How to Plan your Health Insurance

How to Plan your Health Insurance

The first step in anyone’s Financial Planning is providing for a good HEALTH INSURANCE PLAN. And that’s because if there is any Hospitalization in the family and you do not have a good enough health insurance, the first thing you would do is to withdraw the required amount from your existing investments that you were doing for some other long term financial goal.

A good plan means, it should be able to take care of the possible major hospitalization / surgeries’ expenses in next 8 to 10 years for all the family members. After those 10 years, every person should take a review and enhance the coverage under the plan if it is not enough for next 10 years.

How can one decide the coverage that might be enough?

Go to the best Hospital within your vicinity and ask the Hospital Billing counter person – “How much would be the approximate cost if you were to get admitted in that hospital for say By-pass surgery? “If the answer is Rs 600,000/- , then your Health Insurance must be of minimum Rs 750,000/-.

In almost all Health Insurance policies, only 80 to max 90 % of the total claim amount is reimbursed. So, if the possible expense is 6 lakh, policy should be of 7.5 lakh.  Also, in almost all policies, there will be some deductions for the charges like for consumables, medicines etc.

Its always better to have a Family Floater plan than having an Individual plan as you can get higher Sum Assured under a Family policy at some discounted premium. Also, it’s a very rare situation that more than one family member gets hospitalized for a major surgery / disease  in a single Policy year.

In the worst scenario, any amount of Mediclaim might look very less… One example will prove it –

One family of 5 people had a Family Floater of 10 Lakh.  Unfortunately, all of them met with an accident and all were severely injured and were admitted to the hospital. By God’s grace all survived … but, they were in the hospital for over a month. The total bill for all 5 members was almost 35 lakh. Now, in this case, one would think 10 lakh is a good enough amount of insurance. But, that amount was exhausted in first 7 days of their hospitalization. But this is one of the rare occasions. In general scenario, 10 Lakh might have been enough.

Now, the amount that you need to insure your family for also depends on your location, your lifestyle etc. If in an unfortunate situation, you are asked to undergo a major heart surgery and you can not think of any other hospttal than the best one in Mumbai, then the amount of Insurance must be minimum 20 –  25 lakhs. If you are staying in suburbs of Mumbai and are ready to be admitted in grade 2 hoapital, 10 lakh might be enough.

All said and done, the Insurance Amount depends on many things like your lifestyle, location, health status of family members, your premium paying capacity and some other factors.

Pray to God that your money spent for paying the Health Insurance Premium is wasted…. But at the same time, you have to have a backup…

Wishing you a healthy and wealthy life…