Importance of Health Insurance

A lot of individuals tend to overlook health insurance. This leads to several problems in life. Here are some of the biggest reasons why health insurance is so important: 

  1. Savings on healthcare costs
  2. Wide and comprehensive coverage
  3. Tax benefits
  4. No claim bonus (NCB)
  5. Family floater policies
  6. Hedge against medical inflation
  7. Overall improvement in wealth

Before we dive into each of the pointers, let’s try and understand what is health insurance.

Health insurance serves as financial protection against treatment expenses in case of unfortunate events like medical and accidental emergencies. 

As rightly said in common folklore, “Health is Wealth”, it is important to follow a healthy lifestyle with great diet and proactive physical activities. 

However, a lot of times even the healthiest of individuals can need medical assistance for a variety of reasons. To make sure situations like these do not break your bank, it is important to insure your health and your loved ones’ too. 

10 Factors to Consider When Buying Health Insurance 

When you are looking to buy health insurance, due diligence is very important. Here are some pointers that you should remember while buying a health insurance policy: 

Wide CoverageSum Insured
Extended RenewalCashless Hospitalization
Network of HospitalsMaternity Care
Pre/Post Hospitalization ExpensesOut-of-pocket Expenses
Lifetime RenewalPerks & Benefits

Why Health insurance? 

With rising medical inflation and advancements in diagnostic technology, the cost of treatment has become extremely prohibitive. In these trying times, it is crucial to be financially stable to get the best and the most viable medical treatment. Even a short visit to the hospital can exert huge pressure on your finances.

Here are a few critical points about why health insurance should be taken seriously as well;

  1. Saves on Healthcare costs

Whether it’s our annual physical, emergency care, surgical, prescription drug, or even sometimes your dental expenses, medical services get pretty expensive at times. Health insurance pays a portion of your bill as per the policy terms. 

  1. Wide and comprehensive coverage

Health insurance covers pre-hospitalization and post-hospitalization expenses as per the terms and conditions of the insurance policy agreement. There are some policies even covering for the transportation costs, i.e. ambulance. Therefore, the insured will be stress-free. 

  1. Tax benefits

The amount of premium paid for the health insurance policy is available as a deduction under section 80D of the Income-tax Act, 1961. The maximum amount of deduction differs as per the provisions of the Act, at applicable law in force. It needs to be remembered that the individual does not get this tax benefit in the case of group plans provided by their employers.

  1. No claim bonus (NCB)

Health insurance is not only cost-effective but also increases your coverage in a no-claim year. In simple terms, if there is a year in which you don’t claim for any coverage, then there will be an increase in the sum assured amount or reduction in the cost of the premium for the next year. Basically, the insurance company rewards you for being more careful in the entire year and filing no claims in a particular year. 

  1. Family floater policies

Choosing a plan for the entire family under the same policy head can ensure that every member can avail the best medical treatment. In the event of any medical exigency afflicting any member of your family, you will not have to worry about the financial costs. Such policies are also cost-effective with comprehensive health insurance coverage for the entire family.

6. Hedge against medical inflation

With every passing year, the cost of medical expenses is also increasing exponentially. In fact, medical inflation is much higher than the normal headline CPI inflation. Managing health care expenses during the post-retirement period becomes difficult, especially for critical illness or long-term care which you might encounter during old age. So, having insurance can take care of these expenses. You can also save money for post-retirement goals such as travelling, building houses etc.

7. Overall improvement in health 

It helps you stay healthy. Regular checkups, immunization, tests and screenings are necessary to prevent illness at a later stage. Well, the good news is that all health insurances now provide certain preventive services at no or minimal cost to you. Such screenings and tests are eye-openers and categorically question the habits affecting their health. You can take preventive measures and improve your overall health as well. 

Earlier the better

Opting for health insurance early in life has numerous advantages, especially opting for it at an early age. At a young age, you are fitter, healthier and less vulnerable to diseases. Therefore, the cost of insurance at a young age is much lower, and the benefits will continue even as you grow older. 

Besides, you will be offered more comprehensive coverage alternatives. Most schemes have a pre-existing waiting period which eliminates coverage of pre-existing ailments.

This period will end while you are still young and healthy, therefore giving you the benefit of all-out coverage that will prove helpful if you fall sick later in life. Also your NCB can accumulate and culminate in a higher cover when you start early.

Hope this helped you understand why getting health insurance is a must. To understand more about health insurance or find answers to your queries, check this out.

FAQs: Importance of Health Insurance

Why health insurance is important during Covid-19?

In the midst of the COVID-19 pandemic, no one in this world could predict the future path of the disease. You can merely anticipate what would be the level of uncertainty ahead of you and make provisions accordingly. Health Insurance is one such provision rather it is a much broader concept which is an investment in health. Coronavirus has transformed the world in every aspect; be it economically or socially. COVID-19 has a major impact on our health. With the rise in Coronavirus cases, health Insurance has provided the beacon of hope in times of uncertainties. There can’t be any debate about whether Health Insurance is beneficial. It is the best choice from the perspective of your health and your financial plan.

Will health insurance premium increase in times of medical emergency?

Health insurance is a tool using which you can secure your future. But, sometimes such provisions for the future can come with higher costs.
Medical inflation in 2018-19 was 7.14% which is approximately double the level in 2017-18 which was 4.39%. Medical costs are constantly increasing, adding to which COVID-19 has amplified the concerns. People have realized the need for health insurance and eventually, Health Insurance has seen an uptick making it the New Normal.
In times of medical emergencies like COVID-19, the health insurance premium may increase because of an increase in hospital expenses, demand for beds, future uncertainty, and fear and a threat to the disease. However, health cover is still an invaluable and indispensable advantage that you must have.

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