Do I need additional private insurance in spite of my office insurance cover?
Interesting question. I pondered with the same question for over 2 years, did some research and here is my analysis.
How does health insurance business works? In simple terms- In health insurance, healthy people pay for unhealthy people. The question that I had to deal with was, if I am healthy why should I pay for unhealthy people? I wished to say “no” based on probability theory. If probability of me falling I’ll is less since I have healthy habits, why should I be victim of an Industry which is works on the same theory?
Well…little more experience showed. The probability theory works well with large numbers (central limit theorem- if I am allowed to use statistical term). But it is extremely unpredictable and even useless when we consider just 1-2 members of family.😟
What do I mean by this is even though I have healthy habits, with no diseases, can I be still healthy even during my old age? Answer is pathetic. “Unpredictable or I don’t know”.
So, it indicates there is unavoidable risk. Next question, how hard could be the impact of falling ill during old age? If we look at even average hospital charges, answer is obviously scary. Add detectability if you really want to calculate RPN (Risk Priority Number). Well what is detectability here? Bad health should be indicated in one of the routine health checks. Ok..if I detect something, I will buy insurance. Well…Insurance company increases premium in such situation or says no.
I had to conclude, health insurance is needed! More so, during old age!!
I assessed higher premiums associated with higher age. To give an indication, for 64 years old male with good health for 5 lakh, most insurance companies charge between 25 to 30K. That is 1/15th to 1/20th of the total sum insured. I calculated further, this is small amount compared to the risk of falling ill.
What it means is- Corporate health Insurance which ceases to exist when it is needed most. 😟
Ok…how about entering external health insurance after corporate life? Well…3 negatives.
- Health may deteriate resulting in increased premium or rejection.
- There is waiting period of 3-4 years😟
- Copayment starts with 20 to 30%😢
Now? Why not government companies like oriental or national? Premium is comparatively less. But this is offset by lot of sublimits they carry. I found it is not better choice compared to private insurance without sublimits. Add to this, their relatively poor service.
Hope, it helps to decide.