Home / Opinion / Don’t wait till you get to the hospital to buy medical cover

I met a colleague recently who’d been out for a week. Holiday, I asked with just the right note of envy in my voice. Nope, he said, medical emergency—mum had a stroke. And then he cracked up. All through the hospital stay, he said, he was replaying what I would keep telling him—get a medical cover. He said he meant to but kept putting it off. He was also banking on the workplace cover he thought covered him and his dependants. But he realised at the hospital that the company, in an austerity move, had reduced the cover to his nuclear family and chucked out his dependent parents from the group cover. He dipped into his savings, of course. But the thought that the entire expense running into several lakh rupees could have come out of a policy left him really upset. It’s like discovering you’ve forgotten your mobile charger just as you step into the aircraft for a week-long trip, he said. It’s that oh-shoot moment in your life.

One reason that a gold coin is so easy to buy and a medical insurance is not is accessibility and the lack of choice. A hallmarked gold coin is a hallmarked gold coin and you can buy it easily from several places. But medical cover is tough. The good intentions to buy a cover usually fall by the wayside as there is no easy way to answer two questions: how much do I need, and which policy should I buy.

Do you need medical cover? I always recommend buying your own policy even if you are covered by your office, specially if you are in your 40s. A double insurance cover from the offices of two working spouses when you are in your 30s does look enough. But 40s is the age when lifestyle-related diseases begin to set in and it is better to get your own cover before that happens. Also, with most private sector jobs not secure, you don’t want to be suddenly jobless and mediclaim less. So buy a cover even if your office covers you.

How much mediclaim to buy becomes a situational and personal choice according to what kind of medical services you want. The room rent in an upmarket South Delhi hospital is upwards of 10,000 a night. A less posh nursing home less than 1.5 km away costs one-fourth of that. So, depending on your preferences around look, feel and ambience, you should decide on how much you need. A base level of cover is 3-5 lakh (upper limit for metros and lower for the smaller towns) per person. For those who want the luxury of choice, top this up with a 10-15 lakh family floater.

Deciding on which policy to buy is the next hoop to jump through. There is no way an average mediclaim buyer will be able to read through more than 200 policies from about 21 companies. If you work with a certified financial planner, you will probably get good advice but for the rest of you, the daunting task of this choice and its implications make it easier to postpone. With this in mind, Mint has been working to develop a methodology-based mediclaim ranking. We worked with SecureNow Insurance Broker Pvt. Ltd and the list is now available online at mintmediclaimratings.

Although price is one of the most important factors in choosing a health cover, it is not the only criterion to choose. Equally important are features and fine print of the policies. If a policy does not have sub-limits on room rent, or disease-wise capping and has a great claims experience record, it will have a high rating.

Please take time to go through the package carefully. The policy on top of the heap may not be the policy that is the best for you. To see what works for you, go to the detailed rating calculations to see the weights that different parameters have got. For example, you may not be looking for a policy that covers pre-existing diseases—you may have none—and may want one that has a wait-period but a lower premium. Or, you may want a policy that scores high because it does not have sub-limits in the policy and you don’t mind paying the higher premium. As you use the Mint Mediclaim Ratings you may have suggestions on how to improve usability. Do write us a mail at mintmoney@livemint.com with your suggestions.

In the absence of an effective public health system that not only delivers good medical care, but also puts pressure on the private sector to keep costs low, your medical insurance choice is even more crucial than a good life cover. So go do it now.

Monika Halan works in the area of financial literacy and financial intermediation policy and is a certified financial planner. She is editor Mint Money, and Yale World Fellow 2011 and is on the board of FPSB India. She can be reached at expenseaccount@livemint.com

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