Renewing a health insurance plan is more important than a buying a new plan because of several reasons. Always make sure the health insurance plan is up to the mark. If you don’t care for the health insurance plan or increase the sum assured if necessary, you would be in deep trouble on a costly hospitalization.
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Here are the top 10 reasons to review your health insurance portfolio.
1. Increase in Liabilities: Your total loan obligations were Rs 4 Lakhs about five years ago. Now, your loan obligations have gone up to Rs 8 Lakhs. If you fall prey to a critical illness, your current health insurance plan may not be enough. You must review health insurance needs and increase sum assured to prevent savings from being wiped out.
2. Increase in Income: People may restrict health cover due to income constraints. Make sure to increase health insurance cover when you get a hike in salary. Let’s say your monthly salary was Rs 25,000 at the age of 25 and it’s Rs 40,000 at the age of 32. You can afford higher cover in your health insurance plan. As you grow older, health-related problems rise and higher cover is a great idea.
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3. Increase in Wealth: Let’s assume you had assets worth Rs 30 Lakhs when you were 30 and now you are 50 and have assets worth Rs 1 Crore. As you have earned a significant amount of wealth over the last 20 years, you are now financially sound and can look after medical expenses yourself and also those of your dependents. What you must do is just renew your health insurance plan.
4. Inflation: Inflation is the rise in prices of goods and services with time. As inflation especially medical inflation rises, the need for more health insurance is high. Let’s say you had a health insurance cover of Rs 2 Lakhs in 2015. This amount is not sufficient to manage medical expenses in 2019. The health cover must be increased with rising medical expenses.
5. Life Stages: Life and health insurance needs vary across individuals. When you have kids, you must avail a family floater health insurance plan. This plan covers the entire family and makes sure costly hospitalization doesn’t affect the budget.
6. Time-Specific Financial Goals: You will be able to achieve time-specific financial goals, if you review the portfolio of health insurance. Make sure health insurance is in sync with financial goals.
7. Lifestyle Changes: Health insurance must be revised according to your lifestyle. When people earn more, they tend to enjoy a healthy lifestyle. A person leading a healthy lifestyle must have higher health cover than a normal person. Make sure health insurance plans are in-line with lifestyle changes.
8. Marriage: If you are newly married, get spouse covered under the health insurance plan. Let’s say you have an individual health insurance plan. After marriage, you must get your wife under a family floater health insurance plan. Take the help of a financial advisor to select the right health insurance plan.
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9. Divorce: The cover may be reduced for divorcees who are single and have no dependents. For divorcees with dependents (parents or kids), the same cover may be retained or hiked if necessary.
10. Recent Offers: Health insurance companies are continuously revising their offers to entice more customers. Keep an eye on the recent offers to upgrade or revise or change your health insurance portfolio.
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