So you must first evaluate the ideal amount of health coverage your family will need, keeping in mind the size of your family, the needs of your family, your premium paying capacity and the amount of existing cover you have, if any. You must also look into the place where you are residing (as the cost of treatment in a metro is generally higher than in a Tier 2 location) and the existing health situation (past history or family history of any specific diseases). Since longevity is increasing, you must consider inflation for atleast the next 30 years. If you realise you do not have sufficient health cover, you should take steps to enhance this.
There are a few options you can look at, in case you find yourself having inadequate health insurance:
Opt for a high Sum Assured
The first step would naturally be to increase the coverage you have. However, it is seen that most insurance companies stop with a maximum Sum Assured amount of Rs. 5 lakhs or Rs. 10 lakhs. Some policies like Apollo Munich and Star Health offer policies upto Rs. 15 lakhs. However, beyond this, a higher Sum Assured option is a rarity. Max Bupa’s Heartbeat plan has an option for Rs. 50 lakhs, but the premium is exorbitant, crossing Rs. 1 lakh per year for a family of 4, with the primary policyholder being 40 years of age. ICICI Lombard also has an option for Rs. 50 lakhs, but it is available in the offline mode only. Check the total health coverage you have for your family (including what your employer provides you) and assess if you need to increase this amount.
Currently, porting from a company group cover to an individual policy is not directly possible. If you along with your family members are covered under a group policy, then you should first migrate from such a group policy to an individual health policy or family floater policy with the same insurer, and then as a second step port the policy to another insurer. This means that if you are a 30 year old, then secondary cover will not be so much important as you can shift the insurer. However, this may not apply to a person in his early 40's since cover after 45 has to go through medicals, cost rises and post retirement in 58, he would then need to use porting. Moving from company group cover to individual cover may be difficult at that age. Please click here to read the recent IRDA guidelines which include the portability clause.
Split the Cover
You can also look at de-risking your health cover by taking insurance cover separately from two insurers. You can consider splitting the cover for yourself and your spouse in one policy and for your children in another. Alternately, you can also consider taking a policy for yourself and your spouse separately from two leading insurance companies. This way, you can cover your entire family for the desired amount and de-risk your health cover.
Go for a Top up Cover
Another way of enhancing your health cover would be to opt for a top up health cover. This is an additional insurance which gives coverage over and above your existing health insurance. Top up covers are an inexpensive way of adding to your existing cover. However, you can claim under the top up cover only if expenses are beyond a certain limit known as the “deductible” and also only for a single occurrence of hospitalization. Hence look at both the positives and limitations of a top up cover before you opt for one. Please click here to read in detail about top up health insurance plans.
Base Health Cover + Critical Illness & Personal Accident Covers
Having a base health cover for a lower amount and taking critical illness and personal accident covers can help in reducing overall costs and also partly de-risking your cover. Please click here to read about personal accident insurance policies and please click here to read about critical illness insurance policies.
Build a health corpus
Some people like to de-risk by having reduced dependency on insurers. This can be achieved by creating a sizeable health corpus via regular investments in MF investments or purpose specific ULIPs. However, you should be careful of costly ULIPs. The basic health cover of say Rs. 15 Lakhs can continue and the health corpus can be used post retirement for any major illness. The health corpus can also be partly used for regular preventive check ups etc. At the end of your life, the left over corpus can be part of your estate planning.
Thus one of the most important questions to be answered while evaluating health insurance options is - How much coverage is sufficient? In today’s world, even a cover of Rs. 10 lakhs for a family of four looks low. Therefore you must make sure you have atleast a decent amount of family coverage, in order to avoid rude shocks of having to meet medical expenses from your pocket.