Skip to main content

How to Reduce your health insurance cost

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

 

 

In the past year, health insurance cost has increased across insurers.

The insurance regulator's decision to abolition claim- based loading and introduce life- long renewability are the main reasons behind higher premiums, besides rising medical inflation, say insurers.

These raise the sector's costs, too. But the regulator allows companies to raise rates only once every three years.

Public sector companies' pricing has shown an increase of 14 per cent in the last financial year compared to 2012. And, though private sector companies have not raised prices steeply, they have accounted for a higher premium in age bands beyond 45 years, posting a rise of 10- 12 per cent in the same bands. In the older regime, premiums increased when a policyholder made a claim (claim- based loading) or when he moved from one age bucket to another. You move from one bucket to the other roughly every five years. The new norms allow premiums to increase only when there is a change in the age bucket.

So, while fixing premiums, we will have to factor in this. Therefore, to a certain extent, some kind of cross- subsidisation will happen between the younger and the older customers.

Given that premiums for higher age brackets are anyway high, a further rise in premium gets restricted or coverage for seniors will become impossible.

In the coming years, health insurance cost could rise by another 15- 20 per cent for individuals.

Public sector companies' projected increase would be 25- 30 per cent.

In such a scenario, how to cut your rising health insurance cost? Here are a few ways: Opt for a family floater

If a family needs to be covered, opting for a family floater could be cheaper than individual plans for each member.

Younger families (where the senior most member is below 45 years) should opt for family floaters, as the price is based on the age of the senior most family member. Higher the age of the oldest member, more the premium.

Also, utilisation of family plans is higher than individual plans, each of which might not get used. With Bajaj Allianz Health Guard Family Floater, a ₹ 10 lakh policy for a family of four ( self, spouse and two children) costs ₹ 21,826 plus service tax ( eldest family member between 26 and 40 years).

Typically, two adults ( oneself and the spouse) and two children are covered in a floater policy; parents and siblings are not. A few companies like Oriental India Insurance (Happy Family Floater) also offer cover for parents also. Max Bupa's family floater covers up to 13 relations.

"One can look to be covered under very basic plans like a critical illness, personal accident and hospital cash covers, which are cheaper than a comprehensive cover but provide only conditional coverage," says Mishra. Of course, these covers are no substitute for a comprehensive insurance.

Opt for two-year policies

Insurers Apollo Munich, HDFC Ergo, Star Health offer  two- year health plans. Chances are you will benefit on more than just the premium front. Health insurance policies are annual contracts. HDFC Ergo's two- year 'Health Suraksha' helps you save ₹ 4,469 of premium for a ₹ 4 lakh policy for a 30- year period. A one- year policy would cost ₹ 5,587, whereas a two- year policy would cost ₹ 10,056.

Use top ups for higher cover

Say you want a cover of ₹ 5 lakh. Buy a standalone policy offering sum assured of ₹ 1 lakh or ₹ 2 lakh and buy atop- up of the remaining ₹ 4- 5 lakh, chief executive officer of Bharti AXA General Insurance.

This structure will be significantly cheaper than increasing the base insurance. Such plans get triggered only after you have exhausted your base cover. A ₹ 2 lakh standalone policy with HDFC Ergo's Health Suraksha and a ₹ 4 lakh top- up will cost you ₹ 5,577 (₹ 3,217 + ₹ 2,360). Whereas a ₹ 5 lakh standalone cover will cost you ₹ 7,254.

Check deductibles & sub limits

Customers can opt for voluntary deductible policy, The main aim behind such plans is for bigger claims to be paid by the insurer. Based on their paying capacity, policyholders pay smaller claims from their pocket, thus cutting the insurer's and their own cost.

Bajaj Allianz's product offers a 10 per cent discount in premium if you choose a voluntary deductible — amount you have to shell out before the insurer pays up — of ₹ 10,000.

Similarly, a policyholder could opt for sub- limits for non- life threatening diseases ( hernia, appendicitis, knee replacement) and no sub- limits on critical illnesses ( cancer, stroke). In case of non- life threatening illnesses, you could go to smaller hospitals or be ready to pay from your pocket if the bill exceeds the sublimit.

Checking all the benefits available and lowering higher sub- limits if not required. For instance, say a policy offers room rent of ₹ 20,000. You may lower it to ₹ 10,000, as there's no need for such a high room rent.

No claims benefit

Policyholders should check for no claims benefit in their health plans.

If this is unavailable, shift or port to another plan offering it. Unlike motor insurance, where non- claims bonus can be used to lower renewal premium.

No- claims can only increase coverage in health insurance.

Customers covered under group health insurance from employers can port to individual policies of the same company at the time of changing jobs. This way they can get the no claims benefit, by way of higher sum assured on the individual plan. But they must remember that while porting, they will not get a mirror policy of the group scheme. They will only get what is available in the individual plan. For instance, maternity covers are typically not included in individual policies.

Buy online

Some companies offer online health cover, like Bajaj Allianz, HDFC Ergo and Apollo Munich, which are cheaper than offline plans. Online policies are available at a 10 per cent discount to offline plans.

Ways to cut expenses Saving

Two- year policy, instead of annual plans 25- 30% A mix of standalone and top- up plans 20- 25% Opting for sub- limits and higher deductibles 10- 30% Buying health insurance plans online 10% Use no- claim history 20- 25% rise on sum assured

For further information contact Prajna Capitalon 94 8300 8300 by leaving a missed call

Leave a missed Call on 94 8300 8300

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

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any 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. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. 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
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap FundsInvest Online

      1. DSP BlackRock MicroCap Fund

2.Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Popular posts from this blog

Understanding Your Cibil Credit Information Report

   WE ARE all familiar with the anxiety and uncertainty that we feel when applying for a loan. After all, it's the lender who decides whether we can own our dream home, our first car, or whether our children can pursue higher education. In a nutshell, a better life depends on the lender's decisions.    While other factors do play a part in the lender's decision, the Cibil Credit Information Report ( CIR ) plays a crucial role in a lender's decision to approve a loan application.    Previously, lenders would treat all loan seekers equally. Each applicant, if approved by the lender's internal credit policy, would be charged at the same interest rate for a particular loan size and purpose. The lenders would charge a higher interest rate to all the borrowers, in order to compensate for the possible default of a small portion of the loan disbursed. In other words, it's like a professor (the lender) punishing an entire class (borrowers) for the mischief played b...
Read more

What are the factors affect the changes in Interest Rate of Fixed Deposits?

  What are the factors affect the changes in rate of Fixed Deposits? Fixed Deposits are now considered to be a very old fashioned method of saving, but still attract many investors since they have guaranteed returns at the end of the tenure of the investment at a decent interest rate. There are various factors that affect the rates of interest for a Fixed Deposit. Policies of the Reserve Bank of India   - The several norms and restrictions posed by the Reserve Bank of India , in order to gain optimum control over credit and inflow and outflow of fund throughout the country. The repo rate changes, cash reserve ration tends to change and these changes affect the banking products like Fixed Deposits, loans etc. Recession   - When unemployment in a country crosses the benchmark set Recession hits, and slowly the country faces an economic slow movement, affecting the purchasing power of the people in the country, forcing the Reserve Bank of India to release more funds in the financial marke...
Read more

Mutual Fund Review: ING Dividend Yield

  ING Dividend Yield's small assets enable the fund manager to churn in impressive returns… Strategy The aim of the fund is to invest in stocks which offer a high dividend yield. This fund deploys a value based strategy which aims to gain from investing in fundamentally strong and free cash flow generating businesses. The scheme focuses not only on growth but also on the cash generated by the business, which mostly leads to stable returns even in volatile markets. This fund has a low volatility because of its investment in high yielding stocks. The scheme tries to include stocks that yield dividend above the dividend yield of the Nifty and stocks with liquidity, which throws up a universe of 150 stocks.   Our View Launched in October 2005, this fund invests at least 65 per cent of its assets in high dividend yield stocks. The fund has consistently maintained a mix of stocks across varying market capitalisation, with a higher tilt to mid caps compared to small caps. Howev...
Read more

SBI Small Cap Fund

SBI Small Cap Fund scheme seeks to provide investors with opportunities for long-term growth in capital along with the liquidity of an open-ended scheme by investing predominantly in a well diversified basket of equity stocks of small cap companies. SBI Small Cap Fund has widened its margin of outperformance relative to its category and benchmark in the last one year, earning itself a five-star rating. The fund shows a hefty 18 percentage-point outperformance relative to its peers in the last one year, 5 percentage points over three years and 4 percentage points over five years. Needless to say, it has also outpaced its benchmark to deliver convincing five-year annualised returns of 37 per cent. A believer in the credo that a small market cap does not reflect business quality, the fund looks for five attributes in the stocks it buys: competitive advantage, return on capital, growth, management and valuation. SBI Small Cap Fund is among the few in this space to remain at quite a man...
Read more

Myths about Exchange Traded Funds (ETFs)

1) ETFs Are Similar to Individual Stocks: Like MFs, ETF consist of an underlying portfolio of securities that's designed to follow a specific index or investment strategy. Hence, they are as diversified as various mutual funds. 2) ETFs Only Invest in Equity: Since they are listed on the exchange, the general belief is that ETF only consists of equity asset class. Globally, ETFs are available across asset classes – equity, debt, commodities, real estate and so on. In fact, over the past couple of years, India has also seen the emergence of Gold ETFs. 3) All ETFs Are Index Funds: ETF started as a fund which used to track indices and hence they were branded as index funds that are listed. However, ETFs have progressed rapidly and are no longer associated only with passive index funds. Globally, we have seen the launch of actively-managed ETFs. In India, also we recently saw the emer gence of fundamentally-weighted ETFs on Nifty, which busts the myth that ETFs are index funds and can...
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