Health Insurance constitutes an important part of financial planning. With medical costs heading north and the unpredictability about what lies in the future, Health Insurance should top your financial planning agenda to save you from falling into any financial crunch. A financial objective can only be achieved if there is a good health to support it. Therefore, it is advised that a Health Insurance policy should be availed early in the career to mitigate the financial obligation arising out of health risk.
Let us take a look at some of the benefits of having a Health Insurance policy.
Medical Expenses And Funds
It takes many years of hardship to accumulate savings and accomplish your financial objectives, but a medical emergency has the potential to squeeze out all your funds in one shot. Nothing is more important to a person than their own life. Often, a medical emergency comes unannounced, making it difficult to arrange for expenses all of a sudden. You can easily tackle such financial setbacks arising due to medical emergencies by getting a health policy.
Health Insurance policy should be of adequate cover size, it should protect you from all sorts of illness and the cover tenure should be of maximum duration.
Let us understand this with an example. Imagine a 30-year-old man without a Health Insurance plan falls sick and has to spend Rs 10 lakh on his treatment for an illness. Considering that he spends Rs 5 lakh from his savings and takes a loan of Rs 5 lakh for rest of the amount. After recovery, he would first need to repay the debt and thereafter accumulate the fund to meet his financial goal. So, it’s a double setback for him.
Instead, a health policy of Rs 10 lakh would have helped him save his hard-earned money. The premium for such an individual policy of Rs 10 lakh would cost around Rs 7,000 to Rs 10,000 per annum, while family floater policy for two adults and two children would cost around Rs 15,000 to Rs 20,000 per annum. So, by spending a very nominal amount one can get the financial support needed during an emergency for themselves and their family.
Health Insurance also works as a tax management tool. The premium that you pay for getting the Health Insurance for yourself or your family, including insurance for your parents, gives you the benefit of tax deductions under section 80D. Maximum ceiling for such deduction is capped up to Rs. 60,000. So, if you are in the 30% tax bracket, then the deduction benefit could be up to Rs. 18,000 (30% of Rs. 60,000).
To Achieve Your Retirement Goal Without Hassle
Imagine what would happen to your financial planning if you fell ill and exhausted all your savings to pay for the treatment? It would put you in a financial jeopardy as you near your retirement. Health Insurance protects you and your family from huge medical expenses, backing you in achieving your financial planning objective.
To Cover Your Post-Retirement Health Treatment Cost
Post retirement, it becomes difficult for an individual to pay the medical bills due to limited income. In such situations, Health Insurance plays a crucial role by providing financial support to the elderly in terms of hospitalisation and treatment.
The size of your health policy should be based on your family’s health profile and family history of medical ailments. The health cover should also be updated as per prevailing hospitalisation and treatment cost. An extensive research is recommended before availing a Health Insurance policy, considering your needs, income and budget. Always check for multiple options and read the fine print before taking a policy.
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