Today, healthcare expenditure, not just in India, but around the world, is highly inflationary. Further, it is not negotiable or something that one wishes to compromise on.
Therefore, it is absolutely necessary to ensure that you are adequately prepared to meet medical needs. According to a survey by NSSO, 40 per cent of the people hospitalised have either had to borrow money or sell assets to cover their medical expenses, which again is rising at 16 per cent per annum.
Worldwide, health insurance is regarded as the most cost effective route to tackle healthcare expenses. An ideal health insurance solution offers comprehensive cover for all medical expenses incurred by an individual, be it day-to-day medical expenses (which include regular medicines and routine check-up costs), hospitalisation and surgery expenses or expenses to treat critical illnesses.
While there are many kinds of health insurance, a growing set of consumers in India are opting for plans that ensure a fixed sum of money for a specific illness, thereby allowing them to optimise their healthcare spends as per their needs. In addition, individuals can pay minimum amount of premium and buy a health insurance product that not only covers them but provides a cover for the entire family.
Today, treatment for cancer or organ transplants cost anywhere around Rs 5-10 lakh. The total cost not only includes medical and hospital expenses but also incidental expenses like travelling, lodging and temporary loss of income for an individual recuperating from the illness. In fact, incidental cost contributes at least 35 per cent of the total treatment. There are three kinds of medical expenses:
* Day-to-day medical expenses – which include regular medicines and routine check up costs. They generally do not impact an individual’s budget significantly.
* Hospitalisation and surgery expenses – which comprise of treatment of minor ailments.
* Expenses of treatment of critical illnesses – these include treatment costs, incidental costs and loss of income.
A health insurance plan should cover the widest possible range of the medical procedures for the longest possible term.
It should also cover the policyholder against all possible healthcare expenses. The customer should take into consideration his own lifestyle needs, with respect to the kind of hospital and the type of room he would prefer, while deciding the sum assured for a policy. Further a policy should entail upfront underwriting to ensure what one is covered for and what is not.
(Shikha Sharma Managing Director and CEO, ICICI Prudential Life)