A Healthy Dose of Health Insurance

The real importance of health insurance is realised when one enters the family life cycle. The insurance coverage in this case too is dependent on the lifestyle of the spouses, the number of kids and more importantly on the history of medical ailments on either side of the two families. While initially it may seem that a medical policy (individual or family floater) is a mere waste of money which otherwise could have been put to some other good use. A quick calculation of the no claim bonus benefit and the escalating costs of medical care each year makes one realise the folly. The same is true for a single who considers himself/herself healthy enough. Health insurance must be viewed as a future looking policy which will help minimise the out of pocket expenses (which is around 70% of the total expense).

Let us consider an example of a family of four.There are two options available; either opt for a family floater or opt for individual policies. If the family is at low health risk then individual health policy is a risk while the greatest disadvantage for a family floater is that if there is more than one claim in a family in a year the other family members are left with lesser cover. To get rid of such a situation a mix of the two can always be availed: get individual plans for yourself and spouse and a floater plan to cover your children.

Given the uncertain environment and the northward trend of medical expenses, it has but become a necessity for an individual to opt for health insurance. In essence health insurance is a contract between the insured and the insurer which covers the insured against medical expenses arising out of an illness, injury or hospitalisation. In return the insured agrees to pay a regular premium to the insurer. However there is almost no consensus as to how much can be defined as adequate health insurance coverage. To some extent the health insurance coverage can be gauged by the stage of the life cycle one is at, the type of lifestyle one is leading, the responsibilities, the dependents and of course the ability to pay regular premiums.

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