Family’s Health

The World Health Organization marks April 7 as World Health Day. The WHO’s primary goal is to achieve universal health coverage for all anybody, regardless of their age, income, or pre-existing health condition, should be able to avail medical treatment and hospitalisation without financial difficulties.
While universal health coverage exists in some countries, in India, it remains a pipe dream. With the launch of the Pradhan Mantri Jan Arogya Yojana, the poorest 10 crore families in India now have a coverage of Rs 5 lakh per annum. This is a good start. However, anybody not eligible to receive benefits under this scheme must seek their own coverage.

Treatment of a critical illness

Healthcare inflation in India is steep. In 2018, it rose at double the inflation rate. Hospitalisation, or treatment of a critical illness such as cancer, may be required by any person at any moment. The costs of such treatments can easily run into lakhs of rupees, and deplete a family’s savings. This is why every member of a family needs insurance. Let’s take a quick look at some must-have insurance products.
In any health emergency, your health insurance policy is your first line of defence. Which is why it’s important to be adequately insured. While there’s now a law mandating the purchase of health insurance, I would say paying for health coverage is as important as paying your rent. Unfortunately, in India, the health insurance penetration is abysmal.
As per a National Family Health Survey in 2018, only 29% households had at least one member covered by a health scheme. Only 20% women and 23% men between the ages of 15-49 were covered. A single hospitalisation could wreak havoc on the finances of the other 71% households. Health insurance is affordable. If you’re a 30-year-old looking for a cover of Rs 5 lakh, you can get one for annual premiums starting around Rs 5800.

Looking at health insurance

However, many people make the mistake of looking at health insurance only as a tax-saving product. Even a basic health insurance policy can protect you against the steep costs of hospitalisation or treatment of critical illnesses. Beyond basic coverage, a health policy can also cover pre and post hospitalisation expenses, daycare treatment, maternity expenses, and annual health check-ups. You could also cover your entire family under a single, family floater cover or a group insurance cover.

The key is to get one while you’re young. The older you are without health coverage, the more expensive and difficult it becomes to buy a policy. Your base coverage can also be exponentially expand with the addition of a top-up or super top-up policy. For a few thousand rupees, your base cover of Rs5 lakh can potentially become a Rs 20-30 lakh cover with a top-up.

While there are plenty of other life insurance products available in the market; so only a term plan offers a pure insurance solution of adequate coverage at affordable costs. For example, a 30-year-old male can avail a life cover of Rs1 crore for a term of 30 years for annual premiums starting from around Rs7000. This way, the term plan can replace a person’s income for the foreseeable future.
The ideal level of coverage should be 10-20 times your current annual income. In case of untimely death, this coverage would keep your family from financial distress. It’s also a more cost-effective way of buying a life cover, than other insurance products that may also offer combined investment benefits.