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Financial planning has the following 2 layers.
People in the early years of career focus on putting salary savings into investment schemes and seldom focus on Insurance.
2 Tips:
- Don’t have your personal health tied up to your employer (read: corporate insurance).
- Start Early: Best time to buy insurance is when you’re healthy. Insurance comes very cheap in the early 20s
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Lets say the medical expenditure was Rs 3 Lakhs.
- Indemnity Plan: Insurance is of 5L but it will cover only the cost i.e. 3L
- Fixed Benefit Plan: Will wire full amount and close the policy irrespective of the expenditure.
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Pre- Hos: Any costs incurred due to the disease 30 days before hospital admission. For example, Lab tests run to diagnose the disease.
PS: No reimbursement in case the person is not admitted to the hospital. -
Post-Hos: Any costs incurred due to the disease in the 60 days post-discharge from hospital. For e.g.: Medical Assistant deployed for Bed rest at home.
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Top 3 priorities while selecting a Retail Health Care Plan:
- No Sub-limits in the plan.
- Covers a variety of alternatives (for eg procedure of all types be it via Advanced tech or manually)
- Features of the plan should be suitable such as minimal waiting, factors impacting Claim Settlement Ratio.
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How frequently should existing insurance plans be reviewed?
Must be evaluated every 4 years to suit new requirements as they are portable.
Caution for Insurance Plans for the elderly: The insurance options reduce by 50% every 5 years after the age of 55.
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Wouldn’t it be better for me to have a “general” emergency fund (as a savings account in a high interest bank like Niyo) than to go for specific insurances?
That way I don’t need to book specific insurances for different assets be it my car or body or anything and I can earn 7% interest on the fund as well!
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