Stoked Smondays #3 - Easiest Way To Lose Lakhs In Days 💸

A newsletter that you can read on a lazy Sunday but actually preps you up for the much anticipated Monday. Not literally.

Jan 02, 2022

On a Sunny Sunday morning, a man notices his neighbour’s lawn.

The lawn is as fertile, dark, luscious and green as it can be.

Gulf Green Grass – Cape Gardens Landscape

He then shifts his gaze to his lawn and mutters “I wish mine were as lush and green as his. I would gladly water, mow and maintain it every Sunday.”

The neighbour while watering his grass, glanced over to his neighbour’s dead lawn and thought “I wish I had a dry lawn like his. So lucky he doesn’t have to water and mow it every Sunday.”

What Should You Do If Your Lawn Is Always Dry? (5 Tips)

3 Morals you can derive from this story:

The grass is always greener on the other side.
That being said, the grass is also greener on the side you water it.
And lastly, don’t mow your lawn on a Sunday. Instead, read my newsletter.

Hola guys,

I am sure your Whatsapp is flooded with the usual “Happy New Year” messages.

Even I have sent a few to my friends and relatives.

But while I was going through them - something struck me.

All these messages have one thing in common.

The word "happy".

In my 25 years of existence, I know for a fact that with each year passing by, we have been swamped with a wave of challenges, setbacks, sorrow and happiness.

And you’re no God - where you have the power to only choose happiness out of the four.

Then why the fuck do we wish each other just a "happy" new year?

When we clearly know that this year, like the rest, is definitely going to be filled with an awful amount of challenges and failures garnished with a pinch of sorrow and happiness?

I know we love being optimistic and there’s no reason why we shouldn’t be.

But I think it’s time we changed our multi-generational tradition of wishing new year’s.

It’s boring.

This is what I think we should be wishing for instead:

that this year we start what we’ve always wanted to
… and fail at it
… then succeed
… only to realise this is not what we were really seeking for in the first place
… and then embark on a completely different path we never thought we would
… only to realise at the end of 2022, how much is it that we have grown as an individual.

Also, I wish you find love, have sex, eat good, party hard, make tons of money, attain peace and love dogs.

The last one is the most important one.

This is the 3rd edition of Stoked Smondays and it feels good to have been able to pull it off so far.

Writing every Sunday unlocks a different side of me. It instils a sense of satisfaction and builds confidence.

Moreover, it makes me the guy who did what he said he will.

Doesn’t matter if it’s just a 500-word newsletter, but in the long run, these little things do have the power to compound.

With that being said, welcome to Stoked Smondays.

A newsletter that you can read on a lazy Sunday but actually preps you up for the much anticipated Monday. Not literally.

Today’s topic is simple: Health Insurance.

Well, it’s not that simple - but I am going to make it easy for you. I'll try.

Around last year same time - I got into the rabbit hole of personal finance and learnt two important things that one should work on before starting their investments:

Gopu Krishna Pillai @gkp1996

Two most important financial activities one should plan for right after they start their career is: a. Setting up an emergency fund = Monthly Expenses x 6 months (minimum) b. Buying a health and a term insurance. Every other investment can take the backseat for a while.

I called my dad and asked him if all of us were insured for health. He said yes.

M: What’s the coverage amount?

D: Around 10 Lakhs.

M: Wow! 10 lakhs for each of us?

D: No, it’s a floater insurance plan. So 4 Lakhs for me, 3 for your mom, 1.5 each for Pranav (my younger brother) and you.

For a moment, I felt betrayed.

I knew Pranav was the adopted one but what did I do to deserve a low coverage?

How can one be so selfish?

Later, I understood the insurance plan was built in a way where the eldest member of the family got attributed a higher coverage and the younger ones a lower coverage - for obvious reasons.

The point is a 10 lakh floater insurance plan for a family living in a metro will not do shit when shit actually hits the fan.

But for some strange reason (only known to him), my Dad felt it was sufficient.

I took the lead of our ship, drove it to the harbour, put my foot down and made it clear that this policy won’t work for us.

For a variety of reasons:

We live in Mumbai.
Medical inflation stands at 7.57%.
You are ageing. (Mom and Dad)
Anything can happen anytime. (Hello Covid)
We are not rich AF to cover the entire hospital expenditure when in need.

After hours of research, we finally bought 3 health insurance plans:

One for my brother - 10 lakh cover
One for myself - 10 lakh cover
For my Mom and Dad - 10 lakh cover. Combined.

Haha. 😈 It was my time to take revenge.

Jokes apart - the above insurance plan made sense for us. And I know for a fact that the same set of insurance plans will make sense for most of you.

Health Insurance Checklist:

When buying health insurance, here’s a simple checklist you can follow:

Whenever shit hits the fan - your insurance should incur the costs. No splitting the bill. There are tons of schemes out there for far lower premiums that will give you an option where you will only have to incur 20% of the expenses. It’s a trap. Don’t fall into it.
You get to pick a room you like: Imagine this scenario:

You’re bleeding head to toe. Mom rushes you to the hospital.

The receptionist informs that you’ll be put in ICU followed by in-hospital observation.

It’s certain that you’ll have to book a hospital room for a few days. Your Mom says okay - thinking the 10 lakh policy cover will be sufficient enough to cover the expenses.

While booking the room, your mom finds out there are only Single A/C rooms available.

But there’s a catch - your insurance policy doesn’t cover a Single A/C room. It only covers a Non A/C room. What do you do?

There goes money down the drain.

Make sure you opt for a policy that doesn’t have any restrictions on room & room rent.
Covers pre and post-hospitalisation charges: Pre-hospitalisation charges include any medical tests or lab checks you may have to undergo. Post-hospitalisation includes medication requirements after you’re discharged.
A low-waiting period: This is the trickiest and important of them all. Say, you purchase an insurance policy after being diagnosed with Covid thinking the insurance will pay for your hospital costs - then let me tell you, the world is not as beautiful and dumb as you think it is, my friend.

For every type of disease, there’s a waiting period. This means you’ll have to wait for a year or two before you can incur any coverage for treatments you undertake for that disease.
Ask for restoration benefit: Let’s revisit the above scenario

Two months in and you are bleeding head to toe. Again.

Your Mom thinking "what have I done to deserve a child like this", rushes you to the hospital. Only to find that 80% of your coverage got exhausted in your previous visit.

There goes money down the drain.

Again.

Make sure your insurance policy lets you restore your cover each time you make a claim. Yes, some policies give unlimited restoration benefits.

"You were wrong, Gopu. The world is beautiful."

Yes, indeed it is. But I wonder how dumb are you to bleed head to toe for the second time?
Check for Disease Wise Sub-limits: Read the clause to check if there are any specific disease or illness which has a coverage limit. You don’t want to be surprised later.
Cashless Claims: Let’s revisit the above scenario again.

You’re bleeding head to toe. (Something is definitely wrong with you)

Mom rushes you to the hospital. (Poor soul)

Only to find that she’ll have to pay for the treatment in cash and get it reimbursed from the insurer later.

Ouch.

From where will she get 3 lakhs now?

I’m sure this will hurt her more. Much more than the pain of seeing you bleed head to toe.

Make sure your insurer covers a wide network of hospitals and offers cashless claims - where they take care of the expenses and you won’t have to spend a single penny from your pocket upfront.

The following pointers can be brownies if it:

Covers daycare treatments
Gets you a bonus in case you don’t make a claim
Gets you free health checkups every year
Covers for Alternative treatments like Ayurveda

"But Gopu, there’s so much to look for before buying insurance. You said you’ll make it easy. Wtf?"

I know. Here’s the easy way out.

#1

Insurance Policies you can consider:

If you’re in your 20s with no pre-existing illness or disease and are in good shape, you can consider these 2 policies:

1. HDFC ERGO Optima Restore
2. Max Bupa ReAssure (Note: Max Bupa is now Niva Bupa.)

They cover all the pointers mentioned above along with the brownies. The links should help you better understand what they offer.

Prime differences between the two:

Premiums for Max Bupa are priced at 2k less than that of HDFC.
While Max gives the benefit of unlimited restoration in its ReAssure plan, HDFC restores it only once. But how dumb would you be to bleed head to toe for the 3rd time?
HDFC on the other hand covers a larger network of hospitals in India (10,000+ compared to 6,500+ of Max)

A good way to see it would be to check if the insurer covers hospitals within 3-5 km of your residence vicinity.

You can find the list here:

Max Bupa - Hospital Network | Spreadsheet (Updated as of Feb 2021)
HDFC ERGO - Hospital Network

In fact, you can consider the above 2 policies for your parents too. This is only if your parents are hail and hearty and do not have any serious pre-existing illness. In case of which you’ll have to consult an expert before making any decision. (More on this below)

Two tips:

1. Don’t buy a family floater insurance plan. You’ll end up paying a higher premium than you would when you purchase an individual plan. This is because the premium is calculated based on the eldest member in the group.

Buy an individual plan for yourself. Individual plan for your siblings.

And a combined plan for your Mom and Dad. This is because the difference between their ages won’t be high and it’s highly unlikely they’ll fall sick at the same time.

2. Don’t be like "I don’t need to buy a policy because my company has already bought an insurance for me."

What your employer has offered you must most likely be a group insurance policy.

Here’s why it’s not enough.

Where to buy the policy from?

Ditto insurance.

Back in 2021, when I was researching different policy options, I found that Finshots (which is India’s leading newsletter on all things finance, stock market and business) launched a new business vertical, named Ditto, where they helped people like you and me to buy insurance.

I got in touch with the founder - Bhanu and scheduled a 30-min call with him.

Asked him the dumbest of questions I could think of and he was patient enough to answer all of them.

If you’re still confused - schedule a call with Ditto.

Get all your questions answered.

Doesn’t matter if you think it’s a dumb one. Don’t hold back. This is your health we’re talking about.

And the best part? It’s free.

As a token of appreciation, you can buy the policy from them at no additional cost.

This piece ends here.

That being said I would highly recommend you to do your due diligence before you go ahead with your purchase. Trust but verify.

Not including links to any other reading materials this week. This newsletter is already too long to bombard you with more stuff.

I hope you don’t bleed head to toe this year. Just minor scratches and setbacks, only to make you grow stronger and brighter in 2022. ❤️❤️

Here’s wishing you a crazy new year from my family to yours! ❤️