What is The Importance of Health Insurance In Personal Life

By | September 17, 2022

What is The Importance of Health Insurance In Personal Life

Many people tend to overlook health insurance. This leads to several problems in life. Here are some of the biggest reasons why health insurance is so Big:

  • Health care cost savings
  • Broad and comprehensive coverage
  • Tax benefits
  • No Claim Bonus (NCB)
  • Floater Family Policy
  • Hedging against health inflation
  • Overall wealth improvement

Understanding the importance of health insurance will help you get a clearer idea of ​​your insurance needs and choose the best health insurance plan for you. Before we dive into each of the indicators, let’s try to understand what health insurance is.

Health insurance serves as financial protection against medical expenses in case of unfortunate events such as medical and accidental accidents.

As the common vernacular rightly says, “Health is wealth”, it is important to follow a healthy lifestyle with a great diet and proactive physical activities.

However, many times even the healthiest individuals may need medical attention for a variety of reasons. So that similar situations do not ruin you, it is important to insure your health and that of your loved ones.

What is The Importance of Health Insurance In Personal Life

Why health insurance?

With increasing medical inflation and advances in diagnostic technology, the cost of treatment has become extremely prohibitive. In these difficult times, it is crucial to be financially stable in order to get the best and most affordable medical care. Even a short visit to the hospital can put a huge strain on your finances.

Here are some critical points to help you understand the importance of health insurance:

1. Saves health care costs

Whether it’s our annual physical, emergency care, surgery, prescription drugs, or sometimes even your dental expenses, medical services can get pretty expensive at times. It is better to realize the importance of health insurance before your financial health is affected by high medical bills. Health insurance covers part of your bill according to the insurance conditions.

2. Broad and comprehensive coverage

In addition to hospitalization expenses, health insurance also covers expenses before and after hospitalization according to the terms of the insurance contract. These generally include expenses associated with doctor visits, x-rays, medical reports, etc. Most health insurance plans also cover transportation costs with a limit to cover ambulance expenses. The insured will therefore be stress-free. The best health insurance plans also provide coverage for day care expenses and home hospitalization expenses.

Also Read – Niva Bupa Health Insurance Reviews and How To Apply

3. Tax benefits

The amount of health insurance premium paid is available as a deduction under section 80D of the Income Tax Act, 1961. The maximum amount of deduction varies according to the provisions of the Act as per applicable law. It should be noted that an individual does not get this tax benefit in the case of group plans provided by their employers. Thus, understanding the importance of insurance not only provides robust financial protection but also offers various tax benefits.

4. No Claim Bonus (NCB)

Health insurance is not only cost-effective, but also increases your coverage in a claim-free year. Simply put, if there is a year in which you do not claim any cover, the sum assured will be increased or the premium cost will be reduced for the next year. The insurance company is basically rewarding you for being more careful all year and not reporting any claims in a particular year.

5. Floater Family Policy

Choosing a plan for the whole family under the same policy can ensure that each member gets the best medical care. In the event of health complications affecting any member of your family, you will not have to worry about financial costs. These policies are also cost-effective with comprehensive health coverage for the entire family. Getting an idea of ​​the high cost of healthcare and how it can affect your family financially is enough to understand the importance of health insurance for your family.

6. Hedging against health inflation

With each passing year, the cost of medical expenses also increases exponentially. In fact, health inflation is much higher than regular headline CPI inflation. Managing health care expenses in post-retirement becomes difficult, especially with serious illnesses or long-term care that you may encounter in old age. So insurance can take care of these expenses. You can also save money for post-retirement goals like travel, home building, etc.

Also Check – What Is ICICI Lombard Health Insurance and Its Types

7. Overall health improvement

It helps you stay healthy. Regular check-ups, immunizations, tests and screenings are necessary to prevent the disease at a later stage. The good news is that all health insurance companies now provide you with certain preventive services at no or minimal cost. Such screenings and tests are eye-opening and categorically question the habits affecting their health. You can also take preventative measures to improve your overall health.

We hope these benefits of buying health insurance help you better understand the importance of health insurance.

The sooner the better

There are many benefits to opting for health insurance at an early age, especially if you opt for it at an early age. At a young age, you are fitter, healthier and less prone to disease. Therefore, the cost of insurance at a young age is much lower and the benefits will continue even as you get older.

In addition, you will be offered more comprehensive coverage alternatives. Most plans have a pre-existing waiting period that eliminates coverage for pre-existing conditions. This period ends while you are still young and healthy, hence you get the benefit of a comprehensive insurance policy that will prove useful if you fall ill later in life. Also, your NCB can accumulate and culminate in higher coverage if you start early.

Obviously, buying health insurance at a young age allows you to get more health insurance benefits. Here are some of the other benefits of buying health insurance early:

  1. Low premiums: In most health insurance plans, the premium depends on your current age. So buying health insurance at a young age allows you to have great health insurance at low premiums.
  2. Better Financial Planning: It is very important to realize the importance of health insurance at a young age as it allows you to better plan and manage your finances. With adequate health cover to take care of any medical emergency, you can focus on investing in other long-term financial instruments.
  3. Longer tenure: Most health insurance products have an upper age limit. This means that you will not be able to enjoy the benefits of health insurance if you buy it later in your life. By understanding the importance of insurance at a young age and buying health insurance, you will be able to enjoy the benefits of the plan for a longer period of time without worrying about age limits.
  4. Lifetime Renewal: You can avail the benefit of lifetime renewal of your health insurance plan and thereby enjoy extended coverage. Thus, you get comprehensive health coverage for life by opting for lifetime renewal of your policy.
  5. Lower chances of rejection: You have fewer health complications when you are young, which means the chances of your health insurance company rejecting you are very low.
  6. No Claim Bonus: As you know, most insurance providers provide their policyholders with a ‘No Claim Bonus’ if there are no claims in the previous policy year. Buying health insurance at a young age allows you to take advantage of the cumulative bonus because you will most likely be renewing your policy every year. As a result, the accumulated bonus gives you the added benefit of higher sum assured and coverage, which is very beneficial in later stages of life. The no claims bonus ranges from 5% to 100% of the sum assured for most health insurance plans.

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