RAGS TO RICHES | Covering That (Health) Coverage

I’ve been getting some feedback on Rags To Riches recently, and a theme that readers seem to notice is that most of my learning and ‘good financial decision making’ only show signs of having started recently. “For the most part of my adult life” is a phrase I use often, followed by whatever terrible financial planning mode I was on until that time. And honestly, that’s because until quite recently, much of my financial plan in life was to cross my fingers and hope for the best. 

My approach to health insurance planning was largely the same. I didn’t quite understand it and every time I thought about it, it felt expensive to start with. So far, I’ve been lucky. I’m a fairly healthy adult, but more than that - my dad served in the army. So as a single female dependent, I could be covered via the military on his insurance until quite recently (cue cries of female privilege here). But as I get along in the years, I realise that despite being single i.e. not married, I’m really reaching an age where even with all the patriarchal goodwill involved, I’m probably going to find it hard to stay covered under his insurance.

And so began the journey of getting my insurance shit sorted. But even before I got to the place of what policies were out there and which one would work best for me, there was the question of whether I truly needed it. 

Why Health Insurance:

Insurance of any kind is a form of risk management. In order to protect oneself from financial loss, we pay a fee to an insurer against which we are then assured that in the case of any loss or damage or sudden emergency, we will be compensated to some degree. 

In the case of health insurance, by having this in place you ensure that you are covered in the case of any unexpected medical emergency, sickness or injury.

I’m not going to lie, those annual premiums on health insurance do pinch a bit and I keep finding myself questioning if I actually need it. The last time I found myself having this debate internally, I came across this r/adulting thread that promptly convinced me to sign up for my plan for the next two years!

What Health Insurance:

It takes one Google search to know that the market is flooded with a ton of health insurance schemes provided by a ton of companies. Here’s how you figure which one works for you.

Step 1: Check if you get any kind of health coverage through work

If you’re full time employed, it’s likely that you get some health benefits through your workplace, but this isn’t necessary. So find out if you do have this and to what extent it covers you. Most corporate health policies have lower coverage amounts. It’s usually between 1-2L. Which is better than having nothing but it’s really not sufficient especially if you’re living in a city. If you get health insurance through work, do the research - know what sum you’re getting insured for, if it covers any dependents, does it cover any pre-existing diseases you might have. It’s good to know what you have, so that you can supplement accordingly.

Step 2: How much coverage do you need

If you’re living in a city, the recommended amount is 10L per person. If you’re not living in a city, between 5-10L is still recommended. 

In my case, I was looking for an individual policy. I didn’t need to include dependents since my parents and partner are covered by their respective insurances. I also don’t have kids - so there’s really no one else to look out for.

However, if you do have dependents that you need to insure through your policy, consider a family floater plan. This is a health insurance plan that extends to multiple members of the family under a single premium. So instead of buying separate policies for each person, which can be pricey - it’s a lot more economical to get into a floater plan and include the dependents you need to.

Once you know the amount you need to be insured for, then begins the journey of finding the perfect insurance fit for you.

Step 3: Finding the perfect policy AKA the research

It doesn’t matter when you’re getting health insurance, the younger you are the better - so no time like the present if you don’t already have a plan in place. 

Insurance is a business, that’s just the fact of it. And it’s a business that is betting on your good health and collecting that sweet premium without ever having to fork out a dime. Which means, the older you are and the more medically vulnerable you are - the harder and more expensive it is to find an insurance provider that will cover you. But this doesn’t mean that it is impossible. There are plenty of providers who cover a variety of pre-existing illnesses. It does take some research though.

I was introduced to Ditto during my search and they were really amazing. I had a lot of help finding a policy that worked for me, and they take over all of the ground work on getting you the policy. I also found their representative to be very patient and thorough with me through the entire process. If you feel like you need some help, they’re a pretty good bet to reach out to.

*Not a sponsored post

Something I was particular about during my search, was to check out the network of hospitals provided by different policies. The number of hospitals in a policy network can be in the tens of thousands, so obviously you don’t need to comb through this too finely. But if you know where you’re going to be in the foreseeable future, check out the general area to see what hospitals are covered by your policy. 

My current policy doesn’t cover any treatments where hospitalisation is not required - something I only found out after buying my policy and renewing it for two years this year. (joy!) But there are policies out there that do cover these, amongst other things like routine health check-ups, doctor consults for minor injuries and illnesses and medicine costs. Definitely something to keep in mind as I consider my next renewal.

How (to go about getting) Health Insurance:

So you’ve figured out a few good fits for your health insurance needs. Now what?

Step 4: Going about it all

My experience of getting my health insurance was fairly easy and straightforward. I found a plan I liked, filled out a form, made a payment and boom! I had health insurance.

I’m very aware that this is not a universal experience. A lot of people have a much harder time being approved for insurance. There’s a chance that the process may include a vetting call by an agent. In some cases, the insurance provider will require a medical check-up beforehand to supplement your application.

A lot of this makes sense in the broader picture, but in some cases the vetting call especially can feel intrusive and insensitive. If the experience is particularly sucky for you, you don’t need to go through with it. There are plenty of insurance fish in the sea. And a fish that already doesn’t care about your comfort, is probably not going to be a great provider in the time of a crisis. Step away and continue with your research. If you’re using Ditto, you could also speak to them and see if they have suggestions for providers who would work better for you.

This also holds true if you're rejected by a provider for any reason. There are more fish and you will find them eventually. 

The big no-no though, is making the mistake of omitting or creatively editing any required details on your insurance form. It may get you more easily accepted and it definitely means lower premiums. But if you’re found out to be somewhat fabricating during a claim process, you’re out the coverage window immediately. So you’ve lost all that premium payment so far and you’re not getting any insurance coverage either.

Once you’ve been accepted, you simply pay the premium amount online to the provider and congratulations, you now have health insurance.

Step 5: After Health Insurance, before chilling

So now that you finally have a health insurance policy to your name, there’s really not much else to do through the year (unless you end up needing to make a claim). But before you move into all that post adulting down time, here’s a tip to keep in mind. I’d imagine if I were in a health crisis, I’m not going to particularly be in the mood to talk everyone through the finer details of my current coverage. So to save yourself that round of scramble, it’s good to make sure that close family, friends, roommates - whoever is most likely to be around during a potential crisis, does know who and what your insurance covers.

And if like me, you want to be that annoying stickler for good planning, do a test run on a minor claim. It helps to just see how it all works. 

Truth.

Fringe Benefits:

No good Rags to Riches post about insurance would be complete without the cornerstone of any good financial decision making apparently - tax benefits!

Health insurance premiums are tax deductible up to a certain amount under section 80D. Really, what can’t this do!

Since I got my health insurance renewed for two years last year, I kind of regret it. It’s definitely nice not having to fork that money up this year, especially as we near tax season and I’m seeing those payments looming in my future. But my premium payment (for 2 years) went a little over the deductible limit (for one year) which means I get the full benefit this year, but nothing the year after. I would have liked to have gotten a tax benefit for the whole amount without that 2-3 grand that I missed out on. Meh, you can’t win ‘em all I guess and hopefully, now I know this for the future. Fingers crossed, I guess.

ENDNOTE AND DISCLAIMER

Rags to Riches is published for the ArtNowThus Blog and Newsletter.  Meant for creative professionals, freelancers, artists - anyone really who hasn’t yet quite figured it out and needs a place to start from scratch. 

All Rags to Riches articles are put together with the help of experts, and heavily aided by stories, puns, memes and examples - this is a finance blog you will actually want to read and (hopefully) put to use in your personal finance lives.

We’d like to establish that while the principles outlined in this section should pertain to anyone, we’ve put this together with a focus on creative professionals and freelance workers. Also, while we do have Husein and Sakina consulting with us on this column and keeping us straight, we’re not financial advisors. This column is for informational and recreational purposes only and in no way meant to offer advice or recommendations.