Health Insurance – If you don’t have it yet, you surely need it

Let’s get the context on Health Insurance first before we delve into its benefits.
 
When you were in school, you would have probably learnt this from your teacher…
 
“If Wealth is lost, nothing is lost,
If Health is lost, something is lost, but
If Character is lost, everything is lost.”
 
Well, we cannot advise you about your character but we can surely tell you from what you just read that Health means something in our lives. Something that is more important than the money we earn. Something which if lost, can take some effort to regain. And sometimes, however hard you try, you may never regain it.
 

 
With those opening words, we hope we have your fullest attention now. You will need it because if you do not have a health insurance cover yet, this is not casual reading.
 
There was a time in the 60s, 70s and 80s, when cures for some illness were just not found, or not available in India. Since then, times have changed, and drastically so. There are now both preventive and curative medical technologies available in many cities and towns in India. And this supply of good healthcare is growing exponentially. There are lots of good doctors now, experts in their respective fields, trained on latest machines, and interacting with the best doctors and surgeons around the world. Medical infrastructure is getting much better. Medical research is getting deep in niche areas. Surgeries are getting less invasive and new techniques are spreading all around the world through videos. Almost anything in the body can be tested and analyzed using modern equipment. Organ transplants are growing in awareness and numbers. Recovery at hospitals is getting less painful, speedier and better. All in all, thanks to cutting-edge medical innovations, we are all living longer.
 
But all this does not come cheap. There is a price to pay for consultation, check-ups, tests, surgeries, medical conveniences and even post-operative care. And these prices fluctuate a lot, mostly rising by the day because of capital cost of purchasing equipment running on the latest available technologies. If there is a cure available for a medical problem, you cannot ignore it like you could have once upon a time. You will need to incur the cost of doing it – that’s where mediclaim or health insurance comes in. If you do not have health insurance, you may still be able to manage out-of-pocket costs but the cost of a major illness or injury can be devastating. According to a Dec 2012 McKinsey report on Healthcare in India, a whopping 60% of medical bills were paid as out-of-pocket expenses in 2010. Yes, you may have the resources to pay your medical bills, but when there is already something like health insurance why would one want to dig into one’s savings (and sometimes even one’s own assets) to pay for high hospital bills?
 
Here’s a summary of medical costs incurred for various treatments in India, as per General Insurance Public Sector Association (GIPSA), a body of four public sector general insurers – New India Assurance, United India Insurance, National Insurance Company and Oriental Insurance Company. Please note that actual rates can be 50-100% higher than GIPSA rates depending on city, hospital, doctor charges, kind of treatment, medical equipment and consumables used, etc.
 

So a heart disease, a stroke, a kidney disease or a head injury from an accident can reduce your financial worth by lakhs of rupees. We are aware of cases that have led to medical bankruptcy e.g. having to sell off the house to get money for treatment of a serious heart condition.
 
Health insurance is also very inexpensive. So if you are thinking that you will quote price as the reason to not buy health insurance, don’t even try.
 
We did not forget that you could have yet another reason not to buy health insurance – health insurance from your employer. That’s good news. But what happens if you discover that the health condition you have is not covered by your employer’s group insurance provider? Or that it is but only with a limit that is just not enough? What about dependents – what if they are not covered? And what if you later on in life get a condition that cannot be covered all even if your employer wants to? Avoid these situations – get a proper health insurance policy for yourself.
 
Ah yes, we almost forgot – all premiums you pay for your Health Insurance are tax-exempt under Section 80D for up to Rs. 15,000 in a financial year.
 
The problem is that we don’t think of health insurance till the day we actually need it. And sometimes, that becomes too late. The best time to buy health insurance is early in life when you are actually the most healthy – around 30 years of age. And if you are married and have children, get a health insurance plan immediately if you do not have one already!
 
Health insurance is not a luxury but a necessity. Paying from your pocket can result in eroding of your hard-earned savings. The best way to protect it is to buy adequate Health Insurance. No two ways about it. Start with a basic check of Claims Settlement Ratio for Health Insurance in India.