Health Insurance: Important step in Financial Planning

Health cost is increasing at an alarming rate worldwide. Medical inflation is highest in India. New diseases are emerging and their treatment cost is increasing. Health cost can make a big hole in the individual’s pocket if prior provision is not made in advance.

Medical emergencies come unannounced. To get the best medical facilities without a financial burden you will need health insurance. Buying a health cover is no longer an option but has become a compulsion. Only 1.1 billion of the Indian population which is less than 15% of the Indian population is covered through health insurance.

According to WHO statistics, 31% and 47% of the hospital admissions in urban and rural India are either financed by loans or through the sale of assets. Additionally, as per the statistics, 70% of Indians spend their entire income on healthcare and 3.2% of Indians fall under the poverty line owing to high medical bills.

Health Insurance has come up as a big relief. Health insurance increases accessibility to quality healthcare, private healthcare in particular where the costs remain a barrier for many. It will ensure that you get appropriate treatment in a timely manner. Irrespective of your financial capability, with an active policy you can avail the best treatment at any network of hospitals, with the clause that terms and conditions of the policy are met.

But do we pay enough attention to it? Do we get our health insurance done when we are young and healthy? Do we have enough health cover or are we under insured?

Salaried employees are covered under the company’s group health plan. But is sufficient? The answer is No.

  • Many times the company’s group health insurance sum assured is not sufficient. The medical cost of treating major life-threatening diseases is huge so there may be a shortfall in health insurance sum assured and you have to incur the extra amount required.
  • If you lose your job, your group health cover is ceased. You will not be a part of that. In this scenario, you and your family are out of health insurance coverage.
  • At the time of switching a job, you may be not covered for health until you get registered under the new employer’s group health plan or until your transition period.
  • Many times as per the company’s policy, only 80% of the medical bill is reimbursed. Rest bill payment you have to incur. Thus relying only on the company’s health insurance can make a hole on your savings.
  • Extra health insurance can serve you as a cushion in above-mentioned situations.
  • One can buy a standalone health policy or family floater as a base plan added to the company’s health coverage.
  • The additional top-up plan can be purchased at a very reasonable rate. This helps to provide you huge health cover at a low premium. This way you can save the premium outgo and invest the saved amount to create wealth.

So it is always advisable to have our own health insurance coverage even if you have health coverage from your company !!!

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