How to choose health insurance

Healthcare is an expensive affair making it extremely important to invest in health insurance to protect our family and our finances from the huge dent that a medical emergency can cause. Additionally for tax payers, health insurance also carries a tax exemption under section 80(D) of the Income Tax Act 1961.

With a host of health insurance products in the market, it is important to choose the right one. The insurance base cover should be adequate to cover expenses when a contingency strikes.

Here are a few questions that you need to ask yourself before deciding on a policy:
8 The number of members in your family: Your policy should cover all members of your immediate family. In metros or mini-metros, for a family of three or four, health insurance plan should offer you a sum insured of at least 3 Lakhs.

8 Age and profile of family members:  Whether senior-most people in the family are in the mid or high age groups (as determined by an insurance company). If your Insurance plan covers an older member, the health cover required should be higher. The health cover should take care of the high medical expenses involved in the treatment of a critical illness in case it occurs in an older family member.  While leaving enough sum insured to cover smaller expenses in case, for example, there is another contingency in the family that occurs due to the illness of a child.

* Present state of health of each family member: In case any of your family member have some past history of diseases or are prone to one. The insurance  cover must adequately suffice for an emergency resulting from the illnesses.
* The life style factor:  Whether they are healthy, exercise regularly, level of stress, dietary habits etc. These factors have proven to have impact on incidence of diseases/conditions.
* The city/town where you and your family is located:  In some of the larger cities healthcare costs are much higher.

There are a wide range of products available in the market to help you ensure that you and your family is well protected in case of an emergency. It is vital for a complete insurance plan that you purchase covers under all of them. In addition, the premium you pay for purchasing a health policy gives you a rebate from income tax.
(i) A Standard Health Insurance policy:  A basic health cover which covers hospitalisation expenses to treat diseases and injuries. It is a basic policy and must have a sum assured that is adequate to cover the minimum medical expenses that you may incur in case of an illness.  This is normally available on individual basis or on family floater basis for your immediate family.

(ii) Critical Illness Policy :  A specialised policy which insures you against the risk of a critical illness like heart attack, Heart valve surgery, coma, organ transplantation, kidney failure etc. An individual who already has an existing health cover can top - up their base cover with a specialist cover like critical illness. This is especially crucial if your family members are in mid to high age groups and if your existing health cover is low. A critical illness cover gives coverage over and above the sum insured under your existing policy.
(iii) A high deductibles or Top-up: It provides extensive cover for hospitalisation expenses incurred for treatment of disease, illness, injury and is subject to deductibles. This cover also acts as a top-up to your base cover. This has a deductible component and one can use the current policy (employer provided policy or your own basic cover) and if this does not prove sufficient, you can claim under the top-up plan. Also a high deductible policy is cheaper than taking a regular health insurance policy.

(iv) Hospital Cash Cover:  In case an individual is worried about the adhoc expenses that may arise due to hospitalisation which are otherwise not part of the hospital bills (for example  transportation to and from the hospital, expenses of accompanying persons, possible income loss etc), one can take a hospital cash policy which provides daily hospital allowance for each day of hospitalisation. This can also apply over and above one’s existing/base health cover. If one is adequately protected under insurance, it means that your savings are protected in case of a medical emergency. It also gives you additional tax benefits.
(The writer is Vice President- Property & Engineering , Bharti AXA General Insurance)