Discover the formula for managing your insurance portfolio for just a thousand baht a month, perfect for those on a budget to build a health safety net.

Insurance column: Financial and Banking Journal, June 2569 issue (Issue No. 530)

Encouraging working adults to plan their insurance portfolio, it's recommended to start with even a budget of just 1,000 baht per month, with plans covering basic health, critical illness, and accidents. The key isn't buying the most expensive policy, but rather one that's affordable, practical, and helps mitigate the risk of impacting savings in the event of serious illness.

Unlocking the secrets of insurance portfolio management.

In an era where healthcare costs grow faster than income, having health insurance, even starting with a small budget, is a more worthwhile way to lock in risk than waiting until you're sick to plan. Ultimately, the most important thing isn't buying the most expensive insurance, but having insurance that you can afford and that will actually work when needed.

Currently, consumers are shifting their behavior from purchasing a single policy to creating insurance portfolios tailored to their income and risk tolerance. This might include health insurance for medical expenses, critical illness insurance for a lump sum payment, accident insurance for daily risks, and life insurance to protect their families. This approach allows for more efficient use of funds and enables the gradual increase of coverage as income grows in the future.

With a budget of 1,000 baht per month, where should I start?

For those first-time insurance consumers, especially those aged approximately 25-35, with a budget of around 1,000 baht per month or approximately 12,000 baht per year, it is recommended to focus on basic health insurance and minimum critical illness coverage before opting for more complex coverage. Suitable options include:

• • Fixed-price health insurance with an initial coverage limit. The room rate is approximately 1,500-2,000 baht per day, with a total medical coverage limit of 5-10 baht per year.
  • Personal Accident Insurance (PA) Covers death and accident medical expenses.
  • Supplementary contract for early-stage critical illness. For common diseases such as cancer, heart disease, and stroke.

The reason for starting with basic health care is that the biggest expense for working adults often comes from hospitalizations, rather than minor illnesses. This is especially true if they need to seek treatment at private hospitals in provincial areas, where many now have room rates starting at 3,000-6,000 baht per night. Without insurance, minor surgery or an admission for 2-3 days could immediately cost 50,000-150,000 baht. Furthermore, having basic health insurance from a young age helps lock in low premiums and makes it easier to obtain insurance coverage in the future.

How to manage a portfolio effectively with a budget of 3,000 baht per month.

For those with a budget of around 3,000 baht per month, or 36,000 baht per year, they can create a more comprehensive insurance portfolio that better suits their needs for treatment at private hospitals. Attractive insurance plans include:

1. 1. High-coverage health insurance with a treatment limit of 20-50 million baht per year and room charges of 4,000-8,000 baht per day. It offers expanded coverage for surgery and critical illnesses, making it suitable for those seeking access to mid-to-high-quality private hospitals in provincial areas or Bangkok.
   2. Add Critical Illness (CI) insurance to receive a lump sum payment when diagnosed with a serious illness such as cancer, heart disease, or stroke. The advantage is that the lump sum received can help compensate for lost income during treatment, which is crucial for freelancers or business owners.
   3. Adding income compensation insurance for those without company benefits, including daily compensation while hospitalized, would significantly reduce the impact on their income.
   4. Another point many people overlook is the network of contracted hospitals. Even if some policies have low premiums, if there are no private hospitals in the province that can cover your coverage, or if there is no Fax Claim/Cashless system, you may have to pay a large amount upfront. Therefore, before making a decision, you should check whether the insurance company has contracted partners in your province, whether there are private hospitals near your home that accept claims, whether there is an online claims system or how much upfront payment is required, and whether there is a claim tracking application available, etc.

Creating an insurance portfolio for the new generation.

When choosing insurance for young people, they shouldn't only consider the cheapest premium rate. They should consider several factors before making a decision, such as the following:

1. 1. When choosing life and health insurance, don't just focus on the lowest premiums. While many people choose based solely on price, some plans may have co-payment conditions or limitations on certain medical expenses, meaning you'll have to pay more when you actually get sick. Therefore, it's advisable to start at a young age because premiums increase with age, and it may be easier to exclude pre-existing conditions.
   2. Read the terms and conditions regarding room and surgery fees carefully, as some policies may have low room rates but high surgery costs. Therefore, to get the most comprehensive coverage for medical expenses, choose a lump-sum health insurance plan and select a hospital network that best suits your lifestyle. Although the premiums may be higher than separate expense coverage, a lump-sum plan will be more cost-effective in the long run if you need hospitalization.
   3. If you are a freelancer, you should have health and critical illness insurance as well, to receive more comprehensive coverage. Because you don't have employer benefits to cover your medical expenses, a serious illness could impact both your medical costs and your income simultaneously.

Understanding Copayments Before Buying Health Insurance

Currently, many people may be confused about whether "copayment" offered by insurance companies is the same as "copayment according to the OIC (Office of Insurance Commission) criteria." Although both use the term "co-payment," they actually have distinctly different origins, objectives, and calculation methods, especially in 2569 when the health insurance market began to increasingly use co-payment systems to control medical costs.

What is a typical copayment method?

A typical copayment option is a health insurance scheme where the policyholder chooses to co-pay a portion of medical expenses in exchange for lower premiums. The key characteristic is that it's an optional condition specified in the policy from the outset, with the customer knowing in advance how much they will have to pay themselves. This serves as a tool to reduce premiums and make insurance more accessible.

For example, customers can choose to co-pay 10% each time they are hospitalized or opt for a deductible of the first 30,000 baht per year in exchange for a 20-40% reduction in premiums. Currently, many companies are starting to design plans like this, such as Muang Thai Life Assurance with its D Health Lite plan and Prudential Thailand, as well as many health insurance companies that are trying to make insurance more accessible to people with limited budgets.

What is copayment according to the OIC (Office of Insurance Commission) criteria?

Copayment, as stipulated by the Office of the Insurance Commission (OIC), is a regulatory measure to control unusually high claims that were not initially chosen by the customer. The key point is that customers may not have co-paid at the time of purchase, but later, if their claims meet the OIC's criteria, the insurance company can require them to co-pay in the renewal year.

The primary objectives are to reduce unnecessary claims, control medical inflation, lower the cost burden on the health insurance system, and prevent overall insurance premiums from rising too sharply.

Discover a comprehensive healthcare plan with flexible co-payment options to suit your budget.

Mr. Panat Suthinon, Deputy Managing Director, Muang Thai Life Assurance Public Company Limited. The company revealed that it has introduced D Health Lite, a comprehensive health insurance plan that allows customers to adjust premiums to suit their budget. Options include a lump-sum coverage from the first baht, a fixed deductible plan with options of 20,000 baht, 30,000 baht, 50,000 baht, or 100,000 baht, or a copayment plan with options of 10% or 20%.

The plan is guaranteed from age 30 days to 90 years, with coverage extending to age 99. It covers medical expenses for general illnesses, serious illnesses, and accidents, with a maximum coverage limit of 1 million to 5 million baht per treatment at 165 partner hospitals nationwide. The coverage limit, number of days, room charges, and doctor's fees can also be increased. Plans can be upgraded without requiring a new health declaration.

Furthermore, the deductible can be adjusted into two age ranges: 11-15 years and 55-65 years. Payment is based on actual costs, up to the chosen coverage amount. This covers inpatient medical expenses such as ICU fees, day surgery, doctor and anesthesiologist fees, medical service fees, outpatient (OPD) follow-up within 30 days of admission, 24-hour emergency accident coverage, and emergency ambulance services. It's suitable for freelancers, office workers, children, and those residing in provincial areas who want low premiums but with coverage and services meeting private hospital standards.

This includes comprehensive services through the “MTL Smile Hospital Network” project, which provides easier access to treatment and benefits by connecting insurance policies, services, and a network of hospitals. Patients can receive treatment at any of the 165 hospitals participating in the project, along with the MTL Health Buddy service, a healthcare assistant that can provide advice and recommend hospitals in the MTL Smile Hospital Network and suggest specialist doctors suitable for their illness.

The exclusive benefits include extra coverage with a maximum 20% increase in medical expense limits, a maximum of 365 days for room and doctor fees, and special privileges to further reduce expenses, such as a 10% reduction in the fixed deductible or a 50% reduction in the specified copayment amount. Other benefits include faster pre-operative cost assessments and access to discounts and special pricing on popular surgical procedures from various hospitals.

In addition, the company offers insurance plans under the Muang Thai Premier Legacy program (with a fixed surrender value) which has a fixed surrender value throughout the contract, resulting in lower-than-normal premium rates while maintaining the same level of life coverage. This is ideal for those who want to plan and pass on their legacy. Two options are available: a single-premium payment plan, “Muang Thai Premier Legacy 99/1 (with a fixed surrender value),” available for ages 30 days to 80, and “Muang Thai Legacy Wealth 99/5 (with a fixed surrender value),” available for ages 30 days to 75. Both offer 5-year premium payments, coverage until age 99, and 100% life coverage with a minimum sum insured of 10 million baht.

PruInsurance covers soaring medical expenses; coverage is available for just 1,000 baht per month.

Mr. Bandit Chiamonukulkit, Chief Executive Officer, Prudential Life Assurance (Thailand) Public Company Limited Prudential Thailand stated that amidst the current situation of medical inflation, which has become a significant risk to Thais, data from Willis Towers Watson (WTW) indicates that global healthcare spending is projected to increase by an average of 10.3% by 2026, while the Asia-Pacific region could see increases as high as 14%. This aligns with data from the National Economic and Social Development Council (NESDC), which shows that medical inflation in Thailand by 2568 could reach 10.8%, 15 times higher than general inflation, reflecting that healthcare costs are becoming a long-term burden on Thai households.

"Currently, health risks affect not only medical expenses but also income and family stability, especially for the Sandwich Generation, or 'the burden bearers,' who have to care for both parents and children simultaneously. Therefore, choosing health insurance shouldn't only focus on short-term emergencies, but should also plan for the long-term future."

Therefore, the company launched the "PruMor Health: Peace of Mind" campaign to address the continuously rising trend of medical costs. This comprehensive health insurance plan caters to people of all ages, especially salaried employees, freelancers, and the heaviest burden on their families. The campaign also provides guidance on choosing the right insurance plan to create long-term health security in this era of high living costs.

The PRU comprehensive plan focuses on covering actual medical expenses, reducing the risk of escalating costs, especially for major illnesses or treatments at private hospitals, where costs are rapidly rising. Additionally, it offers services such as the PRUHealth Team, which coordinates treatment, and supplementary coverage for critical illnesses. This aligns with the behavior of modern consumers who prioritize peace of mind over simply seeking low premiums.

Example: Planning for a budget of 1,000 baht or 3,000 baht per month.

For salaried employees or freelancers just starting their careers, aged approximately 25-35, with a budget of around 1,000 baht per month or approximately 12,000 baht per year, the choice of insurance plan should prioritize protection against major risks. Recommended plans include entry-level health plans such as PruBetter Care, or health plans with entry-level room coverage, primarily focusing on inpatient (IPD) care. These plans include coverage for surgery and initial treatment for critical illnesses and can be combined with social security or company benefits to reduce the financial burden. This helps protect against large expenses that could immediately impact savings, such as emergency surgery, dengue fever, pneumonia, or accidents requiring private hospitalization. This is suitable for freelancers just starting their careers, office workers establishing their businesses, those without significant family responsibilities, and those seeking to begin building their health insurance coverage.

For those with a budget of 3,000 baht per month, or approximately 36,000 baht per year, they can choose more comprehensive plans such as the PruMao Mao UltraCare plan or a higher-coverage lump-sum plan. This includes coverage for mid-to-high-end private hospital room charges, coverage for critical illnesses and complex treatments, and outpatient (OPD) or supplementary coverage. Additional critical illness insurance or income-generating insurance can also be added.

The advantage of paying insurance premiums within a budget of 3,000 baht per month is that it allows for more comprehensive risk mitigation, especially for heads of families or those caring for parents and children. In the event of serious illness, not only will medical costs be high, but there may also be a loss of income during recovery. This group includes middle-income salaried employees, small business owners, those who bear the brunt of their families, and those who require ongoing use of private hospitals.

However, to ensure that your choice of health insurance is worthwhile and provides good value for your budget, you should consider at least four things before making a decision:

1. 1. Is the annual lump-sum payment sufficient?
   2. Is the hospital network and claims service convenient?
   3. Does it include coverage for critical illnesses and modern medical treatments?
   4. Are the insurance premiums commensurate with long-term income?

"Since health insurance is a long-term contract, choosing a plan you can afford for ongoing payments is more important than buying the maximum coverage in the first year. Especially in an era where medical costs are rising faster than salaries, health insurance is no longer just for the wealthy, but has become a financial risk management tool that helps maintain both the health and financial stability of Thai people in the long term."

You can read other columns in the June 2569 issue (No. 530) of the Finance and Banking Journal, available in digital format. https://goo.gl/U6OnIi

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