Recent data on health insurance in India shows that asset sales or loans finance 47% of rural and 31% of urban India’s hospitalization costs. A health insurance plan or health scheme covers at least one member of 41% of Indian households, according to the National Family Health Survey-5 (NFHS-5). These statistics highlight the importance of having a plan in place to cover the costs of healthcare.

Most Indians—roughly 75%—pay for medical services out of pocket and are not included in any public or private health insurance programs. This can be a significant burden, as 70% of Indians spend their entire income on healthcare, and 3.2% of Indians fall below the poverty line due to excessive medical costs. As a professional Registered Investment Officer, it is essential for me to remind future investors and clients of the importance of having adequate health insurance coverage.

Why Employer-Provided Coverage is Not Enough

While employer-provided group policies can be a useful addition to an employee’s total remuneration package, it is vital for individuals to also have their own independent coverage in place. This is especially true in the current environment, as the COVID-19 pandemic enters its third year and serves as a reminder that the threat of illness and hospitalization is ongoing.

Employer-provided coverage is not necessarily forever and may not be available once an employee leaves a company or the company changes hands. Group policies frequently include co-pay and room rent restrictions, low-sum insured amounts, and other exclusions. It is advised to have a sum insured of at least Rs. 50 lakh, if not more, especially for the family’s primary provider, in order to ensure adequate protection. Having a policy that covers daycare procedures, pre and post-hospitalization costs, and ambulance fees is a good idea in addition to covering hospitalization costs.

Factors That Affect Health Insurance Premiums

Even though the cost of health insurance rises with age, it’s still crucial to get coverage when you’re younger to avoid the potentially high premiums associated with getting older and having pre-existing conditions. Health insurance premiums are typically calculated based on a variety of factors, including the age of the policyholder, their gender, their location, their medical history, and the type of coverage they are seeking.

Other factors that may be considered include the policyholder’s lifestyle and occupation, as well as the level of coverage they are seeking.

Several other factors can affect the cost of health insurance premiums. For example, older individuals may pay higher premiums due to an increased risk of illness and injury. Similarly, those with pre-existing medical conditions may also pay higher premiums, as they are considered to be at a higher risk for medical issues.

Searching for the best deals is a constant when one goes shopping in retail outlets. To reduce our spending, we’re okay with switching brands and retailers. Unlike buying a car or other retail items, switching insurance providers frequently is not in your best interest.

The Benefits of Sticking with One Insurer

It is crucial to stick with one insurer for a few reasons.

  • First, switching insurers can be a hassle, as you will need to go through the process of applying for new coverage and potentially have to undergo a new medical underwriting process. This can be time-consuming and inconvenient.
  • Additionally, if you have a history of coverage with one insurer, you may be eligible for specific discounts or loyalty programs that can help lower your premiums over time.
  • Finally, sticking with one insurer can help you build a relationship with your insurance provider, which can be helpful if you need to file a claim or have questions about your coverage.

Only 3.5% of Indians currently have retail health insurance policies, and many continue to rely on employer-funded group coverage. Remember that relying solely on such policies is not a wise decision.

In conclusion, it is important to remember that employer-provided group health insurance policies may not always be sufficient to cover all of your medical needs. While these policies can be a valuable addition to your total remuneration package, they are often limited in their coverage and may not be available once you switch organizations. To ensure that you and your family are adequately protected, it is advisable to have your independent health insurance policy in place. It is best to have an independent cover in place for yourself and a separate one for your parents to ensure long-term protection. Unlike group policies, regular health insurance plans provide continuous coverage, even when you change jobs or locations. To get the best protection for your needs, carefully consider the level of coverage you need and shop around for the best policy for you.