Worried Debt Trap? Invest | Personal Health Insurance Policy

To say that medical expenses are rising is putting things mildly. It is rather an understatement as medical inflation is overtaking the average retail inflation in India. As per reports, the retail inflation in India was 3.4% in 2018-19 while medical inflation during the same period stood at 7.14%. In June 2021, retail inflation was 6.26% while medical inflation stood at 7.7%.

Rising medical costs are, thus, a curse, especially for the middle-class that faces a financial crunch if medical contingency strikes. As per the World Bank’s data, the out-of-pocket medical expenses in India stood at 62.7% in 2018. The 77th edition of the All India Debt & Investment Survey also found that medical treatments comprised 11.9% of the rural household’s debt while for urban households, the figure stood at 12.7%. 

Medical contingencies, thus, have the potential to cause financial hardships and might even land you in debt, as the numbers indicate. It is, therefore, imperative to make a provision for facing medical expenses if you were to avoid medical debt. It is in this context that a health insurance plan becomes useful.

A health insurance policy covers the medical expenses incurred in case of an injury, illness or even the COVID pandemic. It, thus, acts as a financial provision for medical emergencies and can help you avoid a debt trap. 

If you are employed, chances are that you might be insured under a group Mediclaim plan. However, the plan might not prove sufficient in covering your medical costs. Furthermore, if you don’t have a group health cover, a personal health plan becomes all the more important. 

Here are some reasons why a personal health insurance plan can be your financial savior in medical distress –

Choice of plans

Independent health insurance plans come in different variants. Have a look –

  • Individual health insurance plans that cover a single individual
  • Family floater health plans that cover the family members in a single plan
  • Senior citizen health insurance plans for the elderly
  • Top-up and super top-up health insurance plans that help in enhancing an existing coverage at lower premiums
  • Fixed benefit health insurance plans, like critical illness, personal accident or hospital daily cash plans. These plans pay a lump sum benefit in the case of a claim. 

An indemnity health plan (individual, family floater, or senior citizen) is a must to cover your medical bills. Add to it a critical illness policy and you can enjoy a comprehensive scope of protection in emergencies. 

Holistic coverage

The coverage under indemnity health insurance plans is comprehensive. Both inbuilt and optional coverage features provide you with holistic financial protection. The inbuilt coverage benefits ensure coverage for different types of medical expenses while the optional benefits help you customize the policy as per your needs.

Some of the coverage benefits that you can avail yourself in health plans include the following –

  • Inpatient treatments
  • Ambulance charges
  • Domiciliary treatments
  • Daycare procedures
  • Organ donor treatments
  • AYUSH coverage
  • Maternity cover
  • Sum insured restoration
  • Free health check-ups
  • No claim bonus, etc.

These coverage features make sure that most of your medical costs are covered so that your out-of-pocket expenses reduce and you don’t resort to debt. 

Cost-effective

When it comes to the cost factor, you have nothing to worry about. Health insurance premiums are affordable. Moreover, insurers allow you to pay the premium in installments (monthly, quarterly or half-yearly). This facility further makes the premium affordable and allows you to enjoy the plan’s coverage. 

Tax benefits

If the coverage and financial security are not enough, tax benefits lend an additional benefit to personal health insurance plans. You can claim a deduction of up to Rs.1 lakh on health insurance premiums and lower your tax liability. Considering the highest tax bracket of 30%, this reduction in tax liability helps you save Rs.30,000 in taxes. What more could you ask for?

Medical contingencies might arise at any time as the pandemic has taught quite well. If they do, you need a financial asset to help you deal with the expensive medical costs. A personal health insurance plan proves to be this asset that shoulders the medical costs sparing you from a possible financial crisis. You can, thus, avoid loans for your medical needs and avoid falling into a debt trap, especially when the medical costs are too high to afford. 

Even if you are healthy, invest in a comprehensive health insurance plan. Prevention, after all, is always better than cure, isn’t it? To know more check http://blog.oneassure.in

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