Healthcare costs are sky rocketing these days. From medicines to treatments, everything has become expensive. Considering this, many health insurance companies have launched high value health insurance policies. These policies offer a higher sum assured (such as, Rs 50 lakh or Rs 1 crore) and enable an individual to claim a higher amount for various medical expenses.

The features of high value health insurance policy are:

• Apart for hospitalization costs, these policies also offer cover for higher maternity, baby-care, post-treatment, OPD and day-care procedure covers and insure organ donation. Some insurers also provide health cover for alternative treatments such as homeopathy and ayurveda up to a certain limit
   
• Overseas treatment for some diseases and / or illnesses are also covered if similar treatment is not available in India
   
• These policies usually do not have sub-limits on the hospital room rents. However, they may permit only low category rooms due to categorisation criteria. This might be a negative for some High Networth Individuals (HNIs) who are opting for a high value health insurance policy
   
• Some policies may have a 20% co-pay clause for senior citizens (Whereby 20% of the expenses will have to be borne by the insured who are senior citizens)
   

How much is the premium?
Well, the premium is rather steep. For a 35 year old individual buying a health insurance cover of Rs 50 lakh, the premium is in the range of Rs 15,000 to Rs 60,000. If you opt for a family floater policy for a family of four (with the eldest member aged 35 years), the premium would be even more - in the range of Rs 35,000 to Rs 1,00,000 - for the same amount of health insurance cover i.e. Rs 50 lakh.

Well, the main reason for such a high premium is the high underwriting risk involved for the insurer for the additional services offered.

So, should you opt for a high value health insurance policy?

Well, taking cognisance of rising medical inflation and increase in number of dreadful diseases (such as cancer, brain tumour, etc.) vis-à-vis the features offered; a high value health insurance policy seems beneficial. But PersonalFN is of the view that the sum assured and the kind of the health insurance policy that you choose must depend upon factors such as:

• Your age
• Your income;
• Your expenses & liabilities;
• The nature of job;
• Number of dependents in the family
• Medical facilities you desire... and so on.
   

If your income and other important expenses such as children’s education, saving for retirement, household expenditure, etc. does not permit you to pay the higher premiums of a high value health insurance policy, you can choose a suitable health insurance policy of a lower sum assured and then later top it up via top-up plans depending upon your requirements.

Besides, you should ideally choose a health insurance policy that...

• Does not have any maximum limits on room rent expenses;
• Has least waiting period to cover pre-existing diseases;
• Has Least or no co-payment clause;
• Has less number of exclusions
• Has a good number of hospitals in your city under its network;
• Has more number of days for pre and post hospitalisation expense cover;
• Has a good claim settlement ratio; and
• Provides for a high no-claim bonus
   

The premium you pay should be a vital aspect in the selection process to buy a health insurance policy, but should not hold paramount importance in the process. Don’t just buy a policy that provides you insurance cover at the lowest premium. Understand what is covered and what is not covered.

PersonalFN also believes that you must have your own individual health insurance policy although your employer may be conferring you with a welfare benefit through a group health insurance policy (which may be offering a substantial coverage). This is because; tomorrow if you shift your job it may not be the case that the new employer will also offer you such a benefit at a comparable coverage. Likewise when you retire, the benefit of group health insurance may cease to exist. Hence, it is prudent to have a separate health insurance policy (apart from the one provided by your employer).

PersonalFN is of the view that it is extremely important to have adequate health insurance coverage for yourself and your family as life is quite uncertain and medical expenses have the potential to burn a huge hole in your pocket. Also to live a blissful retired life, having an adequate health insurance cover is imperative, since it not only aids you to manage your cash better during your retirement period, but also can help you live a stress free retired life.

It may interest you to know that PersonalFN’s "The Retirement Letter" can guide you in the process of planning your retirement. It could handhold you through everything that is required for retiring rich.

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