Health insurance has turned the buzz word these days with many realising that it is an integral part of the portfolio. Even the employees have begun to look for independent health insurance plans thanks to the growing uncertainty at the work place. What has improved the popularity of the product is the rising medical costs and the likelihood of employer discontinuing the premium for the current year.

The good news for investor is that there has been a wider range of options. Besides the regular health insurance plans from general insurance companies which are popularly known as Mediclaim, there have been other variants from private sector. Life insurance companies which got into the action during the last couple of years have turned more aggressive by adding more features into to health insurance plans. For instance, India’s largest insurance company, LIC, has Health Plus which promises returns besides providing health cover. Now, ICICI has joined this fight by introducing market-linked features to its health insurance product. The other life insurance company, HDFC, which has been more focused on pension plans and insurance, too has joined the bandwagon and has a health insurance in its portfolio. With the growing options, it may become a necessity for investors to have more than one health plan in their portfolio. Does it make sense? Just check out if the following things are applicable to you.

Additional plan over and above provided by employer: It isn’t any more a luxury to have a separate health insurance plan for the family. Over and above the health cover provided by your employer, take another floater policy for the family. This should cover the entire family including parents. If your parents are not eligible to get cover from private or general insurance plans, sign up for Star Insurance which provides a cover of Rs 1 lakh for those above the age of 60 too.

Health cover from life companies a luxury: the insurance plans provided by life insurance companies are expensive when you compare them with general insurance plans. The premium is higher by at least 2-3 times but the advantage is that you can have them along with general health cover. Also, health companies allow you to claim the expenses with copies of bills. The biggest disadvantage with these products is that they are on individual basis. You can’t have a single plan for the entire family and hence, take a plan for the high income earning individual of the family. Since the premiums are expensive, it may make a better sense for the newer versions of the products where the premiums offer market-linked returns in the absence of claims. This will also ensure returns besides providing tax benefit. For instance, a professional in the age group of 40-45 may end up paying an annual premium of Rs 15,000-17,000 and if the premium can provide returns, the investor will be able to earn a couple of lakhs over a period of 10-15 years.

Increase health cover gradually: Insurance isn’t any more a one-time affair as needs keep changing over a period of time. With portability of insurance policies between different companies being a reality, you can take a comprehensive view of your health cover at regular intervals. However, review your health cover once in five years so that it is more realistic with the changing medical costs. Besides increasing the cover amount under existing plan, multiple products too can be considered for increasing the overall benefit.

A couple of generations back, the biggest worry of your career was landing a job. And then, one was more or less assured of security for the next thirty-five years or so until retirement. Today, your stability depends not just on you, but your company’s financial health and practices, the state of the economy as a whole, and the state of finance of the company’s customers and the economy of their home countries. To drive home the point is the latest Nortel development.
An announcement made half way across the world can shake up our markets, and for some, shake up careers and personal lives too. The dust has hardly started to settle down on the Satyam storm, and we already have something new to think about – the Nortel bankruptcy filing. Nortel has filed for bankruptcy, chapter 11 — meaning that it has asked for credit protection from the US Government to settle dues while it restructures itself, a little like our BIFR (Bureau for Industrial and Financial Reconstruction).
Indian IT stocks promptly fell between 2-5 percent in reaction to this news, mainly because Nortel has been one of the large outsourcers of IT to India. In fact, it was also one of the first companies to start outsourcing to India and practically every outsourcer is a vendor to Nortel.
Other than Sasken, which depended on Nortel for ten percent of its revenues, companies have said that their exposure was too little to make any significant financial impact. But that is in percentage terms. In absolute terms, 0.5 percent of $ 2 billion (Infy revenues) is around $ 20 million, while Wipro’s annual revenues from Nortel is around $ 25 million. Even if Nortel pays off all its outstanding dues, future business is likely to be much lower. Sasken had around 300 people on Nortel projects and if one assumes that the others too had anywhere between 250-400 people, then it is that many jobs lost for the Indian IT industry.
There is nervousness across companies about more nasty surprises, given current economic conditions.
Suddenly, the IT industry is not as coveted as it used to be, as the downsides to the industry are being unfolded practically every week. Youngsters have been reported to be declaring that it was far better to join the good old stable government sector, rather than live with the uncertainty. A friend said that her brother-in-law in the US routinely checks his mail on Sunday evening to make sure that he had a job to go to on Monday morning!
However, the uncertainty is not going to go away and we simply we have to learn to live with. A few golden rules to keep in mind:
Do not give in to panic: Assess your situation. If you see your company floundering or fear for your job, start looking around before you are forced to. Remember also that some things are completely unexpected, like the Satyam fiasco. These are beyond your control and not worth worrying about.
Prioritize your financial needs: In happier days, you might have bought a car, refurnished your home and upgraded your television set all at once. Focus on the most important need and work downwards.
Gather as much information as you can about all available options: There are enough websites, newspaper articles, and consultants offering financial advice. Look at various options and choose the one that suits you best.
Spend wisely: As long as you spend only that which you know you can afford, you are safe.
Invest for the future: This period of economic slowdown is only temporary. Invest wisely for the future, whether it is in a house, a car, education, or stocks and mutual funds.