A health insurance policy has become a necessity given the times we live in. Health Insurance plans for familiescan come in handy during times of need.
But most Indian families are underinsured, which can prevent them from getting the coverage they may require. Nearly 70% of policyholders in India are underinsured, with the sum insured being under INR 10 lakhs, according to reports. This may not be enough to protect them in case of a major health crisis, making this a very worrisome trend. Let’s understand why most families remain underinsured and how health insurance experts say this issue can be overcome.
Why are most families underinsured
1. Underestimating healthcare costs
Most families underestimate healthcare costs. They seem to be unaware of the real-world costs of treating major illnesses. Medical inflation has been on the rise in the country. Healthcare costs have soared to unimaginable levels, with treatment for major illnesses costing more than just a few lakhs these days. What may have cost a few hundred rupees a few years ago now costs a few thousand at least. Many seem to be unaware of this, so they don’t review their policies and update them to match the needs of the times.
2. Lack of awareness
Many know that health insurance is important, so they buy one for the sake of it without much thought. Some may even get it just for the tax benefits it offers. But they are unaware of what the policy can do for them when a medical issue arises. They lack knowledge about sub-limits, exclusions, and waiting periods. These factors can have a huge impact on their medical bills, as the insurer will not foot the entire bill in large part due to them. This lack of awareness leads to underinsurance, wherein many may think they have enough coverage, but in reality, that coverage will only stretch so far. This will lead to unexpected out-of-pocket expenses, catching consumers off guard.
3. Opting for a lower sum insured
Many families keep their sum insured low to keep their premiums low. While this may seem like a good idea to keep the recurring expense of a yearly premium down, it can backfire when you need your health insurance the most. When there is a mismatch between the sum insured and medical inflation, your health insurance policy will lack teeth. This will hurt your financial health, despite having a health insurance plan in place.
4. Lack of review
Most people buy a health insurance plan and forget about it. But for anindividual health insurance plan or a family floater plan to be truly effective, it has to be reviewed and upgraded to keep up with the healthcare needs of the policyholder and the actual cost of meeting these healthcare needs. Medical inflation can eat away at a low sum insured as the years pass without an upgrade, leaving your family financially vulnerable during a medical crisis.
What the experts want you to know
1. Cheap policies come at a heavy price
Opting for a cheap policy with a low sum insured and premium may seem like the right thing to do, especially when your family doesn’t seem to be in any immediate danger. But health insurance experts warn that this thought process can land you in a lot of trouble down the line. Medical emergencies and accidents can happen to anyone at any time. An unfavourable diagnosis is just one test away. Medical inflation is also constantly inching up. Keeping these factors in mind when purchasing a health insurance plan can save consumers from a lot of unwanted stress.
2. Know your policy
Experts advise consumers to take the time to get to know their policy. Read the policy document carefully and know what you are entitled to and what is excluded as well. Be aware of sub-limits, deductions, co-pay, waiting periods, benefits, and the various coverages a policy can offer. Ideally, all this should be done before you purchase a policy. Compare policies and pick the ones that offer you the most coverage and protection.
3. Future-proof your health and wealth
The reality is that medical inflation is here to stay. Currently, it ranges anywhere between 12 and 15%. This figure will only go up in the future, experts warn. An Indian family that is underinsured today is only one step away from the debt trap in the future due to medical inflation. A good insurance plan with an adequate sum insured that can withstand the healthcare needs of the entire family can future-proof your health and wealth.
4. Top-up and super top-up plans
If you feel you are underinsured, a great way to increase your coverage is through top-up and super top-up plans. This can protect you and your loved ones against any unforeseen events that may eat away at your base cover.
Conclusion
Being underinsured leaves you underprepared to face a health crisis. It can add to your emotional and financial distress, especially during a time when your attention should be focused elsewhere. Take stock of your situation and address your health insurance needs accordingly to secure your future.