Things To Do After You Buy A Health Insurance

Hi there

Usually, we have health insurance and discuss how to get health insurance. In this article, we discuss things to do after you buy a health insurance plan.

1. Understand claim procedures

In the case of emergency hospitalization and in the case of planned hospitalization find out the documents and steps necessary to intimate the insurer. Copy this information from the insurer or TPA’s website onto a word processor, print it, and keep it along with the policy document and policy ID card.

2. Recognise that ‘cashless’ is not a right!

Health insurance comes with a right to claim reimbursement. However, cashless claims are more of a privilege than a right. It is quite possible that the insurer may either deny cashless or allow it partially and ask the insured to claim the rest of the expenses via reimbursement after the hospitalization is complete.

3. Prepare for the next premium

Even if you choose not to increase the cover each year, do not assume the premium will be the same next year. The premium could increase due to other reasons – age of individuals, the risk profile of the entire group covered by the group, underwriting test, and perhaps medical checkups too. Start an online recurring deposit that matures 6-8 weeks before the premium is due. If you are comfortable, you can choose to put money aside in a liquid fund for your insurance.

4. Understand the implications of sub-limits

There is nothing wrong with buying a policy with room-rent sub-limits. The only precaution is to ensure that the room-rent is always lower than that allowed by the sub-limit. This is because every kind of hospital fee (medicines, doctor fees, etc.) is linked to the room rent. So if you choose a room rent higher than that allowed by your policy, you will only be reimbursed (or paid via cashless) a portion of the hospital bill.

5. Recognize the impact of non-medical expenses

Hospitalization is not only about paying hospitalization fees! There is a huge list of non-medical expenses that any patient could incur. There are some administrative expenses, household expenses (while you are hospitalized), support staff expenses, and some expenses which get rejected in your insurance. Even if you believe that your health insurance cover is sufficient, these expenses have to be paid. This is where your emergency fund will come in handy. So ensure that you have one in place.

6. Health Cover for family members

If you are the earning member it is very crucial to have your own insurance but it is equally important to have health insurance for your family members, as any medical emergency for them would result in a financial setback for you and the entire family.

If the budget is a constraint you can consider taking up a family floater plan - watch our youtube video on this.
https://www.youtube.com/watch?v=F0JNvA5a_eQ&ab_channel=WealthCafeFinancial

Health Insurance could be considered as one of the trickiest insurances to buy as the health issues are very different for each person and then each insurance company has varied insurance needs. As a practice, do understand the various clauses of your insurance and have an emergency fund in place to be stress-free of any unforeseen health issues.

Disclaimer: - The articles are for information purposes only. Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. You must consult a financial advisor who understands your specific circumstances and situation before taking an investment decision.

To learn more - you can check our course - NM 102: Build a Safety Net. Use code SAVE20 for 20% off.

How to save Income-tax on Health Insurance

Owning health insurance covers your basic risk of health and secures your family. We have discussed in detail what are things to note while buying health insurance.

What's more, the premium paid for health insurance also provides a tax benefit by reducing your taxable income and thereby your tax liability. We are going to discuss the same here:

Deduction under section 80D of the Act

Premium paid for self, spouse and children

The premium paid towards health insurance policies qualifies for deduction under Section 80D of the Income Tax Act. The benefit is available to individuals on health insurance premium paid for self, spouse, children, and parents. Importantly, it does not matter whether the children or parents are dependent on you or not.

The quantum of tax benefit depends on the age of the individual who is medically insured.

You can claim a deduction of INR 25,000 for the premium paid for self, spouse, and children. If you and your spouse are of the age 60 and above, then you can claim a benefit of INR 30,000 for the premium paid.

Preventive Health Check-up

You can claim a deduction towards health check-ups too. It is included in the above limitations of INR 25,000 (or INR 30,000). Preventive health check-up of up to INR 5,000 is allowed.

Premium paid for parents

Premium paid for health insurance of parents/ guardians up to INR 25,000 is allowed. If they are above the age of 60, then you can claim a benefit of INR 50,000 for the premium paid.

Health checkup expenses for super senior citizens

Very Senior Citizens (who are above 80 years of age), can claim a deduction of up to Rs 50,000 incurred towards the medical expenditure, in case they don’t have health insurance.

Things to Note:

We have tabulated below the maximum health insurance and medical expenses you can claim under section 80D for the year ended 31 March 2019.

Health insurance premiums paid in cash will not be allowed as a deduction. It has to be paid from banking channels. A Health check-up of INR 5,000 can be paid in cash.
Premium paid for health insurance of your siblings is not allowed as a deduction.
*Nature of the amount spent on your senior citizens' parents and self-family can be towards medical expenditure as well.

To learn more - you can check our course - NM 102: Build a Safety Net. Use code SAVE20 for 20% off.