person who gets convinced to buy health insurance policy. I used the word convinced because there are many people who still believe that buying health insurance is waste of money or are dependent on their employer's provided cover. I will try to answer all the above mentioned queries through different posts but today I will be covering the first one i.e. "How much health Insurance should anyone have"?

 

Actually there's no thumb rule which says how much health insurance coverage is good enough but yes there are some considerations which will help you in selecting adequate coverage. The coverage that you buy should be enough to ensure that if you (or a covered family member) get sick or injured you are not footing the entire medical bill on your own. Consider the following parameters before selecting medical cover.

1. City you live in:

You will agree with me that the cost of treatment in metro cities is around 25-30% higher than same treatment cost in non-metro cities. So depending on the city you live in you may choose your health insurance cover. But do consider the situation when patients get referred to metro cities as small cities does not have quality medical facilities. Out of my personal experience, I feel that for a young (Under 30) healthy person Rs 3 lakh cover would be bare minimum in non-metro and Rs 5 lakh cover in metro. And here I am talking of Individual plans and not family floater.

2. Your age bracket:

If you see the rate card of health insurance policies, you will find that different age groups have different premium rates. This is because the probability of falling ill is less in young age and same increases with age. So should be your strategy. You should start with a base cover in the young age and keep on increasing the cover as and when your premium bracket increases. Though if you don't make claim in the first 5 years, then automatically your cover will get increased by 50% through no claim bonuses, so you may discount this increases in your calculation and increase your health insurance coverage accordingly. It doesn't make sense for a son (30) and father (55) to have a same health insurance cover.

3. Family and Personal health history:

If there's a family history of any illness than you should also prepare yourself for the same by getting enough health insurance and increasing it time by time. This is because once you also get diagnose with the same illness than it would be difficult for you to increase your existing coverage or buy a separate cover. This is one of the reason we advise corporate employees to have separate cover along with the employer provided cover. Keep getting your annual health check done and also keep watch on your health insurance cover.

4. Lifestyle:

Your lifestyle also guides your quantum of health insurance coverage. The kind of lifestyle we live automatically make us prone to many diseases. Stress has become a part of life, working hours don't let anyone to exercise or have healthy food. Some use innovative excuses for their sedentary lifestyle. Many are habitual to smoking and boozing. No point for guessing the state of health after few years. Even if there's no family history, still we are prone to many lifestyle diseases like diabetes, hypertension, high cholesterol etc. Of course you can delay or avoid all these by improving your lifestyle, but also be ready for the worst…keep on increasing your health insurance cover.

5. Affordability:

Many people avoid high health insurance cover just by giving excuse that premium is high and not affordable. I don't agree with that reason. I always believe that affordability is a subjective term. When you have control on your cash flows, than you can very well afford the health insurance premium amount. Having 2 pizza parties every month costs around Rs 1500/- which means Rs 18000/- a year, Going out for movie every week with family in multiplex easily cost Rs 700-Rs1000 per week which means Rs 35000 – Rs 48000 a year, those who smoke and booze can calculate how much they spend on all these …. These are only few examples…you can figure out many such areas if you track your cash flows closely. And then you cannot say that health insurance premium is unaffordable. I am not saying that you should stop enjoying, but have a considerate view on priorities. Take a holistic view of your finances and have maximum possible health insurance coverage.

There's another school of thought which says that your health insurance cover should at least be equal to your annual income. The main purpose of buying health insurance is to lessen the burden of paying complete medical bill in case of any eventuality. I believe that the way medical and education costs are increasing, going forward life is going to be very difficult. Having health insurance is good but many times health insurance may not be enough, so one should also accumulate decent medical corpus too. Be ready for the emergencies.

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 in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax PlanInvest Online
  2. HDFC TaxSaverInvest Online
  3. DSP BlackRock Tax Saver FundInvest Online
  4. Reliance Tax Saver (ELSS) FundInvest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) FundInvest Online
  7. SBI Magnum Tax Gain Scheme 1993Invest Online
  8. Sundaram Tax SaverInvest Online
  9. Edelweiss ELSS Invest Online

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

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 MutualFundsInvest 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

ULIP Review: ProGrowth Super II

  If you are interested in a death cover that's just big enough, HDFC SL ProGrowth Super II is something worth a try. The beauty is it has something for everybody — you name the risk profile, the category is right up there. But do a SWOT analysis of the basket, and the gloss fades     HDFC SL ProGrowth Super II is a type-II unit-linked insurance plan ( ULIP ). Launched in September 2010, this is a small ticket-size scheme with multiple rider options and adequate death cover. It offers five investment options (funds) — one in each category of large-cap equity, mid-cap equity, balanced, debt and money market fund. COST STRUCTURE: ProGrowth Super II is reasonably priced, with the premium allocation charge lower than most others in the category. However, the scheme's mortality charge is almost 60% that of LIC mortality table for those investing early in life. This charge reduces with age. BENEFITS: Investors can choose a sum assured between 10-40 times the annualised premium...
Read more

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...
Read more

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...
Read more

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...
Read more

Bharat Bond ETF

Top SIP Funds Online   The government of India has paved the way for the launch of India's first corporate bond ETF called as Bharat Bond ETF. Edelweiss Mutual Fund will be managing it. The fund is mandated to invest in AAA-rated bonds of select public sector companies (see the table 'List of constituents and their proportions in the portfolio'). The government has a threefold objective behind launching this product. One, to deepen the liquidity of the Indian debt markets and provide a gateway for easy retail participation. Two, to solve investors' dilemma of picking premium bonds. Lastly, to help the underlying government-owned companies raise funding for their operations. But does it make sense for you, the investor, to invest in it? Lets find out. What is the product? As the name suggests, it is an exchange-traded fund which will be listed on a stock exchange from where its units can be bought and sold post launch. It will have two variants - one maturing in 3 ye...
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