Getting your insurance right

Term insurance

For term insurance, you will have a much lower premium today which stays the same throughout your life time (as long as you keep renewing).

Premium goes up by Age, so best to do early

A lot of companies will try to sell you ULIP plans which are a mix of term + you get something if you don’t die at the end – but those tend to be super expensive.

Keep insurance and investment separate.

You should get a critical illness cover with your term insurance.

For eg. ICICI Pru life has a good plan for Term insurance.

1. Get 2x for accidental (optional add-on)
2. Get 20-40L out on critical illnesses (like cancer if you get diagnosed)

Health insurance

IMO Health Insurance is the most tricky of them all. So you'll see more resources related to this topic.

When I was in a corporate job, this was one of the perks offered. But as a remote worker, we neglect this at our own peril because it's quite complicated.

The premium is the least important part. At the minimum, you need to look at exclusion criteria, pre-existing disease, room rent capping, waiting period, portability, gather brochures, compare and contrast them before you pick one.

It would also be possible to buy one with a premium that makes sense to you and extend that via Super Top-Ups rather than buying something with the largest premium.

Other important guidelines

• Take as high a coverage you can, premium does not increase linearly with coverage. e.g. If you’re in your 20s, take 30Lakh cover.
• Don’t hesitate unless it’s way out of your budget.
• The PPA desks at the hospitals you go frequently, are your friends. Talk to them about which plans are better suited there.
• Don’t make a decision simply based on “who has the cheapest premium”, instead read “exclusion criteria” and “waiting criteria” very well and then take a decision.

⚠️ Medical insurance for older folks tends to be expensive and complicated especially if there are pre existing conditions. So reach out to all companies you possibly can with good settlement ratios and be upfront with the existing conditions.

Look at websites like Coverfox, Policy bazar to research plans. If possible, buy through them, they’re very helpful.

Laptop Insurance

You can look at services like OneAssist if you have recently purchased a laptop ( < 3 months )

Or you can go with a home insurance where your electronics are covered as well. We had Saurabh recently dig deeper into this topic.

Finally decided to go with HDFC Ergo - for home / laptop insurance just because they were transparent in their pricing.

• Any portable electronics are not included in the general home insurance and you need to get it as an addon.
• Also, portable electronics cannot be > 30% of your SI — which meant I HAD to take a 10L policy.
• Added all laptops at home which came to ~ 3L So base policy was ~ 5K and 5K addon cover comes to ~ 10K for 1 year. (I should get GST back I hope). So roughly 8.5K

Get quick help from the community

• Ruchir for Health Insurance (runs a insure tech startup based out of Bangalore focussing only on Health Insurance for individuals and SME’s)
• Naga for term insurance (CA working with some folks in the community)

Investigate further

RI AMA with Ruchir

Ruchir answered the below questions in this session.

1. What cover should we take for our parents and at what cost. The cost of insurance per year for older people over 50 can easily be more than 50k a year for health insurance in the range of 5-10L. Is it better to make a corpus than to rely on health insurance since there can be a chance of claim rejection or non-coverage due to pre existing conditions
2. What are the factors to look for when choosing a health insurance
3. What coverage amount should one take the cover for
4. Is there is a difference in the claim rejection and out of pocket costs for a lower cost policy vs a higher cost policy for the same services availed at the hospital
5. What are the common things people make mistakes about when taking a health insurance
6. Can you explain a little more about super-top up policies and how they can be used with existing health insurance.
7. Is super top up a better way to cover the health insurance requirements for older people
8. How to calculate the super-top up one should take.
9. Is taking a critical illness cover with health insurance better or with a term insurance
10. Do the insurance providers give out data in detail re. the claims made, amount disbursed and claims for various categories and products

RI: Personal Finance for Remote Workers

Topics that were covered during the 1 hour presentation include -

• A. Social Security for Remote Workers
• B. Invest Planning and Portfolio Allocation
• C. Introduction to Term Insurance
• D. Debunking Common Investment Myths
• E. Q&A

Freefincal Resources

Freefincal's guide to How to choose a suitable health insurance policy

Freefincal video on Health Insurance

Freefincal guide on How to buy Term Life Insurance