"50 Lakh?"
My jaw dropped, as I looked at the Hospital bill, I couldn't feel my legs, sweat trickled from body parts that weren't porous. I felt a sense of dread; how on Earth will I manage that amount, will I have to let go of all my dreams?
Fortunately for me, as it turned out, I was having a nightmare, but this nightmare led me on a quest - a quest to find a solution to the problem that the entire middle class will face, if not today, tomorrow - What is the appropriate amount to insure oneself for, and how does one afford it?
Conventional wisdom dictates that a standard mediclaim cover for ₹ 5 Lakh rupees, with benefits like OPD, Maternity, Sum Insured restoration, should be appropriate in times of need.
But, answer me this - God forbid there's a hospitalization in the family, and you are not insured, would a ₹ 5 Lakh expenditure leave a financial dent in your lifestyle, that you won't be able to recover from?
Now, let's flip the question - Would your lifestyle be able to sustain a blow of ₹ 50 Lakh? Would you be able to get back to your normal lifestyle in 10, or for that matter 20 years? What assets would you need to sell? What dreams will you compromise?
Understanding the difference between these two questions can help you understand how risk coverage works.
And if you think your medical bills wouldn't inflate to that outrageous amount, I recommend a simple Google search for bill amounts of hospitalizations like Cancer, Heart Attack, Organ Transplant. Hospitalization bills for advanced treatments like robotic surgery, stem cell treatment can also cost you a fortune. Why just these, imagine the fact that we have been struggling with a pandemic for two years now, without a visible end in sight. If epidemiologist reports are to be believed, the nature and severity of such pandemics would keep getting worse. As medical science tries to play catch up with adversities perpetrated by Mother Nature, medical resources will keep thinning and costs will keep rising.
It is unfortunate that despite being a nation that is known for pioneering novel practices on multiple lines of education, today we can barely classify as financially literate. We largely do not understand or ignore the concept of risk - as the common saying goes "Tragedy will always strike thy neighbor, I will manage to escape scath free". We need to be cajoled and coaxed into securing our own future - we need government exemption on mediclaim, we need term plans that have an inbuilt cover that will guarantee a return at the end of a certain period, we need it all.
What is the solution you ask? The Super Top up policy, without bashing an eyelid, I tell you.
The Super Top-up policy has been one of the finest products designed in mediclaim history. The basic concept is - you are your own insurer for the base Sum Insured. The Insurer is not concerned with any claims that you incur till a particular Sum Insured, known as the Threshold in technical parlance. It is only when you cross this Threshold, your Super Top-up policy kicks in.
In India, while the rich have money, poor have social security schemes run by the Government, the middle class now has Super Top up Health policy.
The best part is, the product is not limited to inpidual usage. Employers can design a Group Super Top-up Health Insurance in such a way that their Employees aren't left lurking in the dark in times when they look at the Employer to shoulder some support.
Most Employers normally cover Employees for a Sum Insured of 5 Lakh and a Corporate Buffer of about 10 Lakh, accumulating the total cover to around ₹ 15 Lakh per Employee. The Employer can get an additional Group Super Top-up for a Sum Insured of ₹ 50 Lakh with a Threshold of 15 Lakh. This will ensure that the cumulative coverage for each Employee is ₹ 50 Lakh - ₹ 5 Lakh from the base Group Health Policy, ₹ 10 Lakh from the Corporate Buffer and the balance from the Group Super Top policy.
Would you believe me if I told you such a Group Super Top-up policy can cost you as little as ₹ 500 per Employee?
That is how incremental risk works. Leverage it to your advantage. Get yourself a Super Top up product, with a Sum Insured of ₹ 50 Lakh and a suitable Threshold. The price, I assure you will be less than what you spend on a weekend family dinner.
At Ethika, we have been helping SMEs and Retail Customers understand and place risks.