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How will you deal with Health Expenses after Retirement?

As time is in your stride, you can invest more in equities like ULIP, mutual funds, etc. to generate high returns

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Representational Image. Flickr

September 28, 2016: Try and recall the fondest memories of the first job you had. Yes, that job when you were in your twenties and was eager to impress the boss for even a small paycheque or promotion. And the minute the salary would get transferred to your bank account? That night was a little splurge— be it on your friends, family or a romantic date. Before you come out of the memories of that wonderful time, think for a moment about how much you managed to save then.

Undeniably, saving for the future had not been on your list when you landed your first job. Saving for health insurance that would be helpful after retirement is a farsighted thought for most of the people.

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Age-related diseases and rise in medical expenses

One may not realise it during the young time, but as we grow old, our body becomes more susceptible to ailments. No matter how healthy and fit we are today, our body is bound to age with time, and our health will eventually start deteriorating. The medical expenses of a 60-year old would be much higher than that of a 25-year old.

Above this, medical costs are undeniably going to escalate manifold with the passage of time, and the advancement in medical fields may make some medical treatment out of your coverage.  

One would need to have sufficient funds stocked up for health issues which might arise after retirement, along with a reliable health insurance plan for the retirement.

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Two ways to combat high medical expenses after retirement:

Buy health insurance: Though, your health expenses may be negligible today, it is important to buy health insurance now to combat with medical expenses that may arise after retirement. Needless to say, do not forget to factor in your spouse’s medical requirements while picking your policy. Further, you should start investing in a health insurance policy as early as possible because if you put it off to the later date, the more premium you would have to pay. Also, most of the insurers insist on medical tests if the insurance applicant is above 40 years of age. Further, you might be getting corporate health insurance but the same may cease to exist post retirement or when you leave your current job.

Build an emergency corpus: Every individual should build a health corpus along with a mediclaim policy. The corpus should be used only when the insurance coverage is insufficient. Also, there are various such medical expenses which are usually not covered by most of the health insurers in India. To take an example, most of the health insurance policies do not cover dental treatment. Therefore, to make sure that you or your spouse is not caught off-guard during your golden years, it is imperative to build a retirement corpus.

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Irrespective of how young you are, the sooner you start to build, the better it is for you. You can start with smaller proportions of your money, as you have sufficient time to accumulate your wealth. Further, the savings that lie in the retirement fund will also earn interest for you, thanks to the power of compounding. For instance, if you start saving Rs 2500 every month for the next 30 years, you will be able to get Rs 54.28 lakhs if we consider the rate of return as 10%.    

As time is in your stride, you can invest more in equities like ULIP, mutual funds, etc. to generate high returns. You can also park a small portion of your money in debt instruments like bank fixed deposits, post office schemes, PPF, etc. to get fixed returns.

To answer the question of how much you would need to save for your retirement, consider the current scenario of expenses and inflation impact. A monthly expense of Rs 5,000 will become Rs 11,836 in the next ten years if we consider the inflation rate as 9%. In this example, we have kept the inflation rate intact for the coming ten years. So, you can easily assume what would be the scenario if the inflation rate also rises.

The Bottom line

It is highly recommended to buy a health insurance policy as medical costs are skyrocketing. Even if you are above 40 or 50, there are various mediclaim policies available for you. Though, it might be costly to buy a health insurance at a later date, not taking insurance is even worse. A single visit to a doctor can wipe out your years of savings. What may seem like a decent corpus may become inadequate after a single admittance in the hospital. So, don’t scrimp on your health insurance policy, and back it up with your savings.

  • Antara

    Cost-cutting and keeping a check in expenses after retirement is quite an issue! Informative article indeed!

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How to Find the Right Health Insurance Online

Despite the convenience, finding the right health insurance plan is not easy. There are a few deciding factors, which you should keep in before you finalise a plan

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Health Insurance Policy. Image Source: www.business2community.com

Health insurance is not an option anymore. It has become a must-have thing.

The government takes regular initiatives to encourage people to have health insurance by introducing welfare schemes, the latest being the Ayushman Bharat Yojana (ABY)in 2018. Under this plan, the central government will be providing health insurance with a cover of Rs. 5 lakh annually to 50 crore people of the country. However, this scheme is specially for low income groups.

The average middle class who can afford to buy insurance must have a health plan because you don’t want to end up yourself in financial burden in case of medical emergencies. And what’s better option than a comprehensive health insurance plan?

How to get a pocket-friendly right health plan?

You can take advantage of online services offered by the insurance companies and insurance aggregator portals like RenewBuy, OneInsure, Probus Insurance, Policybazaar, and others to find the right plan.

Get a health insurance plan online

But, first, you need to answer these questions:

  • Whether you want to buy a Health plan for an Individual or family
  • How much coverage you want in a plan

Once you have answered these basic questions, you can visit either the official website of insurance companies or insurance aggregators like PolicyBoss, RenewBuy, Probus Insurance, Turtlemint, Ask Arvi, etc.  

If you want to take real advantage of online services and explore a plethora of health plans offered by various insurance companies, visit the website of any of the insurance aggregator like Probus Insurance and compare health plans.

Compare health insurance plans online

Comparing health insurance is easy and totally free of cost. You get to see various health insurance plans and premium quotes provided by top-notch health insurers in India.

Despite the convenience, finding the right health insurance plan is not easy. There are a few deciding factors, which you should keep in before you finalise a plan.

Health insurance
Other factors you can also check for is Network Hospitals, Sub-limits, Co-pay, etc.

Points to keep in mind when comparing health plans

A) Health plan coverage

Check what it covers, inclusions, type of treatments, cost of hospitalisation, etc. You need to find out what each health insurance plan includes.

Check for the medical expenses covered for:

  1. In-patient hospitalization
  2. Pre-hospitalization
  3. Post-hospitalization
  4. Daycare

These are a few of the basic coverages a health plan covers. However, each insurance company may offer different coverage scheme. So, you must compare each plan coverage.

B) Compare room rent

A room rent decides the amount you will get at the time of claim in case of medical emergencies. All the expenses for medical treatments are based on the room rent. Check if there is a cap on room rent limit.

C) Check for a waiting period

A waiting period implies a duration up to which you have to wait before a claim is accepted. This is not applicable under emergency hospitalisation. Generally, a plan will have a waiting period of 30 days. However, for pre-existing diseases, it differs. It is essential to check the waiting period.

D)  Exclusions

Check the exclusions, as mentioned in each of the plans in insurance policies. It is better to know the exclusions before purchasing.

E) Premiums

Premium is the amount one pays to keep a health insurance plan in force. A cheap plan does not mean a bad plan. And a higher premium does not guarantee you a better service.

How to get a pocket-friendly right health plan? Find it out here. Pixabay

Look for a pocket-friendly plan, but also check the claim settlement ratio to know the post-sales and support provided by the insurance company.

F) Claim Incurred Ratio

Check incurred settlement ratio of each health insurer you have shortlisted. It can act as a critical factor before you buy a plan. Because you want that insurance company to support you when needed.

Other factors you can also check for is Network Hospitals, Sub-limits, Co-pay, etc.

Also Read- Top 5 Compelling Benefits of Implementing Employee Management Software in your Business Workplace

Finding the best health insurance plan is not an easy task. But comparing health plans online on web-portals like Policybazaar, Probus Insurance, ETInsure, make things simple and convenient. With the help of a few guide pointers as discussed above and comparing health plans, you can get the right health insurance plan online with no hassle.

Author: Sumit Asrani

Sumit Asrani is a Mumbai based writer. His blood cells are woven with Hypergraphia, as he breathes in books, he exhales words and sneezes poetry on Instagram. Captivated by the web-of-words, he’s trying to escape miraculously by weaving words on insurance space, digital marketing, and creativity.