How to plan your health insurance premiums well in advance?

Unlike a life insurance policy or other plans, health insurance plan does not come with a specific amount in a fixed period, which is why most of the policies get lapsed due to not paying premiums on time. Being an annual expense, a health insurance policy can cost almost 15,000 to 20,000 to a family every year, which is not a small amount to be paid. Therefore, the expense should always be planned in advance so that one can avoid renewing issues, and paying all the money together.

Here are some more tips so that you can plan your health insurance premium in advance-

Choose a Health Insurance Plan keeping your affordability and budget in mind:

Don’t go for a health insurance plan on the basis of a premium only. Though the most important thing is to consider what are the requirements of your family and how many benefits you are going to get, still a higher sum assured will get you in trouble while planning for the budget. For instance, if your annual income is 3.5 Lakhs, managing 20,000 for the health insurance premiums will become a stress for you and your family.

You can explore more options that fit your budget such as a policy with minimum but effective features, or a policy with some deductible, and can further reduce premiums. No need to buy the top policy and increase the premiums, which you cannot play on time.

Include the premium in your annual budget plan

Preparing an annual budget is a smart thing, middle-class families do these days. When you are planning an annual budget in January, you must include this amount as a necessary expense of the year. This will allow you a careful cash flow planning, and you can cut the less essential expenses, to make sure you are not running out of money before the due date.

For instance, if your annual premium is 15000, and your due date in October that means you will have to access the amount in liquid fo by the end of September. In such a case, you can keep aside 3000 for 5 months, and you will have 15000 by the time you are required to pay for your health insurance premium. Smart budgeting and planning can make you save on the other expenses, and keep you stress-free.

Maintain an emergency fund

Apart from all the monthly expenses, you should always maintain an emergency fund of 6-12 months of your monthly income, and keep it in a fixed deposit. This will not only help you get more financial security but if for any reason, you have no amount secured for the premiums, you can draw from the emergency fund to overcome such situations. Later, when you get a yearly bonus or Diwali bonus, you can fill up the emergency fund again.

Keep reminded for premium dates

No matter how smartly you have saved for the premiums if you have forgotten the due date, then nothing would work in your favour. Thus, before you have to regret missing the due date of paying for the premium or renewal date, start tracking the dates and keep reminders of the due dates. You can either keep a reminder before a month so that you can check if the amount is ready or before a week to become aware of the fact that a few days left to pay for the premium. If not, then you will miss the renewal date, and your policy will get expired.

The optional payment method:

You may not be able to follow all the above-mentioned steps to plan the premiums in advance, and next week would be the last date for renewing a health insurance policy. What would you do then?

If you have a credit card with spare funds kept aside, then it would be the best option to use the credit card, and pay the premium as early as possible. However, you should also make sure that the credit card bills in the next month, will not become an issue for you or lead you, to long term problem with a poor credit score. This is why paying with a credit card is the last option you are recommended with.

Rather than having a last-minute shock, before the due date, it is better to sit back ab plan everything. This not only helps you manage your health insurance payments, but you get overall satisfaction as you are almost aware of how you are going to manage yourself financially.