Why Health Insurance can’t be ‘optional’ in today’s time?

Keeping good health is always imperative. We just cannot afford to lose on our health front as there are so many direct and indirect downsides linked to it. We are constantly finding new ways to keep up the good health. We are getting more and more aware about ways and changes in lifestyles that can help us to lead a healthy life. But due to growing stress and hectic lifestyles, health has taken a step back and we get no time or less time to take care of our health resulting into multiple health issues.

Health issues, when arise, can’t be ignored. They need to be treated as soon as possible. But what if you are unable to do so? Many instances have come into the light when people are not able to fulfill their healthcare needs. Even those who are doing decently well in their financial life and/or belong to a well-to-do family are unable to take the right steps during emergencies. Some of them do have the resources but immediate need and no planning makes a hole in their pocket. A major reason seen behind these kinds of instances is lack of financial resources and planning. Health insurance comes handy during these kinds of situations and helps an individual when medical attention is needed on an instant basis.

So by no means, health insurance is a matter of choice. Let’s find out why health insurance can’t be an option but a necessity in today’s life.

Increasing Number of Lifestyle Diseases

If the report from World Health Organization (WHO) is to be believed, cardiovascular and respiratory disorders are posing threat to the entire world. These kinds of disorders fall into the category of lifestyle ailments and account for 38 million deaths every year globally, out of which approximately 28 million deaths occur in middle and low income countries and that indeed includes India.

Increasing-number-of-lifestyle-diseases

The shocking news is, you don’t have to be 50+ to be a diabetic patient. People in the age of 25 are being diagnosed with this problem. Similarly, cholesterol problems are being found as the onset of heart diseases. Cancer is something you never know who gets afflicted to it and when. Thanks to the sedentary lifestyle that consists of long sitting hours and no physical endurance.

So, you should not wait for a certain age to approach to buy an adequate health insurance policy. In fact, when you buy a health plan in your young age, you are more likely to get better deals and discounts on the premium. Health insurers not just provide policies but they have wellness and preventive programs too through which they help the policyholders to adopt a healthier lifestyle. So, if you are not able to give some time to yourself and pursue some fitness regime, having a health policy will definitely help you to take care of yourself through their wellness programs.

Expensive Medical Care

Health care is getting expensive with each passing day. The cost of treating ailments pertaining to heart, kidney and other organs can run into several lakhs. If someone is diagnosed with any critical illness such as cancer or organ transplant, there is just no end to hospital expenses. Neither you can compromise on quality of treatment nor its efficacy. Moreover, these expenses are expected to only increase in the future. And yes, health adversities do not hit as per the individual’s financial profile.

If you do not have health insurance policy in place, it can wipe out a large amount of your savings that you had accumulated for years to fulfil your financial goals. Thanks to the advent of private insurance companies in India, the cost of health insurance is getting competitive and efficient.

Expensive-medical-care

Let’s assume there is a 30-year old person who has two children. His annual income is Rs 14 lakh. This makes his monthly income as Rs 1.16 lakh. He has been diagnosed with high coronary heart problem due to build-up of plaque. He has been asked to get operated to remove this plaque. But this surgery outrightly costs him around Rs 5 lakhs. If we assume he used to save Rs 30,000 per month, he would have to use his savings of approx. 17 months. If he had health insurance policy, he could have simply informed his health insurance company and got the expenses reimbursed or could have gone for cashless treatment.

Better Financial Planning

All insurance plans work as a risk management tool for you. Health insurance provides coverage of risks against possibilities of financial distress during health emergencies. In this way, it safeguards your other investments. You do not have to liquidate other investments in a hap-hazard manner.

Let’s take a case example here. Mr Wadhwa who is a successful businessman with an annual income of Rs 40 lakh. He has diversified his funds in real estate, mutual funds, equity, bonds, fixed deposits etc. One day he is diagnosed with brain tumour. Doctor asks him to get admitted to a hospital to get operated immediately and deposit advance of Rs 4 lakh. Since he does not have that much cash in hand, he will have to disinvest in an unsystematic way and this can also bring him loses. On the other side, Mr Gupta has annual income of Rs 20 lakhs. Whether he has diversified portfolio or not, it doesn’t matter, since he has an individual health insurance policy which covers critical illnesses, he will never have to go through the kind of a situation Mr Wadhwa has. His investments will remain safe during these kinds of exigencies.

Availability of Medical Treatment in Systematic Way

A health insurance policy also assists you to avail medical treatment in a planned manner as health insurance companies have a network of hospitals empanelled with them. During an emergency, the policyholder has to simply visit the hospital empanelled with his insurance company and intimate the insurance company regarding his admission in the hospital. The insurance company gets in touch with the respective hospital and expedites the medical treatment. This brings convenience for the insured as he gets his hospital bills directly paid by his insurer or reimbursed later.

Benefits

Tax Benefits -Icing on the Cake

Health insurance covers you against health-related risks and provides additional benefits like tax exemption, which serve as an icing on the cake. Premium paid towards health insurance policies of individuals below the age of 65 is eligible for tax deductions up to the limit of Rs 15,000 under section 80D of the Income Tax Act. This exemption increases to Rs 20,000 wef A.Y. 2016-17 annually if the premium is paid towards health insurance policy with an additional Rs 15,000 for parents. Additional deduction of 20,000/-  (Rs. 30000/- wef A.Y. 2016-17) could be availed in case of a senior citizen.You can claim a separate deduction for medical premium of your parents.  Deduction U/s 80D for Mediclaim Premium is applicable to Individual, HUF, Senior citizen.

Always remember that insurance is a risk management tool before anything else. However, people have been using it increasingly as a tax saving instrument. Consequently, they end up procuring health insurance plan, which either over-insures them or does not meet their actual needs. Procuring health insurance without understanding your needs can be detrimental to your financial wellbeing.

The basic purpose to buy health insurance plan should be to manage and improve your risk-handling capacity. Therefore, always figure out your needs with due care and conduct some basic online research about various plans before taking any decisions.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

One thought on “Why Health Insurance can’t be ‘optional’ in today’s time?

  • June 21, 2016 at 2:58 PM
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    great and helpful post, as i was looking for an insurance
    company, i will keep your advice in mind.

    Reply

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