Medical costs have a way of getting at you when least prepared, often indirectly through your parents, siblings and others not included in your policy. It is therefore prudent to have some cover for these dependants.
Choosing what cover to subscribe to is hard, many assume that the cheaper the better. Unfortunately this isn’t always correct. Sometimes but not always, the more expensive cover turns out to be better.

But first of all ask yourself whether you need medical insurance. The general rules of illness are that babies will fall sick often till their teens.

Teenage girls will have more clinic visits than boys and may get pregnant. Boys will have more visits for trauma, accidents etc.

In the 20s, females will have many gynaecological issues and if engaged in frequent coitus most likely a pregnancy will occur. In the late 30s lifestyle conditions set in and continue till old age when degenerative changes cause frequent doctor’s visits.

These are just generalisations. Other factors also play a role especially the work and living environment, and your genes.

The latter, especially hereditary conditions, place you at a higher risk of getting sick. Of course there is the matter of accidents which is beyond our prediction.

Based on these factors, you can calculate your approximate risk and exposure for potential medical expenses. Then ask yourself: “Can I afford to pay the bills out of my pocket at once? Or should I get a cover?”

Patients’ risks

Insurers are in business and basically get more money by ensuring their settlements don’t outweigh their collections. How?

By carefully selecting and categorising their patients’ risks. They therefore shy away from people with existing chronic conditions.
This group will have more claims. If you have a familial trait it is also likely your premiums will be higher.

A look at the conditions for which insurers decline to insure patients shows they have done their homework well.

The list covers almost 40 per cent of our common “admission” conditions. Many want to settle claims for the usual cold, some malaria etc. I have seen a list with as much as 50 conditions excluded. In spite of these exclusions and high premiums, they still perform below average.

The cause isn’t related to claims but poor operational structures. Up to 40 per cent of your premiums are gobbled up by administrative costs.

For every policy, about 10 per cent goes to the agent. The trick isn’t exclusion of certain patients, but efficiency of operations by using agency models, outsourcing, and embracing IT. I am yet to see a provider selling insurance online, or using telemarketers.

Why can’t I have that 10 per cent rebate if I buy my cover online? With the entry of more providers some maverick ideas have come up.

A few bold ones are taking on HIV and even preexisting medical condition covers. I particularly like this TV ad about “rewriting the rules of insurance”. I hope the company lives by the script in their ads.

Survival tactics

If already insured, cover dependants not included otherwise you will spend a fortune on them.
If in a stable relationship you are likely to get a child, so broaden your cover. Insurers may not cover pregnancy if you had it before signing up.

If married, get one family cover rather than two individual ones. Some insurers allow you to upgrade your work cover by adding an extra amount.

Above all, know your pre-existing medical conditions before signing. Insurers don’t alter their policies afterwards.

As carried on the Business Daily