How to Reduce the Cost of Your Health Insurance ?
Written on Friday, October 21, 2016
By Team Bajaj Capital
According to a report published by The Hindu (April'2016), 85.9% people in rural and 82% people in urban India don't have health insurance.
It has been analyzed that majority of people take a health insurance policy, only to avail tax benefits under the section 80D of Income Tax Act. (http://economictimes.indiatimes.com/). As per the 80D section, a tax payer can claim a deduction up-to Rs 25, 000 by having a health insurance for self, spouse and kids.(Senior citizen can claim deduction up-to Rs. 30, 000)
Tax deduction through a health insurance policy is certainly an encouragment that motivates many to have a health insurance policy. One should take a policy based on the need analysis only. The insurance cover amount for an individual depends on various factors like age, medical history, parents medical history etc. But unfortunately, in India, usually people don't go for need assessment. That is why most of the people are under insured in India.
How to Reduce the Cost of Medical Insurance
If you want to take a medical insurance policy, then you can avail it at a reduced cost by splitting the policy into base cover and top-ups rather than taking a total cover.
How Splitting Insurance Policy Helps?
(Source: Economic Times)
You Save Rs 2800
Likewise, the cost of base cover for Rs 15 lac will be around Rs 9,500, But if you split it into base cover and top-up cover, then the cost will be around Rs 7,000.
If you already have a medical insurance issued by your employer, then get a need assessment done to check if the insurance cover is sufficient or not. If you are under insured, then for the remaining insurance cover, go for top-up cover.
For example, a 30 years old man living in a metro city requires a medical insurance of 10 Lac. But if his employer is providing him the base cover of 5 Lac, then for the remaining 5 Lac the person should take a Top-up insurance cover and not a normal base cover.