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News & Views


Monday, Nov 7, 2016

Is corporate health insurance enough to cover your family?

   [Source : The Economic Times]

Varun is 40. His is a family of four— his mother, wife and son. Lately, his friends have been discussing health insurance, but Varun is not particularly interested. He thinks he is sufficiently covered by his corporate health policy, which provides a total coverage of Rs 2 lakh. He was allowed one dependent and chose his mother, given her age. Is a cover of Rs 2 lakh adequate for a family of four, including a senior, or should Varun revisit his health insurance needs?

Varun is clearly under-insured. His employer-sponsored cover has stagnated and has not been revised. Unfortunately, he doesn’t realise this, and continues to believe that he is well-insured on the health front. But what about coverage for his wife and son? As he grows older, a bigger family, more dependents, rising healthcare costs and longevity will necessitate a reconsideration of his family’s health insurance coverage. He must avoid the circumstances that compel him to meet sudden out-of-pocket expenditures during medical exigencies, and the unnecessary stress that comes with it.

The amount and kind of health cover he needs depends on various parameters, such as Varun’s health condition and his family’s medical history. Moreover, the environment he lives or works in must be considered to account for any health harazds. The prevailing cost of medical treatment in the city may also vary significantly. His cover should be much higher if he lives in a metro. More importantly, a sum assured that seemed sufficient six years ago may be inadequate now. Similarly, over the next few years, healthcare costs may climb higher. So, it is advisable to factor in inflation before deciding. Further, Varun’s preference in terms of hospitals and his income must be considered to decide on the right amount of coverage.

Hospitalisation play a pivotal role in ensuring the health of all family members, from newborns to the elderly. Therefore, it is extremely important that Varun reviews his health cover, at least every three years, or in the event of a change in his family’s situation. Upgrading health insurance in tandem with age, affordability, changing needs and medical inflation is absolutely critical.

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