Buying the highest health cover available or making claims for every medical need are not always the best financial decisions

The only way to protect yourself from a financial disaster after a medical emergency is adequate medical insurance. Here are a few tips to cut back on the premium.

1. Buy a health plan from your bank

Public sector banks have co-branded health insurance products with usually public sector general insurers. These are exclusive and cheaper plans for their customers. For instance, while a `5 lakh Parivar mediclaim policy for a family of four from National Insurance, costs `17,972 annually, a similar family-floater Baroda Health Policy, a tie-up with National Insurance, will cost only `7,079 yearly. These plans are ideal for senior citizens, though one major shortcoming is that the maximum age of renewal is usually 80 years. Also, the maximum coverage you can get is `5 lakh. Since these are tie-up products, there is a risk of discontinuation of the plan, in which case you have the option to port the policy .

2. Buy a smaller cover and top it up

Don't buy the highest cover size available. The cheaper solution is to opt for a basic indemnity plan of say around `5 lakh and then add a super top-up health plan to it. So, while a `10 lakh indemnity cover for a 30-year old costs around `9,000 to `12,000 annually, a combination of a `5 lakh indemnity cover plus a `5 lakh super top-up costs just `6,500-7,000. Note that the deductible amount should never be higher than sum insured and you buy a `super' top-up not a regular one.

3. Separate cover for older members

Adding your parents to your family floater is a bad idea. Consider this: A `5 lakh family floater from Max Bupa which covers a nuclear family costs around `13,000. If you add your senior-citizen parents to this, the cost shoots up to `46,000. A difference of `33,000.A separate cover for parents costs `30,000. Not only there is a difference of `3,000 in the premium, a separate one for parents means the total cover size also increases to `10 lakh.

4. Cash for smaller needs

Comprehensive health plans will cover you head-to-toe but the costs are also exponentially high. For instance, a `5 lakh premium health plan with OPD benefits and other exclusive benefits will cost around `20,000, while a standard plan is available for `5,000.Plus you can always buy a health card to avail discounts. Since these plans offer preventive health check-ups as part of the product, the members are eligible for tax benefit of up to `5,000 under Section 80D.

5. Buy for a longer tenure, buy online

Enquire and ask for a discount before you pay the premium. Some offer discounts for buying online, others for sharing your purchase on your social networking site and then there are loyalty reward points that can be redeemed as discount on premium. The public sector general insurers offer discount to customers who buy online.

6. Mind the price escalation clause

Health insurance plans are annual contracts and, if their health insurance product portfolio is performing badly, the insurer has the right to appeal to the regulator, IRDA, for a revision of premium. Also, check how steep the price changes are as you cross an age slab.

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