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Non Life Insurance - Smart ways to save money on health insurance

17 Sep 2013

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Health insurance has become a must today, particularly in view of the rapidly-rising healthcare costs. However, a large number of people still prefer to go without health insurance as they assume they can’t afford it. That may be true in some cases, but not always as there are ways to lower your health insurance bill. Thus, if you are looking for a cheaper solution, here are some ways to save on health insurance:

1. Employer’s insurance The best way to save on the cost of health insurance is to use the plan that is provided through your employer. No need to say that if you are covered under health insurance provided by your employer, there is nothing like that as that usually comes free. Even if you are charged something by your employer for the health cover provided to you, that must be cheaper than individual or private plans. In most cases, group health insurance also covers the dependents of employees, like spouse and children. Therefore, if you are covered under a group health insurance policy, consider yourself lucky, and if you don’t have one, just persuade your employer to get you and your dependents covered under a group health plan. This way you can save on the premium.

2. Start early There are various benefits for buying a health cover at a young age. Therefore, you should try to start as early as possible because health insurance premium tends to increase with age -- the more the age, the higher the premium. In fact, insurance at younger ages is affordable and the health conditions of young persons make them eligible to buy health insurance. However, "as age progresses, more and more persons from the insured group are likely to fall sick and the health-related expenses also increase. The cost of insurance at advanced ages is prohibitive and the eligibility to purchase insurance sharply declines. One may also not be eligible for the insurance cover at that time," informs Ramesh Saxena, a Delhi-based financial planner. Therefore, opting for a health cover at a younger age can considerably save on the premium.

3. Shop around for lower-cost solutions Cheaper insurance polices needn’t necessarily be good also. However, if cost is your prime criteria of choosing a policy, then instead of opting for any policy which comes your way, a better way out is to shop around for a policy with the least premium without compromising on the sum insured. "Always compare the various products in the market and for this the Internet would be the best option. There are various sites in the online space offering detailed information on the covers offered by various insurance companies, which will enable you to choose a suitable policy," says Ajay Bimbhet, managing director, Royal Sundaram Alliance Insurance Company Ltd.
4. Take basic hospitalisation cover If you can’t afford specialized health insurance, at least try to take a basic hospitalisation cover which will function as the security blanket for your family against treatment of any sudden illness or injury. Since basic covers cost less, you can save some money on their premiums. "The coverage, however, should take into consideration the healthcare costs in your city/town. Normally, a sum insured of Rs 2 or 3 lakh would be required. If the customer chooses to, he/she can take a higher cover also, depending on his/her needs," says Bimbhet.

5. Go for a top-up cover If you are already covered by your employer or have your individual health insurance, but are looking for a higher sum insured, you need not take an additional policy. What you can do is to take a top up cover, which will give you that extra cover that you require with considerable savings on the premium. You can do this for taking a critical illness cover also. For instance, if you have taken a basic hospitalisation cover, you can top it up with a speciality catastrophe cover whenever the need arises. Since the people who are middle-aged or are in a higher age bracket have more chances of life-threatening or major ailments which have expensive treatments, a critical illness cover need to be taken only for them. If you take a critical illness cover for a further Rs 2 to Rs 3 lakh, the premium will not be as high as a hospitalisation cover. So you can achieve savings while not compromising on the coverage.

6. Go for a floater policy You should try to go in for a floater family policy instead of an individual health plan. "A family floater cover usually ensures coverage for a family of four members (maximum) consisting of self, spouse, dependant children and dependant parents under a single premium. The sum insured will be also available jointly for all the insured persons of the family covered in this single policy. This will help you save money on the premium," says Bimbhet.

7. Ensure cumulative bonus If you ensure the timely renewal of your claim-free health policy, you can get a cumulative bonus (extra sum insured) by paying the same premium. However, if you go for a fresh coverage for this amount, you will be required to pay an extra premium. For instance, if you keep your policy of Rs 1 lakh claim-free and continuously renewed, you can even get a Rs 1.5-lakh coverage for the same premium.

8. Take separate cover for your parents Normally, in a family floater coverage, the premium is calculated on the age of the eldest person. So in case you include your parents under the same health policy, you might be paying more. Therefore, "take a separate policy for your parents. This can also help you achieve savings," says Saxena.

9. Inculcate healthy habits You can save substantially on healthcare expenses or health insurance just by giving up your bad habits and becoming healthier. To take an example, losing weight or quitting smoking will not only reduce the number of visits to the doctor, but can also dramatically cut health cover costs. For instance, insurers usually give rebate to people who have never been hospitalised or who don’t smoke.