Insurance Uncovered

I am a 22-year-old male with no health issues till date. I would like to purchase an individual health insurance plan for myself. Keeping inflation in mind, I am looking for a sum insured (SI) of ₹20-25 lakh and a plan with no co-payment and sub-limits on room rent. Please let me know if the above SI makes sense. What is the most suitable plan I can purchase in this regard.

Yash Sanghavi

Buying health insurance early in life helps one finish the ‘waiting period’ (a mandatory requirement in health insurance policies; it’s a period — first two to four years — during which the insurer will not pay for claims on the policy) when healthy, and claim the policy after five to six years, at the instance of any illness.

Generally, in health insurance, people take aSI of ₹3-5 lakh. For a family with spouse and kids, they look for a higher SI of ₹7-10 lakh.

Unlike in life insurance, where even a policy of ₹1 crore for a 25-year-old comes for as cheap as ₹28/day, in medi-claim policies (or what is called hospitalisation or health insurance plans), the premium is expensive. The premium for a health policy for an SI of ₹10 lakh for a 25-year-old male will be ₹11,000-12,000 per annum.

So, though some health insurers offer covers of even up to ₹1 crore, not many show interest.

Practically, a very high SI on health insurance is not required. Rather, one can split it between health and critical illness insurances.

You need to note that health insurance policies are basically indemnity plans that indemnify the insured against hospitalisation expenses up to the pre-defined limit. They reimburse only to the extent of expense incurred to the maximum of the SI under the policy.

Thus, if you take a policy of ₹20-25 lakh, you may not fully use it. And the plan will pay only for expenses on hospitalisation, and doesn’t cover all out-patient procedures and non-medical costs and expenses on diagnostic tests.

So it is prudent to buy a critical illness (CI) cover too.

CI policies are defined benefit plans that pay the SI in one lump-sum on diagnosis of a listed illness under the policy. You can use the amount to pay for medical as well as non-medical expenses. You can use it even to settle any outstanding financial liability.

Given your young age, a health insurance cover for ₹5 lakh and a critical illness policy of ₹10 lakh should do. As you age or have a family, you can increase the SI without any difficulty.

In health insurance, you can go for Religare Health’s Care, Royal Sundaram’s Lifeline Supreme or Max Bupa’s Health Companion — they don’t have any sub-limit on room rent or other charges. Do not sign up for an ‘SI restoration’ benefit or a policy with a high NCB (no-claim bonus) promise — one, you may not need it, and, two, the premium will shoot up.

In CI, disease-specific policies such as the ones on cancer/heart/diabetes are more comprehensive than the general policies. ICICI Pru Heart/Cancer Protect plan is a good option. It covers both cancer and heart-related ailments.

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