Siblings often share clothes. It is economical and convenient. But then, one sibling goes out in the brand-new denim jacket you wanted to. Not so convenient now, is it?
It’s the same with health insurance. Your whole family might be covered under the same healthcare plan. It all sounds convenient. But what happens if two family member fall ill in the same year? The sum insured may not be enough to finance both their healthcare costs.
That’s where individual health insurance policies can come in handy.
What are individual health insurance policies?
Such plans provide medical coverage for one person. The sum insured would depend on the specific healthcare needs of that person. The premium payable would vary based on different factors.
- The insured person’s age
- Medical history
- Place of residence. That’s because healthcare costs vary depending on whether you live, for example, in a big city or a smaller town.
Types of individual policies
Cashless plans: Should you need hospitalisation, the insurer will directly pay the hospital bills. This comes in handy in an emergency, as you do not have to arrange for funds right away. But the cashless facility may be available only if you seek treatment at the insurer’s network hospitals.
Indemnity plans: You pay the medical bills as they arise. Then you file a claim for reimbursement with the insurers. At this stage, you need to submit all bills related to the hospitalisation.
Daily cash benefit plans: Such plans give you a cash allowance for every day spent in the hospital. The daily cash benefit is a fixed one. You get the specified daily payout regardless of whether your daily hospitalisation costs are higher or lower.
Critical illness plans: If you are diagnosed with a critical illness, such a plan can come in handy. It will pay you a lump sum amount upon the diagnosis of certain illnesses. These may include cancer, kidney failure, and major organ transplant, among others.
Senior citizen plans: These plans cater to those above 60 years of age. At this stage of life, people may face serious illnesses and higher medical costs. In this case, senior citizen plans provide better financial cover than other plans. They also take preventive measures by allowing for regular health check-ups.
Benefits of individual policies
- No sharing: Unlike in a family floater policy, there is no need to share the risk cover. You get a dedicated sum insured.
- Cheaper option if you have older family members: Including senior citizen family members in your family floater policy could push up your premiums. It may also reduce the effective coverage available because older people have higher medical expenses. In such cases, individual policies may be a better option.
- Possibility to customise policy: You may be covered by your employer’s group insurance scheme. But it may leave gaps in your coverage. For instance, you may be left without maternity cover. Or, the coverage amount might not be enough. In such cases, a tailored individual policy with the right add-on riders could help.
- Get coverage even after leaving a job: The group health plan from office may cease once you retire or quit. An individual plan could provide the risk protection you need at this time.
Things to keep in mind while buying individual policies
- The right sum insured: Your age, medical history, and health risks will all play a role. Use a health insurance calculator to do the math.
- No-claims bonus: A young person is less likely to claim against a health plan. So, buy insurance early on. You could accumulate a nifty no-claims bonus over the claim-free years. This would reduce your premium outgo.
- Lifetime renewability: Get a policy that allows you to renew the plan lifelong. This will give you the coverage you need even in your post-retirement years.
- High claim-settlement ratio: A high claim-settlement ratio means that the insurer is more likely to service your claims.
- Good hospital network: When choosing a policy, check the insurer’s hospital network. You should have access to good hospitals that are close to your house.
- Other clauses: Look for policies that come with shorter waiting periods. Also, keep an eye on the exclusions. Check if there are sub-limits or caps on room rent.
- Honesty while applying: Be truthful and accurate when filling in the application form. An error in the form today could mean trouble with the claims process tomorrow.
When it comes to clothes, it helps to share. But when it comes to insurance, be a little selfish. Ensure that you have sufficient health coverage today. This will ease your emotional and financial strain should a medical emergency arise in the future.