When you think of health insurance, what’s the first thing that comes to mind? Reimbursable hospital bills, yearly premiums, employee benefits, or just a heavily-worded paper that you don’t understand.In the simplest of terms, health insurance offers financial support in times of need. Much like any other insurance plan out there, it prepares you for the unforeseen and acts as a defense to whatever like throws at you.But, here’s the catch. No one thinks about health insurance as an indispensable investment. Car insurance is mandatory, life insurance you can’t go without, even fire insurance when it comes to your business, is something that always finds its way to the books.Not health insurance.Why? Because thinking about medical bills are not exactly a priority if you’re an average joe with some if not too many unhealthy habits. (I mean, what’s the worst that can happen?)Here is where you can go wrong. While other insurances are passive in nature, saving either your assets or your family, health insurance gives you active coverage by taking care of your medical bills in times of emergencies. It is essentially a safety net that protects your life and your savings from draining out in a hospital.So, today let’s look at why you should be looking at health insurance with a new perspective. (Trust me, it only gets better and better)
What is covered?
- The What, When, Why and How?
- Why is health insurance a key employee benefit?
- 5 reasons your business should offer health insurance today
- The Government Angle: Is it mandatory?
- Do you really need it?
Fact Check: India’s health insurance penetration is only at 3%The What, When, Why and How?Diving headfirst …
What is Health Insurance?
As per our beloved Wikipedia, “ Health insurance is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. ” But, you knew that already, didn’t you?So, let’s ask the real question – What are the medical expenses covered?Well, to be frank with you, the coverage changes from policy to policy providers. However, certain common elements can be found in most of them:
1. In-patient hospitalization
First and foremost come the most dreaded hospital bills, especially when you (or a family member) is admitted into the place. Whether your suffering from an injury or an illness, health insurance covers –
- Room rent
- ICU charges
- Doctor consultation
- Surgery expenses
- Nursing expenses
- Ancillary costs like diagnostic tools and materials
2. Pre-hospitalization expenses
No one gets admitted to the hospital on a whim. There is usually a whole process that needs to be undertaken, like consultations, medicines, and preliminary procedures along with some diagnostic tests. Luckily, a good health insurance plan covers them all.
3. Post-hospitalization expenses
Care and medicines still are required after a discharge. So, health insurance pays for them until a pre-specified period, which is more often than not until sustainable recovery.
4. Collateral expenses
Ambulance charges, daycare treatment and daily hospital allowance, are some of the costs that your health insurance plan is responsible for. A few policies also go a step further to add an income benefit.
When to Buy a Health Insurance?
Now I don’t want to scare you by saying that you should have bought health insurance yesterday. Although, now that you’re here, this would be a good time to start thinking about it.If you’re at the prime of your health and think that you probably don’t need one right now, let me tell you that you only need to be hospitalized once to cover your entire premium amount for five years.Comparison of healthcare costs in government and private hospitals:Avg. Expenditure - P: 31845 G: 4452Open Heart Surgery – P: 2.8 lakh G: 95000ICU – P: 30000 G: 1500Cancer Treatment – P: 93305 G: 22520Source: The Times Of IndiaThe advantage with starting early, apart from other things, is you’ll be paying less for more. Plus, most health insurance plans have an age limit, which you can outlive by tapping on the daycare treatments during the policy term.Additionally, some factors that are considered when determining the policy premium are –
- The insured sum
- Pre-existing medical conditions
- Any co-payment clauses
The physical well-being of an individual is gauged by putting these in a matrix and understanding the risk that the insurance company shall be undertaking.So, it shouldn’t come as a surprise that the healthier you are, the lower the premium and better the benefits.
Importance of Health Insurance
Coming down to the crux of the matter, health insurance is your failsafe against the unpredictability of life.If that sounds too philosophical to you then, think about how often you hear someone saying, “They were all good until now. Don’t know what happened suddenly.”Insurance gives you money to make the best treatment available for you and your family. But, a financial backup is not all that’s on offer. Here are five reasons you should pick up the phone and get health insurance right away.
1. Changing Lifestyle
Remember the time when work didn’t use to be hectic? Yeah, me neither. There is a wide range of illnesses and disorders that come with the hard and fast life that most of us are pushed into.Working out once a week is a dream that never comes true for some. While health insurance doesn’t motivate you to improve your eating habits, it does protect you should they cause any trouble later on.
2. The Never-Ending Bills
If the internet and TV bill wasn’t enough, you are now paying for OTT subscriptions, daily food orders and that game you don’t even play. Your medical expenses shouldn’t add on to an already stressful budget.Plus, with health insurance, you can keep your savings for everything on the bucket list.
3. Income Tax Benefit
No matter how much you love the Government or who you voted for, income tax always stings harder than it should. Luckily, health insurance premiums can be claimed as a deduction under section 80D of the Indian Income Tax Act.Get your numbers right, and you can essentially be looking at saving up to 75000 INR in taxable income.
4. Beats Inflation
Raise your hand if you trust that the inflation will only get worse from hereon. And if you do know that already then, why not invest in the right places to cover your bases?Health insurance acts as a vehicle to protect yourself from the increasing interest rates by taking care of requisite expenses in times of need.
5. It’s Affordable
A simple thought – if you can do it, then why not?
How to Buy Health Insurance?
The process is quite simple. You can either reach out to an agency or directly the insurer, and they shall help you with a list of policies that are available based on your specifications.When selecting the best plan for your needs, a set number of variables need to be considered.
- Sum Insured
- Cumulative Bonus (For claim-free years)
- Cost of each health check-up
- Minimum period of stay at the hospital
- Pre and post hospitalization coverage
- Cashless facility
- Critical illness add-on
- Additional income benefits and riders
Once you have all these in a line, make sure you look at the part most people miss out upon – The Exclusions.While pre-existing diseases form a natural part of the section, going in deeper to understand which illnesses, disorders and treatments are not covered shall save you a lot of trouble in the long run.
Why Is Health Insurance a Key Employee Benefit?
Group Health insurance has become quite the standard practice across all companies. Yes, there are flashier perks available like fitness centres, meditation programs and yoga retreats, but group health insurance for employees sits at the foundation of it all.In fact, one may not even remember a time when health insurance wasn’t a part of the whole package. The reason?Healthcare is really, really (really) expensive. Especially if you want any kind of quality with it. The Government spends a dismal 1,657 rupees per capita on public health, which hardly covers the consultation fees for a specialist.By investing in the employee wellbeing, an employer essentially finds themselves caring for them outside the professional boundaries. This inculcates a sense of belonging and confidence among the people who effectively run the company.A survey by Clutch found that over 55% of all employees valued health insurance in terms of job satisfaction.
5 Reasons Your Business Should Offer Health Insurance Today
Apart from standing true to the expectations of your employees, here are some answers to the question – “Why should I include health insurance in the pay package?”
1. Group health insurances are cheaper and better
Remember how you get discounts for buying in bulk? The same concept applies. Group health insurance is way more affordable than personal ones, going as far as including maternity health insurance benefits and covering pre-existing diseases.As the risk gets distributed among the pool, the average cost per employee falls down, giving higher advantages for lower outlays.
2. Healthier and happier employees
A study by MetLife found that 74% of employees have peace of mind at work, knowing the company was covering the insurance benefits. It essentially means they are able to shift their focus to work and ensure higher productivity.Let’s not forget the reduced absenteeism, thanks to the regular insurance-paid visits to the doctor.
3. Gives you a gold mine for recruitment
It goes without saying that a prospective hire would prefer a company that takes care of all his needs compared to the one that does not. With the right plan, you could lure in the top talent in the industry and distinguish yourself as a “people’s provider” in the market.Plus, with employee well-being at the core, your reputation shall make enough noise for everyone to listen.
4. Defines your company culture
Employee benefits are a gateway into understanding how much your value the people who work for you. By having the right set, you can build a conducive environment that encourages innovation, creativity and efficiency at all fronts.To add on to this, simple embellishments like group health insurance boost the morale, keeping everyone at their best at all times.
5. It’s simple
Get an insurance broker online and tell them what you need. All else is taken care of. Setting up an employee benefit doesn’t get any easier than this. The right advisor shall answer all your questions, consider your budget and offer the most suitable plan out there.On the other hand, if you like to dive deeper then, a breakdown of inclusions and exclusions is all you need to compare any and all insurance policies.
The Government Angle: Is it mandatory to provide health insurance to employees?
Like it or not, the Indian Government, in light of the COVID 19 pandemic, has made it mandatory for all employers who resumed functioning during the lockdown to provide medical insurance. This forms a part of order №40–3/2020-DM-I (A) issued on 15th April 2020.To further back this up, the Insurance Regulatory and Development Authority of India (IRDAI) came up with the guidelines asking standalone and general health insurers to offer comprehensive insurance plans at affordable costs to such organizations.The interesting part is that this direction applies not only to the current situation but the coming times as well. While there is no clarity about whether protection from COVID 19 is to be included, it certainly puts health insurance as the top priority for all companies.Given the move, it becomes more important than ever to find group insurance plans that cover the employees well without burning a hole in the pocket.
Do you really need it?
That depends on whether you’re an individual or a company …If you’re an individual looking to secure your present and future, then the answer is YES.And if you’re a company that wants to keep their employees happy and avoid any governmental defaults, then the answer is YES AGAIN!Yes, I do see the irony. And yes, you need to start working towards it right away.The good part is that with the right plan, you can see yourself leap-frogging into a better tomorrow that is already paid for. Do you provide health insurance for your employees? Contact us to know more.