Imagine an individual who has always been in good health. She believed it was unnecessary to invest in health insurance and instead invested in other avenues. One day, she gets into a serious accident, which results in her savings getting exhausted and medical bills piling up. She went into debt and could not recover her savings amount.
Health insurance plans protect you and your loved ones when preparing the financial blueprint and wealth planning. Such plans guarantee that you will not have to stretch the limits of your savings when there is a health crisis by ensuring suitable investments against hefty medical costs. Therefore, financial advisors always suggest the importance of buying health insurance early on in life.
Let’s check out why health insurance plans are essential for managing personal finances that would eventually add to your wealth in the long term.
The Growing Importance of Health Insurance Plans
Imagine your loved one is diagnosed with a serious illness requiring immediate hospitalisation and surgery. Without insurance, you will have to incur:
- Hospital bill costs
- Hospital stay cost
- Medication and treatment costs
- Diagnostic tests costs
This might lead to a significant amount of debt. Many people are forced to sell their assets, borrow money, or incur debt, depleting their life savings.
It is a constantly changing field, with rises in the expense of health care and tip fees–if your health insurance coverage is insufficient, you are entirely exposed to health risks. According to the National Sample Survey Organisation (NSSO), healthcare costs put 5% of India’s population into poverty yearly. Thus, a health insurance plan is worth every penny, as it will provide a windfall by keeping unforeseen medical bills from draining otherwise hard-earned funds.
Financial Security and Risk Mitigation
One of the primary reasons to opt for health insurance is risk mitigation. Health insurance helps you manage the high cost of medical treatments, including surgeries, hospital stays, and long-term care. For instance, heart surgery can cost anywhere between ₹2 lakh to ₹10 lakh, depending on the hospital and location. Without insurance, you could easily be left with a huge financial burden.
Here’s a look at how health insurance can make a difference:
Health insurance removes the need to dip into savings for such unforeseen expenses, thereby protecting your wealth.
Financial Planning and Wealth Management
Health insurance plans are also essential for broader financial planning. Medical emergencies can throw off your entire budget without insurance, jeopardising short-term financial goals and long-term wealth accumulation. The best health insurance policy ensures that unexpected medical expenses don’t interfere with your investments, retirement planning, or other financial goals.
Here are some ways in which health insurance contributes to wealth management:
- Preserves Investment Portfolio: If you have a significant investment portfolio, medical emergencies could force you to liquidate assets to pay for medical expenses. Health insurance helps preserve your investments by covering these costs.
- Reduces Unplanned Expenses: You can avoid unplanned, disruptive financial obligations with medical costs covered. This allows for better focus on long-term wealth-building strategies such as savings, mutual funds, and retirement plans.
- Tax Benefits: Health insurance premiums are eligible for tax deductions under Section 80D of the Income Tax Act. This means that you protect your health and enjoy tax savings by paying your premiums.
Choosing the Best Health Insurance Policy
While health insurance plans are essential, choosing the right one is equally important. The best health insurance policy offers coverage that suits your needs, family size, and lifestyle. It should provide adequate coverage for hospitalisation, critical illness, maternity, and even day-care procedures. Here are some key features to consider:
- Comprehensive Coverage: Ensure the policy covers various medical conditions, treatments, and services.
- Affordable Premiums: Premiums should be affordable without compromising coverage.
- Cashless Network Hospitals: The policy should offer an extensive network of hospitals where you can avail yourself of treatment without paying upfront.
- Pre and Post-Hospitalisation Benefits: These cover medical expenses incurred before and after hospitalisation.
- No Claim Bonus: Some policies reward you for making no claims by increasing your sum insured for the following year.
To find the best health insurance plans, check out reliable sources to compare various options based on coverage, premium, and benefits.
To Sum Up
Understanding that health insurance is not a healthcare safety net would mean the end of a highly powerful first-of-its-kind financial management instrument. By obtaining the appropriate health insurance plan, one can shield oneself and his or her family from the financial strains imposed by medical recommendations while leaving room for long-term financial goals to preserve their value. Whether looking for a basic coverage plan or the greatest health insurance policy on the market, health insurance is a sound financial option.
