4 MinsJan 15, 2021
Ramesh Thadani is looking for a suitable health insurance policy that will cover his senior citizen parents, wife and child. Since his father suffers from diabetes, Ramesh has to factor that in when he buys the plan. But most of the plans are either falling short of his expectations or have high premiums. How can Ramesh reduce his health insurance premium while ensuring that the coverage is adequate for his family?
Medical insurance is a necessity. It is possible to reduce the amount of premium paid for it. Ramesh can take some of the steps outlined below to save on his premium bills:
1. Opt for a family floater policy: A family floater policy allows Ramesh to include his wife and child in the insurance plan, thus eliminating the need to buy separate insurance plans for each one. He can save 10%-20% on his premium payment by opting for this. Additionally, he could consider buying a separate plan for his parents. While the premium will be higher than the one for himself, his spouse and child, both plans together may still work out more cost-effective than including his parents in the same plan, given their higher age. This is because in a family floater plan the premium is decided by the age of the older member.
2. Co-pay clause: A co-pay clause states that the insured person/people will pay a certain percentage of the claim amount on their own. The insurer will cover the rest of the amount. For example, if Ramesh opts for a 15% co-pay policy, then out of a total claim of Rs. 10 lakh, he will have to pay the first Rs. 1.5 lakh and the insurer will cover Rs. 8.5 lakh. There is also an option called voluntary co-pay clause. In this, the insured party can decide the amount they want to pay at the time of the settlement process.
The advantage of the co-pay is that since the sum assured, i.e. the amount that will be paid by the insurance company is lower, the premium you pay is also lower. The co-pay amount (that will be paid from the insured’s pocket) will kick in only if you are actually hospitalised and undergo treatment. Since premiums for senior citizens are usually high, the co-pay clause ensures that they are able to enjoy insurance coverage, even if the amount is limited.
3. Purchase a top-up policy: If Ramesh already has a health insurance policy from his employers, he can opt to purchase a top-up plan that will give him additional cover for one specific disease. Purchasing a top-up policy is at least 20% cheaper than buying a brand new one.
[Also Read: Six benefits of a family floater health insurance policy]
4. Purchase a super top-up: A super top-up policy is just like a top-up except that it covers multiple illnesses, hospitalizations and diseases. While it is not as cheap as a top-up policy, it is still less expensive than a brand new plan. This policy comes into effect only after your base policy has been exhausted. This is a good option for his senior citizen parents. He can buy a base policy with a low sum assured and a super top-up with a larger sum assured. The premium for the super top-up will be lower and the overall premium cost will be affordable.
5. Avail no-claim bonus: If Ramesh hasn't availed of any medical insurance claims in recent years, he would have accumulated a decent sized no-claims bonus. He can leverage this to reduce the premium he pays or increase his medical coverage. A smart ploy to ensure he avails of a no-claim bonus is not to make small claims.
6. Buy insurance policies for longer tenures: If Ramesh buys a cover for a longer tenures, like three years, he might be eligible for a discount in premium. Generally, this ranges between 10-15%.
Axis Bank has tie-ups with multiple health insurance companies including Aditya Birla, Digit and Tata AIG. Click here to check the plans and figure out your best options.
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