The dos and don'ts of buying a mediclaim policy

Medical costs are skyrocketing. Hence the need for having a mediclaim policy for you and your dependents has grown. Suppose you need to undergo some medical treatment or need to be hospitalised for certain reason, then a mediclaim policy will be helpful to you in covering your medical expenses. The reason is mediclaim offers protection in case of unexpected medical emergencies.

Hospitalisation expenses in case of illness, disease or accident will impose a heavy financial burden on individuals and families. This is where your mediclaim policy comes in handy. It can reimburse your hospitalisation expenses or can pay the hospital charges directly on behalf of you.

A mediclaim policy provides a health cover of certain amount of money. This amount depends on the amount that the insured person was insured for.

It can be taken for an individual or for an entire family. Some insurance companies allow a discount on the premium if the policy is taken for a family.

Insurance companies have fixed some age limit for medical test. If the individual is below that age, then he or she need not undergo medical test for taking mediclaim policies. If the individual is above that age limit then he needs to go for medical test.

If any pre-existing disease has been found out in the medical test, then those diseases will not be covered under the mediclaim policy for a waiting period of a first few years.

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Ramalingam K, an MBA (Finance) and certified financial planner, is founder & director of Holistic Investment Planners (P) Ltd (http://holisticinvestment.in).

If you have a mediclaim policy from your employer, that may not be sufficient. Employer may cover the employee and not necessarily his entire family members. And moreover these policies are not portable and cannot be individualised if you leave the job. Employer-provided policies cannot be transferred to another employer in case you switch your job. Also employer-provided policies will give you coverage as long as you are employed. Once you retire you may not be having coverage.

It is really unfortunate that only after your retirement you need health insurance at the most. If you plan to take a fresh policy after retirement, insurance company will not cover the pre-existing diseases at that point in time. Though your employer provides a health insurance policy it is better for you to take a separate health insurance policy at least with a small amount of coverage.

The coverage amount of the health insurance policy need to be decided based on your health consciousness, your family health history, and the class of hospital you choose for treatments.

If you are not health conscious or you don't do regular exercises or you don't follow proper diet or you frequently take outside food or don't go for annual health check-ups then it is advisable to go for more sum insured coverage in your mediclaim policy.

If your family has got any adverse health history like heart disease, high blood pressure, stroke, diabetes, kidney disease, cancer, any form of paralysis, or any hereditary disorder then you need to choose higher coverage amount in your health insurance.

If you will be choosing high-class hospitals for your treatment then you need to go for higher sum assured. If you will be choosing medium level or low-level hospitals then you can choose the coverage amount accordingly.

Also you need to revise your health insurance coverage amount based on the changes in the above factors and the changes in the medical cost. Also the increase in the age needs to be considered for deciding the coverage amount.

The icing on the cake is you get tax benefit under section 80D for the mediclaim premium paid. For senior citizen the limit under this section is Rs 20,000 and for others it is Rs 15,000.

Most people don't think about health insurance very often. But it comes to mind first when a loved one is sick. Mediclaim policy is one of those things everyone knows he or she should take but usually puts off until a more opportune time. Living without a mediclaim policy is like going out on a rainy day without an umbrella or a raincoat.

If you have not covered adequately yourself and your dependents with mediclaim policy so far, then now is the right time to take action. The fact that you are reading this article shows you have decided to stop procrastinating, delaying and have answered the ancient question, 'If not now, when? with 'Now'.