Hi ,
In the previous article , I had mentioned about sharing my responses on some queries which I received last week. I am sharing on this platform as they might be useful to all .
I had received a query on whether to take a medical/health insurance over and above company cover. Yes, It is important to take a health insurance over and above company insurance .
According to me , one should have a health insurance and critical illness cover in their kitty.The size of the cover will primarily depend on the individual , their medical history , the family’s medical history and lifestyle . There are some generic ways of calculating required cover , but depending on your medical history , you may look at taking additional cover accordingly .
Also important is cover for parents . Its a general observation that medical insurance for senior citizen parents comes with a very high premium and many conditions. When I take up financial planning for my clients, I ask them to set aside a goal exclusively for creation of medical contingency fund , which can be withdrawable at any point of time when required, does not depend on any approval from insurance company , can be used for any of the parents and not specific to one. Insurance can be sought if the surplus we have falls short of other critical goals . In such case , though at a higher premium , medical insurance is at our rescue.
There are different ways of deciding the cover required for Health Insurance .
1. Premium affordability method : Where you check for 2% of your annual income as the premium affordable . In that premium range you should check what sum assured you can get . So if the income is 20 lakhs ,
Step 1: 2% of 20 lakhs is Rs 40000.
Step 2: Check for how much cover comes in Rs 40000 .
Step 3 : For the current scenario , deduct the cover provided by company from Sum assured arrived in step 2 .
Step 4 : Purchase Insurance for bridging this gap. When you leave the current company and new company gives a lower cover , can take a top up then.
2. Second method is sum assured as a % of income . 50% of income should be good enough to go .
3.Size of the cover can be : 50% on income + 100% of last 5 years expenses on health / hospitalisation .
Critical illness is again an important requirement these days . I was checking on a few policies available , and below is a useful link on that . I also verified the ICICI crisis cover as mentioned in below news article , which covers 35 critical illnesses .
Some more useful links on difference between health plan and mediclaim are mentioned below. Please feel free to refer.
http://www.livemint.com/Leisure/H4BBeZbIjvLsBjlrGyhTGM/Health-plan-or-mediclaim.html
Please feel free to write back , if you have some thoughts to share and if you need additional information. I shall research and get back .
Best Regards
Deepa
deepanittala@gmail.com
image source : medindia.net
Deepa Nittala 