Health insurance cost hurting your finances? Here are 5 ways you can make it cost-effective
Introduction
We all know that having a health insurance plan is essential, especially when we are witnessing medical inflation. However, to get a health plan with a wide scope of coverage, you also have to pay a hefty premium. This makes people opt for inadequate coverage and then find themselves in a financial quandary when medical bills pile up. But do you know that with a little research and some smart manoeuvring, you can make significant savings on your medical insurance policy? Well, we have compiled 5 not-so-well-known tips for reducing your health insurance premiums, and that too from the comfort of your couch.
Top 5 ways to save money on health insurance policy online
1. Shop around and compare plans: When purchasing or renewing your health insurance policy, you should first shop around for plans. With multiple health insurance options to choose from, compare the plans online offered by different insurance companies on the basis of coverage, cost, benefits, inclusions and exclusions, network hospitals, etc. This will help you find the best deal that perfectly meets your needs and budget. When you purchase it from an agent, you have to pay a commission, which can be saved when you buy the policy online.
Most insurance companies have an online health insurance premium calculator which will calculate the premium of a plan based on the coverage details provided. You can compare the quotes of different plans and choose the one that is easy on your pocket. Comparison of medical insurance plans is easier and more efficient than doing it offline.
2. Start early: One of the important factors that determine health insurance premiums is your age. If you invest in health insurance at an early age with few or no health issues, the premium will be low as compared to somebody who buys a health plan after the age of 40. The reason is simple. Young people are less likely to fall sick or have any chronic health conditions, and hence, the probability of raising claims is also low. They are considered low-risk category. During renewal, the hike in premium will also be marginal. But, as you age, the premium increases because of the increased risk of illnesses and infections. So, when you opt for a medical insurance policy when age and good health are on your side, you can save a considerable amount of money on the premium.
3. Maintain a healthy lifestyle: You get rewarded for staying healthy. And how? Well, when you maintain a healthy lifestyle with a balanced diet, exercise, good sleep, and stress management, you have a very low chance of being diagnosed with lifestyle diseases, such as diabetes, hypertension, heart disease, obesity, etc. When you are healthy and don’t raise any claims, the insurer generally doesn’t increase the premium. Similarly, if you give up on bad habits like smoking or alcohol consumption, it will not only help maintain a healthy lifestyle but also cut down the cost of health insurance to some extent. On the other hand, a person who needs regular medical attention because of a poor lifestyle will be charged a higher premium.
Some insurers have fitness tracking apps which will track your fitness habits for a few months, like jogging or walking 10,000 steps (this can vary from insurer to insurer), and reward you with a discount on your premium for your efforts to stay fit and healthy.
4. Go for a basic plan: If affordability is a concern, go for a basic health cover. There are many affordable plans with comprehensive coverage. The basic plans will cost you less and provide financial security against medical emergencies. But make sure the plan has at least Rs 2 – 3 lakh sum insured, depending on the cost of healthcare in your city.
5. Avail tax benefits: Whether you pay the premium for an individual healthcare plan, a family floater, or a health insurance policy for senior citizens, you can avail of tax rebates. As per section 80D of the Income Tax Act, you can save up to Rs 25,000 for paying health insurance premiums for yourself, your spouse, and dependent children. This limit is applicable to people below the age of 60. If the primary policyholder is aged above 60, the maximum deduction that he/she can claim is Rs 50,000. Again, if you are paying the health insurance premium of your senior citizen parents, you can claim an additional tax rebate of up to Rs 50,000 (i.e., Rs 25,000 for yourself + Rs 50,000 for parents aged more than 60). Claim this deduction while filing your tax returns and save big on health insurance costs.
More ways to save health insurance premium
Apart from the top 5 ways mentioned above, here are some more options to save on health insurance costs —
- Multi-year plans: When you buy multi-year health insurance, say for 2 or more years, insurers generally give a discount of 10-15%, depending on the policy tenure. If it’s a 2-year policy, the discount can be up to 10%, and for a 3-year plan, you can earn a discount of up to 15%. But remember, you have to pay the premium of the multi-year plan in one shot.
- No-Claim Bonus: If you have not filed any claims in a policy year, the insurance provider will reward you with a no-claim bonus (NCB). The NCB can be a discount on the premium or increase in the sum insured at no extra cost. The discount can go up to 50% if you don’t raise any claim for 5 consecutive years.
- Co-payment: Opting for a voluntary co-payment can reduce your premium amount.
- Go for Family floater instead of individual health insurance: Family floater plans are cost-effective compared to buying separate policies for each family member because you have to pay a single premium.
Conclusion
Health insurance is the need of the hour, considering the ever-rising healthcare expenses. It provides financial security and peace of mind in case of hospitalisation due to an emergency or planned treatment. However, there are still many people who do not feel the need to invest in health insurance, assuming all healthcare plans are costly. The good news is there are many ways to save money on the premium, as mentioned above. So, cost should not be an excuse for not buying medical insurance.
Invest in a plan that suits your needs and, most importantly, your budget. An affordable plan will not only secure your finances and well-being but also ensure that you are able to renew it on time and keep it active. The above tips will help you save money on premiums without compromising the scope of coverage.
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.