What to Consider When Buying Family Health Insurance

I am 32 years old, I am married and I have a 5 year old son. My monthly income is 70,000. I want to take out health insurance for my family. Please suggest

— Name masked on request

The first thing to do when buying health insurance is to opt for a sum insured of at least 10,000,000. This could be a floating family sum insured, so anyone in the family can use up to the total sum insured. If you have a family history of serious illness, you may consider increasing it.

I would recommend plans that have no room rent caps, no restrictions based on illness, no co-pays, and a high no-claims bonus. Prefer a plan with a low waiting period and an insurer that has a claims settlement rate of at least 85%. A plan with all these conditions would cost you approximately 20,000 per year.

I take out a home loan as a co-applicant and my mother as the landlord. She is a housewife. Is it possible to take out life insurance for both of us? As a co-borrower, if something bad happens to me or my mother, how will this insurance be applicable or useful?

—Name withheld upon request

The subscription of a mortgage and a life insurance is done independently. In life insurance, the coverage and the premium depend on the age and state of health of the applicant. If an individual does not win, the sum insured generally does not exceed 50 lakh. This sum insured approved by the insurer does not have to be equal to the amount of the home loan. Notwithstanding this, it is possible for both co-applicants to take out a life insurance policy.

Typically, the lending bank insists that the borrower’s term insurance be assigned to them. It guarantees that whenever the sum insured is paid, it would be paid into the bank.

In the case of term insurance, in the event of the death of the policyholder, the sum insured equal to the amount of the loan remaining due is retained by the bank and the remainder is paid to the agent.

Abhishek Bondia is Senior Director and Managing Director of SecureNow.in.

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