You have bought health insurance and are paying regular premiums on it. You think your job is done and you are prepared for any medical emergency. Presently, you have no health condition by God’s grace. But do you think this health cover will be sufficient after 5 years? Buying health insurance is not a one-time thing. It needs to be periodically reviewed and if necessary, upgraded as well. With passing age, there would be a sea-change in your life priorities. Depending on how life is treating you and how you are treating life, health insurance requirement would vary at every phase of life. Let us examine these situations:
Increase in Age: It is a no-brainer that with progress in age, the probability of falling ill is high. Medical cost would be the one expense which you may steadily spend on in the later years. So, the health cover bought originally is likely to be insufficient to cover the medical bills. Further, if any critical health condition is diagnosed at a later stage, upgradation can prove to be very expensive or can be even denied by the insurance company. Your health cover thus needs to steadily increase in tandem with your age.
Rise in no. of financial dependants: When you are single and working with no financial dependants, health insurance would not be a big priority for you. Maybe, your employer cover would be adequate. But as you grow older, a bigger family with more dependants would necessitate a higher independant health cover. Your spouse and later your children would require to be adequately covered. Further, your parents who would be ageing might require a bigger cover. You need to also take into consideration their past medical history. It is prudent to buy a family floater policy covering your spouse and a separate senior citizen cover for your parents.
Inflation: Health care cost is rising on an average by 8-10 per cent p.a., as per media reports. Today, even a 24 hour hospitalisation can easily wipe out a minimum Rs.1 lakh from your savings. Few years down the line, your existing health cover could be too low to cover even 1 hospital bill. Your sum assured thus needs to increase in line with inflation to meet your long-term health care needs.
Change in career profile: Your health insurance cover also depends upon the type of profession you are in. For instance,
Your job may involve health hazards like for instance working in a chemical factory or frequent travel.
If the nature of your job involves transfer like in PSU companies, then you need to bear in mind that health care treatment in a metro would be expensive compared to semi-urban areas. Your health cover in such cases could prove short of the actual hospitalisation bill.
If you are an entrepreneur, with no regular source of income and inadequate health cover, any serious medical emergency in the family could throw your finances out of gear and even disrupt your business plans.
If you have serious plans to retire early, inadequate health cover can create a huge dent in your retirement savings.
It is thus prudent to assess your health insurance requirement as per your profession and future career plans.
Just like your review your investment portfolio at regular intervals, you need to assess your health insurance requirement at different life stages. Review your life cover at least every 3 years or in the event of a change in family/ career situation and upgrade the cover, if necessary. You can also consider to create a personal medical fund after you cross 45. Consider it as a long -term investment for your retirement period which would supplement your health insurance and avoid a dent in your retirement savings. You can utilise the health cover first and then rely on the medical fund, if necessary. Upgrading your health insurance and your personal medical fund will help you to tide over circumstances that compel you to meet sudden and huge medical bills and the financial stress that comes along with it.