health insurance case studies

These cases will definitely make you buy health insurance

A large number of the population does not have health insurance in India. Considering the increasing life expectancy, increasing healthcare expenditure, and rising lifestyle diseases, shouldn’t the number of those with health insurance be more? Why do most people not care about buying health insurance?

The reasons could be many: a general lack of awareness and importance about health insurance, a belief that health insurance is a useless expense, or a belief that it is expensive and only for those who can afford it.

Whatever be the reason that made you avoid buying health insurance, after reading these cases, you will definitely want to buy a good health plan for yourself and your loved ones. Read on.


Case 1

Top-up, family floater or individual health insurance plans – what is best?

Kalpit is insured by a group health insurance provided by his employer. The policy with sum insured of Rs 5 lakh also includes his wife, two children and parents. But he doesn’t think Rs 5 lakh would be adequate. He is considering a few options:

  •     Buy separate health insurance plans for each of the family members
  •     Buy a family floater plan
  •     Buy a top-up plan

What should Kalpit do?

Buying separate health insurance policies for each individual family member would turn out to be quite expensive for him. For e.g. if he buys an individual policy of Rs 3 lakh for each of the five family members, he would have to pay a premium for total Rs 15 lakh sum insured. If the average premium for each policy is Rs 15000, he would have to pay Rs 75,000 towards premium.

A family floater plan would be more affordable. E.g. a family plan for Rs 7 lakh can adequately provide coverage to all or any of the members. But it would still turn out to be more expensive. 

Kalpit chose to go with a top-up plan. A top-up plan provides additional coverage to the existing health insurance at an affordable price. The cost of top-up plans is usually linked to the deductible. A deductible is a pre specified limit and only when the deductible is utilized towards a hospitalization, can the top-up be utilized. Therefore, the higher the deductible, the more affordable the policy. 


Case 2

To buy a new health insurance plan or enhance the existing policy?

Mr Manoj is a retired consultant. He has a family floater with his wife for a sum insured of Rs 4 lakh. Their ages are: Mr Manoj is 65 years old and his wife is 63 years old.

However, his current health insurance company has been increasing the premium owing to the increase in sum insured with a top-up plan. The current premium is Rs 20,000.

Mr Manoj is not sure if he should continue with the existing health insurance policy as it is quite expensive, or if he should buy a new policy. Both Mr and Mrs Manoj would need to undergo a cataract surgery in the coming few months. What should Mr Manoj do?

If he gives up the policy now, he would not be able to claim any amount for the cataract operations. Even if he immediately buys a new health insurance policy, it may have a waiting period clause and may not provide coverage until a few months to a year.

Although, he would be able to get a sum insured higher than Rs 4 lakh for a premium of Rs 20,000. 

At this point, his best option would be to continue with the existing plan, complete the cataract surgery procedures, claim the expenses for the operations and then switch to a new health insurance plan. 

Mr Manoj should also include a higher co-pay amount in the new policy so that the premium amount can be reduced. 

Another option for Mr. Manoj would be to buy an individual top-up plan, which would ensure continuity of coverage during the waiting period of the new policy. 

Premiums keep increasing with the age of the policyholders. It is advisable to increase the sum insured with age as healthcare needs increase with age. Reducing the sum insured should be avoided. 


Case 3

Family floater or separate senior citizens plan?

Rohan has a wife and a 1-year old son. He is planning on buying a family floater health insurance plan of Rs 10 lakh. He just got the news that his father is going to retire next year and would be provided with a government health insurance scheme of Rs 4 lakh. However, that scheme does not have any network hospitals in the town that they live in. This means, if his father ever has a health emergency, they would have to hospitalize him in another town.

What should Rohan do? Should he include his father in the family floater plan? Or should he buy a separate health insurance plan for senior citizens for his father?

Rohan should buy a family floater plan for his family and a separate plan for his father, as he is senior and his healthcare needs would be more compared to the rest of the family that is young. There are several benefits of doing so:

  •     The premium amount of the family floater would be low, as it won’t be based on his father’s age.
  •     Chances are that there won’t be any claims made on Rohan’s family floater plan, which means he can avail of no-claim bonus and gradually increase the sum insured.
  •     Insurance plans for older people usually have a lot of limitations such as waiting period, co-payment clauses and more. Rohan can avoid all those in the family floater.
  •     His father would have specific and more healthcare needs and he can buy a separate policy with sufficient sum insured for his father. 


Case 4

Maternity coverage and postnatal expenditure

Rajeev and his wife have a joint health insurance policy. The policy does not have maternity insurance. Rajeev’s wife is pregnant and he’s hoping to buy maternity insurance. However, the health insurance plan that they have has a waiting period of two years for claiming maternity expenses. This means buying maternity coverage at this point is going to be pointless for them. 

They are left with no choice but to spend out-of-pocket for the maternity and postnatal expenses. However, if they had planned in advance and bought a maternity plan much in advance, they would not have to face this challenge. The learning: buy health insurance much in advance of the time that you may anticipate its requirement. 


To sum it up

To see more about buying insurance plans online, check out this infographic.

Health insurance is a necessity. And as seen above, there are a lot of details to be considered, when buying a health plan or planning the family’s health insurance portfolio. If there’s one thing that the above cases teach, it is that health insurance, when chosen with care and consideration, can reap a lot of benefits in future, apart from providing financial protection. Have you decided what kind of health insurance plan you would buy?


FAQs: Health Insurance

What are the benefits of buying health insurance?

There are many benefits of buying health insurance:
· Comprehensive hospitalization coverage
· Financial protection in times of medical emergency
· Peace of mind and relief from financial worries
· Tax benefits
· Proof of health cover where mandatory
· Healthy financial plan

What are the different types of health insurance plans to choose from?

· Personal health insurance
· Family floater health plans
· Senior citizens health insurance plans
· Specific illness plans
· Top-up plans

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