Smart tips to effectively increase healthcare coverage

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Smart tips to effectively increase healthcare coverage
Rising medical inflation is a problem, and not just for the uninsured. India is home to a vast population of underinsured individuals-people who mistakenly believe that their existing health insurance is adequate. It is not their fault entirely-thanks to rising costs, what was decent coverage a few years ago is insufficient today. Therefore, to protect one's financial ability to handle medical exigencies, it is crucial to extend one's healthcare coverage.

Top up your healthcare plan

Increasing coverage on an existing health plan is the most obvious option. But it is also an expensive option, one that is ill suited to the family (or individual) on a budget. Fortunately, the top-up plan provides an affordable alternative.

Just as a top up for your mobile phone increases talk-time, a top up for your healthcare plan will extend your coverage amount. For example, Mr. X could buy a top-up policy of Rs. 10 lakh with a threshold limit of Rs. 6 lakh over and above his existing Rs. 6 lakh health plan. The new policy would extend his overall policy coverage to Rs. 10 lakh. If Mr. X then files a claim for Rs. 9 lakh following hospitalization, his basic plan will pay Rs. 6 lakh and the top-up plan will cover the remaining Rs. 3 lakh.

Look beyond employer coverage

A considerable majority of salaried individuals believe that the health benefits provided by their employers will suffice. They do not consider that this coverage will end with retirement. When they really need the coverage-i.e. in the years post 60-they will be uninsured and will have to dip into their savings to fund medical costs.

It is sensible to buy into a renewable health plan with a high maximum age limit well before retirement. Then, when the office coverage disappears, you will still have coverage. Remember, medical costs and requirements increase with age; hence, being insured in your twilight years is crucial.

Never too early to start

You hear this said time and again in the insurance context: ‘The earlier the better'. Starting early presents a serious advantage with regard to the heath plan. A young person in his twenties or early thirties is less likely to have any serious ailments, whether thyroid, diabetes, heart disease, etc. Since you are healthier than your older counterparts, the insurance company will reward you with a higher coverage for lower premiums.

Many people wait until a serious medical problem occurs before purchasing health insurance. Waiting until you fracture your hip and require surgery or are diagnosed with diabetes is a bad idea because you would then represent a high-risk individual-this would result in high premiums or even outright policy denial.

Live healthy

One can never underemphasize the importance of a healthy lifestyle, and the health insurance sector offers additional motivations for the same. For example, a non-smoking teetotaler will receive higher coverage at a lower rate than his peer who occasionally drinks or smokes. Similarly, a person with a healthy BMI will get a better deal than one who is overweight.

A tax incentive

In addition, Section 80D of the Income Tax Act promises tax benefits on health premiums of up to Rs. 15,000 for self, spouse and children (all below 60 years of age) and additionally on up to Rs. 20,000 paid as premium for senior citizen parents. This offers all the more reason for extending your health cover.

For more articles by Deepak Yohannan, please visit
You may contact him directly on Twitter: @dyohannan

Read more about: insurance, healthcare insurance
Story first published: Friday, November 22, 2013, 8:52 [IST]
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