Queries

Vinod Kumar

What is the difference between health insurance products having lower premiums and their more expensive counterparts having similar features? Shouldn’t I technically opt for the lower premium one if everything else is the same?

Premium is just one of the factors to consider. The other two are product features and claims settlement rates. There are several product features that are marketed, but the two features I would single out for attention are the number of years for which pre-existing health conditions are excluded, and the caps on room rent. Claims settlement rates are available in the insurer’s public disclosures.

So, it is possible for an insurer to have long waiting periods and room rent caps, and then offer a low premium. That does not make it the best purchase. Ideally, the way to buy insurance is to create a shortlist of insurers that have over 85 per cent claims settlement rates; then pick the products that have not more than three years waiting period for pre-existing conditions and have no room rent restrictions. From this curated list, pick the one with the lowest premium options.

Kapil Mehta, Co-founder, SecureNow Insurance Broker Pvt. Ltd

Ashmita Singh

I have just started working and don’t know anything about finance. How should I go about investing?

In investing, just like in cricket, you have offence and defence. Before you start investing, you must put in place a good defence so that you have something to fall back on in times of difficulty. To start with, create an emergency fund to keep aside a few months of income, along with adequate insurance coverage for your needs. Once you have established this, you can move with the offence. It is very important to first understand the objectives and goals behind investing. That done, evaluate your personal risk appetite and time horizon. This will determine your asset allocation and how you should invest your portfolio.

Rishad Manekia, Founder and MD, Kairos Capital

Nitin Parekh

Accessing third-party websites and going through several forms/questionnaires for finding the right product is very cumbersome. Is there a way I can get easier access to finding the right product information?

Comparing products based on your needs is a key part of purchase. You can do this comparison yourself on the various digital platforms available, or you could reach out to an insurance broker and ask them for a comparison of the products. Both these approaches will give you a good outcome and a selection of insurance policies for you to choose from. As there is little difference in prices across intermediaries, that should not be considered a factor.

In deciding which approach to use when buying insurance, one should also think about claims. The person who sells insurance to you should also help you out on claims if it comes to that. So, if you are purchasing digitally, do make sure that the platform is one that is well- established and credible. Similarly, if you are working offline with a broker, then this should be someone referred to you or well-established.

Also, do note that the health insurance regulations are extremely policyholder friendly. This means that all health insurance policies meet a minimum quality standard that is very high. So, whichever route you choose, you are likely to get a good product.

Kapil Mehta, Co-founder, SecureNow Insurance Broker Pvt. Ltd