In today’s world, the rising cost of medical treatments have become a financial burden, particularly for families belonging to the low income groups. Even though India is known for the far fetching developments in medical tourism, for most of the Indians, medical treatments in multi-specialty hospitals are becoming unaffordable with each passing day.
Medical expenses depend primarily on the nature of illness, the type of treatment and also the length of treatment. In the absence of a family health insurance plan, the aforementioned factors lead to financial stress and anxiety. For a person with dependents and ever growing responsibilities, it would not be wise to take risks especially when a multitude of family health insurance plans are available in the market. However, choosing the health plan can sometimes be a complicated process and therefore it is essential that you have a clear understanding of your family medical history.
Things to consider while selecting your family health cover
- Number of Members: The size of your family may not necessarily help you analyze the healthcare costs involved, but the number of members surely does. For example, a 2 member family with serious medical conditions may spend more than a 4 member family with no illness.
- Age of Members: When a family consists of members belonging to different age groups, it is ideal to segregate the health requirements of each member before deciding the plan. A younger member of the family may not be at the same level of health risk when compared to an older member.
- Pre-existing conditions: Generally, insurers demand a 3- 4 years waiting period for members with pre-existing chronic conditions. Some companies offer a coverage for preexisting illness right from the first day of entry. So while going for a health insurance plan, compare the plans and select the one that covers the individual requirements of each member of your family.
Family Floater Plans or Individual Plans: Which is better?
Once you have identified the needs of individual members of your family, you may know that sometimes a family floater plan may not be the right fit. In such cases you will have to choose between an individual policy and family policies or a combination of both.
Let’s consider the following example of two individuals Clark and Smith who are 38 years and 43 years respectively.
While Clark chose a family floater plan to cover his 35 year old wife and his 24 year old dependent sister, Smith opted for a combination of family floater plans and individual plans. The reason being, Smith was looking for a policy that will cover his wife, children and his aging parents. He picked up two individual plans for his parents and a family floater for rest of the members. In Smith’s case, the number of aging members were two and their medical requirements would vary greatly from the younger members of the family. Therefore, a combination plan was the ideal choice for him, as premiums for family floater plans are based on the age of the oldest member. But in case of Clark, the members to be covered were young and it justifies his reason for opting a family floater plan. As the premium payments for family floater takes into account the highest risk factor, it is advisable that older members are covered under individual plans.
The above example illustrates how assessing the needs of individual members can help in reducing surplus costs while planning your family health insurance cover.
Different types of Health Insurance plans
- Hospitalization Plans: These plans compensate for the hospitalization costs of the individual or family depending on the sum insured. Some insurance companies offer additional lump sums and even post hospitalization expenses are covered under the plan
- Daily Cash Plans: Daily cash plans payout a fixed amount on an everyday basis regardless of the actual medical expenses incurred.
- Critical Illness Plan: Critical illness covers are offered either as riders or as a separate plan. It provides a lump sum amount to the insured when he/she is diagnosed with severe conditions such as heart attack, stroke, kidney diseases and the like.
Always Compare Benefits
Once you have made your decision to choose a health plan for your family, the very next step is to compare the plans of different insurers. This step should be given due importance as one is likely to miss out a custom made plan if choices are made without comparisons. Also, one has to decide whether he wants a higher health coverage with high premiums or a low coverage plan with small premiums amounts.
Significance of sum assured on the family health policy
While comparing family floater plans and individual plans, sum insured on the policy is a chief differentiating factor between the two. While family floater plans offer the benefit of sharing the sum insured, multiple individual plans provide a certain assured sum to each member of the family. For example if three members are covered under a family floater plan for 3 lakh and one member uses up more than 1 lakh, then the remaining amount can again be shared again by all the members of the family. But in case of multiple individual plans with a cover of 1 lakh each, individual members will not be eligible for benefits once the sum insured is used up.
What to look for in a family health insurance plan
- It is always best to opt for a policy that does not have capping on room rent. Some insurance policies set a limit on the daily rent payable, which sometimes ends up with the policyholder paying a portion of the rent out of his wallet.
- With the latest improvements in medical technology, many of the treatments do not require getting admitted. Therefore it’s advisable to go for a policy that gives sufficient space for day care procedures as well.
- Cashless claims are offered only in the network hospitals of the insurance company. One must make sure that the network hospitals are within reach while opting for the plan.
- Some of the family floater plans provide maternity benefits provided a certain amount of premiums have been paid. It is ideal to compare various policies and understand the restrictions and benefits on maternity covers.
- Most of the health insurance policies have exclusions on some or the other disease, either temporarily or forever. One should have a clear idea of the types of diseases covered under the plan and the exclusions.
GST rate of 18% applicable for all financial services effective July 1, 2017.
Disclaimer: Premiums may vary depending upon factors like age, location and prevailing taxes/GST.