The global health scenario has undergone a tremendous change, especially in the post-covid world. Individual health as well as the costs involved in medical expenditures have become highly unpredictable. Whether it is a minor surgery, a sudden hospitalization, or prolonged treatment for a critical illness, one thing is certain medical bills can quickly derail your financial plans if you are not prepared enough.
This is why understanding the role of health insurance is crucial, and it is not something that just acts as a protective shield for your health, it is a strategic financial tool that can also safeguard your long-term wealth. In this blog, let us decode why health insurance is essential and break some myths that often hold people back.
Rethinking Health Insurance: Where Most People Slip
Most people take some superficial financial steps towards protecting their health. Many simply buy a plan, rely on an existing one, or just assume they are covered and they will not need any such plans, and that is where they slip away and fall towards the financial risk. Let us delve into the realities.
A. Life Cover is not Health Cover
Many people believe that having life insurance is enough and health insurance is not really required. But the fact is, both are completely different and do not complement each other. The purpose of life insurance is to protect your dependents in case of your loss, whereas health insurance is meant to protect you and your family from financial burden during medical emergencies.
Imagine an unexpected event where you suddenly need a large amount like ₹ 20 lakhs for treatment. If you use your savings, you are weakening your financial stability, and if you do not have that money, you are putting yourself at serious risk. Whether you have money or not, the absence of a health insurance plan will affect you and erode you financially.
B. Employer Health Insurance: A Good Start, but Not Enough
Many people assume that the health insurance provided by their employer is enough and do not bother to check whether they actually have sufficient protection or need a private plan. However, such coverage is often limited and may not meet your real needs in today’s high-cost healthcare environment.
Even if the coverage seems sufficient now, it ends the moment you leave the job or change employers, leaving you unprotected. Starting from scratch at that stage can be difficult, as you may have to deal with higher premiums, waiting periods, pre-existing disease restrictions, and many other complications.
A personal plan ensures uninterrupted protection no matter where you work.
C. Starting Early Pays Off
When you are younger, you are generally healthier, which makes it easier to get a policy with lower premiums and fewer medical checks. As you age, your medical profile changes, and insurers view you as a higher risk, which can lead to higher premium costs or even rejection for coverage. Starting early also helps you to complete waiting periods for pre-existing diseases well in advance, ensuring full protection when you truly need it. Hence, early planning not only saves money but also builds long-term security.
D. Today’s Money, Tomorrow’s Penny
Tomorrow’s value of today’s money is where most people slip away, not just in investments but also in insurance and future planning. For instance, today’s ₹15 lakhs will be worth only in the range of ₹4 to ₹5 lakhs after 20 years at current inflation levels. The hospital bill for a surgery today might only cover a few tests in the future. It is not just wise but necessary to aim for a higher coverage to ensure that rising costs do not outpace your protection.
E. Health Insurance: Not a Tax By-Product
Many people treat health insurance as just another way to save on tax, buying policies hastily at the end of the financial year. But in reality, health insurance deserves primary attention as a core part of health and financial security, not as a last-minute tax-saving tool or a byproduct of something else. However, with the introduction of the new tax regime, this trend is fading away, and rightly so.
Conclusion
Before saying “I am covered with health insurance,” it is important to clear the key myths discussed above. Further, health insurance offers a wide range of choices, such as riders, add-ons, top-ups, and more, which need careful evaluation, and we will be covering these in detail in our upcoming blog.
Till then, take a moment to:
- Review your existing policy, coverage limits, and exclusions.
- Evaluate if it is suitable for your family’s current and future needs.
- Identify if you feel any missing coverage.
- Check claim procedures and hospital network options in your existing policy.
Take these initial steps now to strengthen your protection and be ready for deeper, actionable insights in our upcoming blog.
At Advith, our Personal Finance Team can help you assess, plan, and secure your coverage effectively. Because protecting your wealth is not only about saving and investing; it also means being prepared for uncertainties.
Ready to review your health cover? Talk to our Personal Finance Team today!
Contributors:
N Srilatha Bhat – Linkedin
Kuldeep Sarma – Linkedin
Poonam Vernekar – Linkedin
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