Don’t Ignore Health Insurance Early in Life.

Narendra Kumar (38) had worked in several prestigious organizations during his working career of 15 years and he seldom had to worry about buying a health insurance since his employers had provided him the insurance cover, as part of his annual package. He had even boasted to his self-employed friends of the merits of working in an organization rather than being self-employed as he felt that the benefits of being employed far outweighed the risks faced by the self-employed. During one of his employer’s annual routine medical checkup, he was shocked to find that his lipid levels were very high and his sugar levels had breached the danger mark, by a wide margin.

Vinod immediately contacted a health insurance agent and applied for Rs 5 lakh of health cover for himself and his family. He had to undergo medical tests since he mentioned his present medical condition and the insurance company included the present medical condition as a preexisting condition, stating that hospitalization related to that condition cannot be claimed for the next 4 years.

There are several such examples across the country and we still find people ignorant about taking a health cover early in life. Many still scoff at the prospect of them falling prey to any dreaded disease early in life. Also they feel that their employer cover should suffice should any hospitalization take place in the near future. In Mr. Kumar’s case, though any future hospitalization expenses would get covered by his company’s mediclaim policy, whether that cover would be adequate is something no one would know. Secondly if Mr. Kumar joins another organization, he runs the risk of not being covered by any group insurance policy by the new employer, who might not have any such facility.

We have seen a marked change in the lifestyles and eating habits of people in the last few years or so. Odd working hours is leading to a sedentary lifestyle, with no time for exercise and which is resulting in the deterioration of health, in the younger generation.

Secondly healthcare is becoming more and more expensive with every passing day and even though medical science has taken giant strides on the treatment and development of better medicines and techniques, the costs have not come down. Even for a normal appendix operation, one of my colleagues recently had to cough up an amount of close to Rs 50000 in one of the reputed private hospitals. The charges for any treatment of ailments related to the heart or any major organs, would be anybody’s guess. Also a calamity in the form of accidental hospitalization can also not be ruled out, what with India registering among the highest accident related cases in the world.

How much cover should one take early in life

This depends on the income earned and the responsibilities that a person shoulders. Let us consider two individuals, Ram and Shyam for our reference. Ram’s family (especially parents) are generating a steady income and have some time for retirement, therefore he can go in for an initial cover of around Rs. 2 lakhs, which between the age of 22 to 26 should not cost him more than Rs 2500 per annum, which is easily affordable and it also enables tax relief under section 80D. For Shyam, who is the sole earning member of the family with retired parents, it becomes necessary to take a cover in the range of 3 to 4 lakhs which should cost between Rs 3500 to Rs 4500 per annum.

Once Ram and Shyam get married, then the spouse’s name can be added in the policy during the policy renewal period and a cover of Rs 2 lakhs should suffice for the spouse’s of both Ram and Shyam. An exception is made in the case of young members who are drawing a fantastic salary per month. It would be better off for them to directly take an Rs. 5 lakh cover as the stakes are higher in their case due to their better lifestyles. But they could pay the higher premiums due to their higher income levels.

For couples who are in the 28 to 35 years range with kids, a family floater policy of Rs. 5 lakhs should be good enough especially when either of them is also having an employer group insurance. But for people above 35 years to 40 years, it makes sense to take individual covers on each (at least Rs 5 lakhs for self and spouse) as we are noticing higher incidence of hospitalization in this age group. Nowadays companies are offering medical coverage even more than Rs 10 lakhs and people in  the higher income bracket should consider those covers irrespective of whether they are covered by their employer or not.

Ignoring health insurance can cost you dear. Its time you started giving health insurance its due attention.