We often hear our client’s saying that “I don’t need to take Health Insurance separately as I am getting covered by my Company”. Well, we strongly recommend you to consider a secondary health insurance for below reasons: 

1. The amount of the Company Cover may not be sufficient
2. Your Company can change the Medical scheme in future
3. As you grow, you may develop medical problems and may not get a new health policy 
4. If you change the Job, the new Company may not have an equally good scheme or may not have a scheme at all, if you join say a start-up
5. Not all Companies cover your parents

Now, if you decide to go in for a secondary health cover, then here are few smart tips for you to determine what kind of cover and amount you should opt for:

Current insurance cost: First, please review your current cost of insurance as a % of your total income. As a broad guidance, we suggest that your total yearly cost of insurance should be around 10% of your yearly take home income.  

Keep in mind your Age & Medical History: If you are in your 40’s, it’s a good idea to start investing in a solid secondary health cover. Based on your present health condition and family history, you can decide the type of cover and amount of the coverage. In addition to the normal health cover, now there are specific policies for Sugar & Heart patients. 

Go for smart features: As you are likely to continue using your Company’s policy as a primary health cover, we suggest you opt for a high no claim bonus policy. Private sector leads with lot of innovative features like high amount of no claim bonus, combination of Individual + Family Floater cover and no sub limits for the claim purpose. 

Take the right amount: You can decide the amount of the coverage based on your current lifestyle, medical situation, your location (i.e. Tier 1, Tier 2 or Tier 3 town) and available budget. As a broad guidance, we generally recommend our clients to take Rs. 10 Lakhs family floater health cover. Based on the specific situation this can be far higher or even lower.  

Select the right Company:  Here you broadly have 3 choices. You could go with National Insurers, Private Sector Players or opt for the Group Health cover by Nationalized Banks. With competitive pricing and innovative features, we believe that private sector policies generally score higher over National Insurers. Group Health cover by Nationalized Banks are very cheap and often the only option for people above 65 years of age. However, the service levels and sub limits in the policy can be a constraint. We suggest you to study the comparative analysis available on many personal finance blogs. 

Prioritize: You are likely to be “Mr. Busy At Work”. We normally recommend you to prioritize Health Insurance before Term Plan (Life Insurance) as the probability of hospitalization is higher than death and with increasing age the entry becomes difficult. Again this depends on client specific situation but we normally recommend the personal finance actions in this order:

1. Obtain health cover
2. Setup emergency corpus
3. Take term plan
4. Setup SIPs for Goal based savings
5. Take satellite covers (e.g. Critical Illness, Personal Accident, Hospital Day Cash)

This article was originally published in Dainik Bhaskar.