Health Insurance Is a Must Have & Not a Choice

Published On 02 May 2019 By Gunjan Anand

The Health Insurance isn’t just a matter of choice, it’s a necessity.

A rather disturbing report from The World Health Organisation (WHO) shows that at least 47% patients from rural areas and 31% in urban cities in our country, either borrow money or sell off their material assets to cover hospital and medical expenses. In addition, approximately 70% of people wipe out their earnings to manage bills arising out of medical treatments. These humongous expenses have put approximately 3.2% of Indians below the poverty line. 

These are alarming facts and clearly depict the damaging financial effects medical emergencies have on the common person. Borrowing money from banks or NBFCs may seem like a solution, but the exorbitant interest rates often prove to be highly strenuous and damaging on the mental and physical wellness of person (in addition to financial duress). Unfortunately, medical inflation is very real and is continually surging upward. These factors ensure that health insurance policy is a ‘Must Have and not a choice’. 

People generally focus solely on life insurance plans. However, in the event of a medical emergency, only a health plan can prevent the problems as mentioned above, and help to a general disease or a critical ailment. In the absence of a health insurance plan, even financially well off families struggle to bear the medical expenses, especially in cases of critical illness. The factor shows that despite being equipped with several resources, sudden medical emergencies and lack of financial planning have a disastrous impact on the financial condition of a person. Those who do buy health insurance plans find it a lot easier to manage medical contingencies and can afford better treatment and regular medication. We give you a checklist to reaffirm that health insurance is a ‘Must Have and not a choice’. 

Soaring Medical Care Costs 

Over time, medical expenses have seen a sharp rise and the upward trend is expected to continue in the future as well. This surge has made it tough for people to afford good quality medical treatment. There are several medical conditions such as organ-related diseases, critical ailments, organ transplantation and others requiring high quality and sustained treatment. However, with the increase in the cost of medical treatment, affording the best medical care becomes near impossible. Without health insurance, savings are quickly wiped out, and additional finances would be sought through loans and or by selling off material assets. It would be wise to invest in a health insurance plan with maximum coverage. Please ensure that you compare various health plan options such that you buy the one that is most suitable for your needs. 

Developing Lifestyle Related Diseases 

Respiratory, inaccurate blood pressure and cardiovascular-related illnesses are a part of lifestyle diseases and are on the rise as per the recent study of the World Health Organization (WHO). With the increase in desk jobs, hurried lives with unhealthy eating habits and sedentary lifestyles, there is a rise in illnesses such as diabetes, bad cholesterol, hypertension, heart disease, and many more. What is more alarming is the fact that these are affecting even the younger generation, and these illnesses are not confined to a particular country but are spreading their vicious tentacles across the globe. To gauge the fatal impact of these lifestyle diseases, the report shows that they are the cause of over 38 million deaths yearly, across the world. About 28 million deaths are concentrated in underdeveloped and developing nations, including India. These facts make it crucial for all to manage their health and buy adequate medical coverage as early as possible.  

Act as a Preventive Measure to Protect Health and Finances

With the current lifestyle, increase in pollution, and other factors, lifestyle-related diseases are affecting even the younger generation. People under 40 years of age to suffer from severe medical conditions including (but not limited to) Type I and II Diabetes, heart-related, irregular blood pressure, and cholesterol issues. These ailments have been associated with older persons; however, today, people even as young as 25 to 30 years are afflicted with these damaging lifestyle-related illnesses. It is advisable to get medical coverage as early as possible since it is not only a secure safety net but also premiums are lower given the younger age, which is a great saving in terms of finances.  

Buying Health Insurance Better Financial Planning and Risk Mitigation 

A health insurance cover is a safety net and doubles up as a risk management tool as well. As mentioned, medical crises and treatment can wreak havoc on the life and finances of persons. Health insurance plans protect individuals with a financial cover in the form of the sum assured. Policyholders can plan their spending, keeping finances aside for health insurance premiums, and remain stress-free with regard to medical emergencies.  

Tax Saving Benefits 

In addition, to keeping one safe with a health cover, health insurance policies also offer tax reductions/savings. Health insurance premiums allow Persons under the age of 65 years to gain tax deductions up to Rs.15000 in compliance with section 80D of the Income Tax Act. With effect from the assessment year 2016-2017, this exemption has been increased to Rs.20000 annually, if the premium includes an extra amount of Rs.15000 towards the medical coverage of parents.  

For senior citizens paying the premium on an insurance policy, the exemption on tax was Rs. 20000, but since the assessment year 2016-17, this exemption is increased to Rs.30000. As per the rules, the younger insured individuals can claim separate deductions, if the health premium is paid on behalf of their parents by them. Under Section 80D of the Income Tax Act, the allowed deductions on premiums apply to individuals, family and senior citizens. 

Efficient and Effective Medical Treatment 

All medical coverage providing companies enlist and create a network of health care centres and hospitals. When persons buy health insurance, they gain access to cashless hospitalization at any of the network hospitals, thereby enabling the policyholders to get advanced quality medical treatment in a planned and structured manner. When a person falls ill, especially in the case of critical illnesses, gaining the best treatment in top hospitals becomes a priority, which is fulfilled through adequate health plan coverage.  

The policyholder must check which hospitals are empanelled and seek admission in any of the mentioned hospitals during a medical emergency. It is also essential to inform the insurer or the third party affiliate (TPA) about the hospitalization and possible nature of the treatment. This must be done within the stipulated time frame. Following this, the insurance agency or TPA would contact the clinic or hospital to understand the type of medical treatment being provided. Thereafter, either the insurance agencies clear the medical bills as part of the cashless facility scheme, or policyholders could make payment of the bill to be reimbursed later. 

The benefits of health insurance are many both now and for the future. It acts as a financial backup and safety net. It is the much needed financial support at the time of medical exigencies. Remember for the well-being of your family that health insurance is a ‘Must Have and not a choice’.