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Why is it Necessary to Review Your Health Insurance Coverage With the Rise of Lifestyle Diseases?

By Vikas Chandra Das
21 July 2022, 11:46 AM
why you should review your health insurance coverage

We live in a world where health risks are at an all-time high and healthcare costs are exorbitant.  Health insurance plans provide great relief during such unforeseen medical emergencies by covering medical expenses and hospitalization bills. 

However, it can sometimes fall short in meeting the total medical costs. This can be because we sometimes fail to keep the rising expenses of hospitalisation in mind. Thus, you should reassess your health insurance coverage from time to time. And increase the plan coverage whenever you feel the necessity so that you are optimally covered. 

This is why it is important to remember that buying health insurance is not a one-time job. It is equally important to review the coverage regularly to ensure your requirements are being met. 

Reasons Why Reviewing Your Health Insurance Portfolio Becomes Crucial? 

The main reasons to review medical plans on a regular basis are briefly explained below:  

1. Changes in lifestyle 

A lifestyle with less or no physical activity is a leading cause of medical and hospitalization expenses in today’s times. Our fast-paced lives, changes in the environment, and stress levels, etc. are also some of the reasons that have made us prone to lifestyle diseases. 

According to WHO, India had 50.8 million diabetics in 2018 which is expected to increase to 73.5 million by the year 2025. Ailments associated with smoking, drinking, and other lifestyle habits have increased the risk of lifestyle diseases in India. Some common lifestyle diseases are hypertension, obesity, type 2 diabetes, etc.
Similarly, the number of individuals afflicted with cardiovascular illnesses stood at 25 million in 2018 and the numbers are increasing steadily. 

The treatment for such lifestyle diseases are expensive. Therefore, reviewing your health insurance coverage periodically will help ensure that you are sufficiently covered at all times against the rising incidence of illnesses. 

2. Rising inflation in healthcare costs

Healthcare costs have witnessed a dramatic rise in recent times. According to a paper published by the National Bureau of Economic Research, the estimated cost of diabetes is USD 2.25 trillion while on respiratory diseases it is USD 1.17 trillion on the Indian economy during the period of 2012-2030. 
The total cost of non-communicable diseases in the Indian economy during the period 2012-30 is USD 6.16 trillion. 
This shows how expensive medical treatments have become. Thus, in order to cover for these exorbitant hospital bills, policyholders end up spending a huge chunk of money out of their pocket even after owning a functional health plan. Hence, it is crucial to keep a tab on the rising healthcare costs and adjust the coverage of the policy to factor in the increased expenses.

3. Newer products and their features

As most markets do, insurance markets witness newer and more beneficial insurance products being introduced on a regular basis. In fact, some insurance companies keep constantly revising their existing policy features to better suit the changing needs of the market and the customers. This is another reason to review your plan and to measure it against other available plans to determine if the current plan best suits your coverage requirements or not. 

4. Change in income

If there is a change in your income, you could review your plan to determine if the existing coverage can be increased to provide better financial security. 

5. Competitive pricing

This pointer complements a point mentioned above about newer health insurance coming into play. In such scenarios, you are bound to find more attractive medical plans that are more aligned to your coverage requirements while being more affordable. Reviewing your coverage requirements and what is being delivered by your existing plan will give good insights on whether to obtain better plans in the market or to just avail of enhanced coverage.

6. Addition or subtraction of new members

The addition of members by marriage, the birth of your child, or adopting children, adding parents under the same plan, etc., or subtraction due to death or other reasons will require you to go through the existing health insurance policy. This is done to ensure that all your family members are covered and a sufficient sum insured is accounted for.

7. In case of pandemic / infectious diseases: 

These are some important reasons why you should review your policy every year and opt for the best plans to suit your changing lifestyle. 

The benefit of regularly reviewing your medical policy

The major benefits of reviewing your health plans apart from being able to optimise your coverage are to save on premiums payable and to rise above the effect of rising medical inflation. Furthermore, reviewing health insurance policy is just as crucial as renewing to stay adequately covered at all times. This helps you to recognize the amount of security you need to handle any unforeseen emergency to your best possibility. 

How to Optimize Your Basic Coverage to Cover for Rising Medical Expenses? 

If you do regularly review your health plans and are looking to optimize your basic coverage, top-up and super top-up plans are the keys: 

1. Top-up Plans: A top-up health plan can act as a supplemental plan for your base policy. Top-up plans work on the principle of deductible limit. If any individual medical or hospitalization expense crosses the mentioned or the threshold deductible limit at the time of purchase, the top-up plan’s coverage kicks in. 

For example, if you have a base plan of INR 3 lakhs, you can opt for a top-up plan to increase your coverage. You can choose a sum insured of INR 10 lakhs and a deductible limit of INR 3 in the top-up plan. 
Now, for claims up to INR 3 lakhs, your base policy would cover the medical expenses. If, however, any claim crosses INR 3 lakhs then the top-up plan will cover the excess medical costs up to the top-up policy coverage.

2. Super Top-up Plans: Super top-up plans are similar to the aforementioned plans but these plans cover aggregate claims throughout the policy term over the threshold limit. So, while top-up plans consider every claim against the deductible, super top-up plans consider the total claims made in a policy year. This enhances their scope of coverage as well as the probability of health insurance claim settlement.

Final word- 

Life is full of uncertainties and changes and medical expenses and hospitalization charges are unavoidable. Therefore, it becomes essential that you review your existing health insurance coverage in the face of rising lifestyle diseases. Reviewing your coverage would ensure that you are optimally covered throughout your lifetime and you can easily meet the medical emergencies which might occur. 

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