A Health Insurance is a must today. Every individual and family must be protected against the very probable risks to our health. The recent pandemic did a lot to push this awareness to everyone. 

However, selecting a health insurance plan is not as easy. With a mature health insurance market today in India, the choices are aplenty. While this is a good thing, choosing the most suitable product and features is not easy and we run the risk of loosing ourselves in jargons and the long list of features. The health insurance decision entails a good amount of understanding and consideration of our needs and our budget /affordability for the same. In this article, we will attempt to lay down the path for this decision-making.

1. Understanding your needs: 

The first step towards buying a suitable health insurance plan is a proper analysis and assessment of our requirements. The first questions usually are - who all are to be covered? What amount of cover do you need? Are there any specific health risks you wish to cover? What is existing health insurance cover?. These are just the primary questions which will set the broad parameters of the kind of health cover you need - like individual policy or family floater, cover for parents, critical illness cover, top-up or super top-up plans and the extent of the cover desired. With this clarify, next you need to decide on the type and the extent of your health coverage. For this, you must take into account the age, medical history, pre-existing illnesses, if any, etc. before finalising the sum insured and plan. 

2. Research the Insurers

You would not likely buy anything from someone who you do not trust. And buying a health insurance policy is a very critical decision that can have ramifications after many years. So, before you actually look out for the cheapest policy available with the most comprehensive cover, it is advisable to zero down on a list of preferred insurers. It is important to compare the various health insurance providers and understand few things, including the claim settlement ratios, the ease of the claim process, the network of cashless hospitals, customer support and their customer reviews /feedback in general. 

3. Check Policy Benefits

With the insurers shortlisted, the next step would be to check out and compare the policies of these preferred insurers. A health insurance policy has many benefits and features which we have discussed here in the past. Important among these are - the scope of cover for pre- and post-hospitalisation expenses, pre-existing diseases, consumables cover, OPD cover, maternity & newborn cover, ambulance expenses, room rent limits, network of cashless hospitals, deductibles, ​​restoration benefits, critical illness cover, AYUSH treatments and so on. You must also consider the relevant add-on covers to make your health insurance policy more comprehensive. 

While all features, benefits and add-on covers may look appealing, they may come at an additional cost. So, you need to strike a balance between the features and add-ons and the premium that you can afford. You will have to decide on what features are must-have and which can be considered as optional which you can skip in order to balance the equation.

4. Making the decision

With clarity on the type of insurance, the preferred insurers, the features and benefits required and the premium amounts for short-listed policies - you have all the ingredients ready for the decision-making. The next steps would be filling out the proposal forms and undergoing medicals, if any required. Remember that this too is a critical step and one should be honest in disclosing all facts to the insurers. We do not want a situation where any misrepresentation or hidden fact comes to light and becomes the reason for claim rejection in future. If you have any serious existing ailments, please consult your insurance advisor to guide you on the matter before you start searching for a policy. This is why we always say that it's better to not delay buying any insurance and the best time would be when you are young and healthy. 

Conclusion: 

Buying a health insurance is an important decision in life. Even after buying your health cover, it is important that you revisit your insurance portfolio every few years and plug any gaps that you see. It may happen that a policy bought five years ago looks inadequate today with high inflation in medical expenses and your improved and changed lifestyle. Whether you are buying health insurance for the first time or buying additional covers, a thorough assessment of needs and the products is required. Here is where your insurance advisor can be of great help in guiding you and helping you may the right decision. If you haven’t spoken with your insurance advisor on this for long, perhaps now is the right time to invite him/her for a cup of tea. 

Congratulations, You made the right decision to buy insurance. Now for the hard part.

Buying insurance is not an easy, straightforward process, Irrespective of the type of insurance. Be it health or life insurance or any other type of insurance, today, there are multiple insurers to chose from and also multiple choices of products available. Even this is just one side of the story. There are other things critical before and during the insurance buying process. In this piece, we will deep dive into this process and explore some important elements of insurance buying.

For the sake of convenience, let us break up the insurance buying process into the following 4 steps.

1. Need Assessment

2. Product Selection

3. Application Process /Proposal

4. Post Purchase

Let us now explore these points in detail.

1. Need Assessment:

The starting point for any insurance purchase is obviously deciding what type of insurance is needed. A comprehensive need assessment to holistically assess your insurance needs should be done regularly, perhaps once every couple of years at least. Need assessment would mostly cover personal risk areas and related solutions like health, life, personal accident and critical illness insurance. Beyond this, covers like motor, home, fire & marine, shopkeepers insurance, professional liability /indemnity, etc, and even Covid-19 related policies may be explored on a case of case basis. For this article, we will limit our scope to the personal insurance covers only.

Buying any personal insurance product depends on a lot of factors like your age, your life stage, number of dependents, existing covers, etc. After a product is decided, the next important question is how much cover you should have and the term of the cover? This again will depend on your earnings, lifestyle, the number of dependents, probability of risk, metro/non-metro city, etc. Needless to say, the higher cover taken at an early age, where medical issues are yet to arise, is highly recommended.

2. Product Selection

With multiple insurers and products, all with different features again is not easy. The right product selection is very crucial, and you will need to go into details to clearly understand the product features and even policy wordings. One important element here is to ensure that the premium fits in your pocket for the required cover. So an optimal balance may be required here. Another choice here is that of riders. Obviously, riders do offer some advantages but may not be always preferred and excessive riders are not required. Stand-alone products, like say critical illness, “may” offer better coverage and features rather than having them only as a rider. To sum up, with the product, the cover, premium amount, premium paying term, policy term and riders /add-ons will be decided at this stage.

3. Application Process:

The insurance buying process normally starts with the quote generation by your insurance advisor which will have the short-listed products. Upon selection of the product with cover, the proposer will be guided to a proposal form. The proposal form is the most important and basic document required for the insurance contract between the policyholder and the insurance company. It includes the insured's basic information like address, age, name, education, occupation etc. It also includes the person's health status and medical history.

The proposal form helps the insurance company to calculate all the potential risks in relation to the insurance policy and hence deciding the premium amount. Needless to say, this has to the filled in as per the principle of ‘Utmost Good Faith’, which we would like to briefly cover here. After submission of the proposal form and payment of the premium, the process will end for you except in cases where the medical test, from an emplaned doctor with the insurer, is required. After this, the proposal is received by the insurer who is free to review the details and either accept or reject the proposal. Based on the information disclosed, a ‘medical underwriting’ may also be done by the insurer.

4. Post Purchase.

After the insurer is satisfied with the details required, the policy will be issued. You are expected to keep all the policy documents safely and handy at your end. Today, insurance policies are also being saved in digital format in your E-Insurance Account, which may be applied for /disclosed during proposal form filing. It is important to check that the details of the policy, including all personal details and disclosures, is accurate to avoid any issue in future. Once you receive the policy document in hard copy, please check all the key details properly. In case of life and health/PA policies do check the medical history, occupation, etc is captured correctly as you have declared. For vehicle insurance, you must check the registration number, fuel type and claim history. In case you find any discrepancy, please contact your adviser to make the required corrections in the policies. If everything is in place, the process of insurance purchase ends here.

An important point to note here is that policyholders get a ‘free look-in period’. If for any reason you feel that the policy terms & conditions are unacceptable or there was any mistake in buying the policy, the policy may be returned. A refund will then be processed, less any expenses and proportionate risk premium for the period used.

In brief:

Identifying your insurance needs, deciding the appropriate cover and term and closing on the right, the suitable product is easier said than done. We would strongly recommend that the readers approach their insurance advisors for the right guidance. Please note that, unlike investments, buying insurance is a long-term contract that can have serious consequences when an unwelcome event happens. You may not buy another policy of similar nature for at least a few years, if not more, and thus, it becomes even more critical that the right decision is made, something you don’t regret later. To kick-start the new financial year in the right spirit, we would urge everyone to undertake a holistic need assessment with their insurance advisor. We wish you a safe, healthy and prosperous new financial year.

It was cold, windy evening of January 2012. Mr. & Mrs Arora (retired couple, both senior citizens) were enjoying winter evening & having a cup of hot coffee in their 3 BHK luxurious apartment in South Delhi when they received a phone call. Next 15 days were one of the worst period they experienced in their lives. Their son, Mr. Akash Arora in his late 20's met with a severe accident while driving a car on his way back to Delhi from Chandigarh due to intense fog. He incurred multiple fractures and was in hospital for 15 days. Fortunately he survived and recovered fully after 15 days of hospitalization, but the total medical bill made Aroras poorer by Rs.7 lakhs. Unfortunately Akash had medical cover of only Rs.3 lakhs assuming this would be sufficient for him at a young age of 27.

As Aroras belong to higher income group and have created wealth over the years, additional Rs.4 lakhs which they had to pay from their own pockets did not pinch them much but not all of us belong to that category. Can such type of incidence happen to any of us ? Are we in a position of bear cost of high hospitalization/medical bills on our own ?

You may argue that this can be an exceptional event and may not happen in everyone's life. But can we predict which family will suffer this trauma and which one will escape ? Another point worth highlighting here is lifestyle related health problems. In today's fast paced life when every one of us is a part of the 'rat race' and all of us want to win that race, we are leaving healthy living habits behind. Eating junk food, irregularity in eating habits, high pressured work culture resulting in incidences like heart attack at a young age or diabetics or blood pressure problems. These have become very common in India now.

Unfortunately in India we mostly realize importance of medical insurance only when something of this sort happen either to us or to our near & dear ones. Why to leave things to destiny when you can cover the risk through medical insurance, popularly known as mediclaim.

Understanding the Basic Traits of Health Insurance:
Health insurance is a contract between insurance company (insurer) and insuree who takes insurance coverage against any medical emergency by paying a specified price (called premium) depending on multiple factors. Health insurance is nothing but passing risk of bearing medical cost to insurance company against the premium paid.

So medical insurance is nothing but passing risk/cost of medical treatment to insurance company by paying premium. So in event of any medical treatment, your insurance company will pay you to the extent of insurance cover against the premium paid by you.

We believe in Vasudhaiva Kutumbakam, the old Sanskrit phrase meaning the world is one family. The technological advancements of the 21st century have truly made this true. We are living in a very interconnected world. Every place and every person is today well connected to each other, digitally and even physically with linkages to the remotest places on the earth. All this time we enjoyed this connectivity, accessibility, the interdependency of business and all the comforts of the modern world. However, we are now shocked and quick to realise the perishability of this new world.

The past decade has seen nature responding back to the unadulterated infiltration on it. We have seen the impacts of climate change manifest itself in many forms. Millions are being already impacted and signs are there that things will only worsen in the coming decades. Just in the past few months, we have seen earthquakes, cyclones, deadly fires and of course the world-changing pandemic. Needless to say, Covid-19 is a game-changer for everyone. It will change how we work, socialise and perhaps also respect nature. One industry has been at the forefront at helping people manage the risk emanating from uncertainty and it is insurance. While there are many forms of insurance which help different stakeholders to manage risks, we limit our focus to only personal insurance in our discussion.

At a personal level, we are concerned only with the direct risks faced by us. Covid-19 has surely made people realise the importance of having adequate health insurance. However, health is just one part of our vulnerability as humans. Let us first fully understand these vulnerabilities or risks of our lives in the form of 3 deadly Ds.

• Death

• Disease

• Disability

The above 3 D’s are pretty obvious and any common person can imagine the impact of any one of them happening on our lives. Death, especially of any earning member in a family is disastrous in all manners, financially the most. 'Disease' is something which has perhaps become very common today given the lifestyle and food habits we are following today. And without adequate support from the government to the middle and the aspirational class of the population, getting quality treatment is getting damn expensive. But what if you survive any unfortunate incident but … Disability has huge ramifications on our lives which many of us haven’t visualised. It may severely hamper our earning ability for life and add to ongoing medical costs. Have we accounted for them?

To this shortlist, we can do well to further add another two Ds – Damages and Dependency. Damages would mean damages/losses to movable or immovable properties or assets. This can be your home, shop, factory, godowns, vehicle, crops, cattle and so on. Again very self-explanatory. They are prone to human acts, accidents and also acts of the ‘god’ or natural calamities, which are getting a bit common now.

Dependency is a new word for many but perhaps the only one on the list which is almost certain and very worrying. Dependency comes from the risk of being alone and/or from longevity or living longer. It is something which we cannot really buy an ‘insurance’ against. The idea of being dependent on others for care and treatment and even for living our daily lives may be frightening for many of us today. The dynamics of the modern world and how a modern nuclear family chooses to live, in contrast to our previous generation, is something we will have to think about. Now imagine doing so without adequate resources or wealth at your disposal. That puts us in a precarious position. Perhaps the Covid-19 may have a positive impact on the same. If earning opportunities are available closer to home, many immigrants would prefer to work from home or closer to home. We will have to wait and see. But the safest way out of it to create a sizable, retirement corpus. That would be also enough for the rest of your life at a retirement home of your choice if needed.

So where are we today? We have only made ourselves more vulnerable in this modern world. We haven’t evolved as humans. All our technological advancements in all fields lay worthless as an unknown enemy made the most evolved and most powerful species, us, realise our weakness and vulnerability. It is not the end of the world though, and we will survive and we will again prosper. However, things will not be the same again. What we need to do is to do a recheck and value the most important thing in our lives - our health, both physical and mental. We need to take care of it. Financial protection in the form of insurance is no longer in a debate. Having adequate life, health, personal accident and critical illness insurance should be your next ‘To Do’ task. There are enough digital ways of buying the same at the comfort of your home. Just call your insurance advisor for a comprehensive review of your insurance portfolio. It's high time you do it.