Due to increasing financial literacy, long gone are the misconceptions about insurance being more of a liability than an asset. But there are some pointers you need to know when choosing the right health insurance.
Your instinct to save money may be strong, but lower monthly premiums may not be more cost-efficient since they also mean less coverage. When a product comes with a small price tag, it is worth the time to look into the specific coverage that it includes.
Most of the time, lower premiums mean higher deductibles and miscellaneous fees and lower payout maturity.
Let’s take the well-known PhilHealth and investigate its main drawbacks.
First, the health coverage is paid in terms of Case Rates. The Phillipine goverment comes up with a coverage limit for every illnes. The limit is further divided into doctor fees and hospital fees. In usual cases, PhilHealth only covers 30% – 50% of what you need to pay.
For example, if you have a lung infection and spend four days at the hospital, it can cost you ₱34,000 but PhilHealth only covers ₱10,000.
The second drawback is that PhilHealth now doesn’t cover major illness under Z benefits, including various kinds of cancer, leukemia, heart disease, renal disease, and coronary artery bypass graft surgery.
The last drawback is that the 45-day same illness treatment limitation. For example, you were hospitalized for the flu for 7 days. If you get admitted for the same illness in the future, you will only be covered for 38 more days in the same year.
If this is your first time to get insurance, ask an experienced agent there who you can open up with about your health or financial situation. Bare in mind all the drawbacks of the PhilHealth to avoid it with your new potential insurance plan.
Remember:
- Not all insurance plans are made equal. For example, if you have a certain illness history in the family, the agent may recommend a policy that covers this specific set of illnesses.
- If your agent is aware of your debt situation, he/she may offer term insurance that is more suitable for your limited finances.
- Also, you will do well to ask the insurance agent about the claims filing and payout procedures and how immediate the payout is — and let them explain it in detail. Each insurance company has its exact process, and by going over this with different agents, you will know which product is worth the trouble.
Finally, it pays to do your homework by going over the specific terms with your agent. For example, maturity values are only base numbers and don’t consider factors for adjustment.
What you can do is ask the agent for actual returns defined by the internal rate of return. This way, you can see a more realistic net value that you can compare with your initial expenses.
Always keep in mind:
Proper private insurance will save your life and thousands if not millions of pesos.
