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We just moved to a new city and the first thing I did – albeit subconsciously – was to mentally mark the location of nearby hospitals and clinics as I would see them while driving or walking past. Just to be prepared for any emergency. We all wish that the worst never happens but we need to be prepared in case it does. In this “be prepared” mode, having adequate health insurance is the critical component. Therein lies the hitch, knowing how to choose one that will serve you well and is adequate. Here are the parameters you can refer to when you are choosing the right health insurance.

1. Determining the adequate cover

The inevitable question is how much medical insurance is “adequate”. There is no simple answer to this as a lot depends on individual factors. We are not yet in a position to be able to predict future illnesses, but a quick guide is to figure out which hospital you would like to go to in case you fall sick and then check out what a heart bypass costs. Plan to have medical cover for that amount at least. 

2. Personal medical history

Another way of figuring out what your medical insurance cover should be is to take into account your age, family history of medical problems and lifestyle which is a major contributing factor to your health. So if your father is a diabetic with heart problems or your mother has blood pressure or your grandmother suffered from renal failure you must factor these details into the amount of medical cover you are planning for. Typically, health insurance companies ask for this information in advance and full disclosure should be in order to ensure that you are avoiding any issue for yourself in the future. 

3. Different coverage with age

By and large, insurance gurus suggest that an adult (above 21) should have at least a cover of ₹ 10 lakh when you are in your 20s and keep going up as you grow older. And yes, you need medical insurance even if you are in your 20s. Last month I was out for a lovely weekend break with my family. It ended in a small disaster though when my daughter chipped one of her permanent teeth. Getting that tooth reconstructed cost us quite a bit and it came with follow-up costs as the dentist “discovered” few painless cavities. Proving again that one cannot predict when medical emergencies, big or small, will occur. 

Also, when you are younger you are in better health and premiums are cheaper. As we get older and with lifestyle illnesses, these can affect not just our health but premiums as well. 

4. Coverage changes with family status

When your family status changes, with marriage you can opt for family floater policies where one policy covers both spouses. The kind of family floater you opt for can change as your family grows. However, as your children grow, it makes money sense to get individual policies because the premium depends on the age of the oldest family member. For this same reason, if your parents are dependent on you, you should take individual policies for them rather than including them in the family floater policy. 

It is important to have an individual cover irrespective of having a family floater as well. If a woman has no individual policy and only a floater with her husband it could spell trouble if things got rocky in the marriage.  Irrespective of your relationship status buying individual health insurance is highly recommended. 

5. Pick the insurance according to your purse

Another rule of thumb to remember is to keep your basic policy at ₹ 10lakh. The bottom line, however, is to figure out what you can afford. You need to take a hard look at your earnings and spending habits and figure out how much you can afford to pay as premium. Remember, the health insurance policy is not an investment tool or a means of saving income tax. While you may feel you are never going to need it, medical insurance has a very real purpose, to provide your health care without throwing your life into financial jeopardy.

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