We live in a period where health issues see an upsurge with each passing day. A major health emergency can blow a hole in a person's pocket and, in most cases, exceed their savings. The significance of health insurance has become inevitable in such a situation.
In a moment of crisis, no one wants to be reliant on others to cover healthcare costs. As a result, there is an increasing need to be financially ready for such events as soon as feasible.
What is Health Insurance?
Health insurance is a sort of insurance that covers a person's surgical and medical costs. It compensates the insured individual's care provider directly or reimburses actual costs as a result of injury or illness. Hospitalization, medicine, and doctor/physician fees are examples of medical expenses.
It is designed to cover your medical expenses in the event of a medical emergency. Simply put, the insured pays regular premiums to the insurance provider in exchange for financial assistance.
To comprehend the significance of health insurance, you must first understand how it functions.
When you purchase health insurance, you sign a contract that obligates the insurer to compensate you financially in the event of a medical emergency. The terms of the insurance policy do not have to be confined to emergencies; they can also cover routine exams and hospitalization bills.
Insurers have partnered with a few hospitals to provide policyholders with conventional medical treatment. You may be eligible for benefits such as cashless care when you visit a connected hospital, depending on the insurance restrictions. When you're in the midst of a health crisis, health insurance is extremely important because it allows you to focus solely on your recovery.
Health Insurance for Financial Stability
You are confident in your financial situation when you are financially stable. You are not concerned about paying your bills because you know you will have enough money. You are debt-free, have money set aside for future goals, and also have sufficient savings to cover emergencies.
Being financially stable does not imply being wealthy. It isn't even a number. It's more of a state of mind. You don't have to worry about money when you have financial stability, and you can devote your energy to other aspects of your life.
Health is a vital component when it comes to Financial Planning because if you have any health-related concerns or get a sickness, the cost of medical care will deplete your savings and leave you with nothing to ensure your future.
To avoid these situations, and if you truly do not want to drain your savings, you should consider purchasing a health insurance policy. If you do not protect yourself by purchasing a health insurance policy, you risk losing your whole savings in a matter of minutes.
Here are some of the ways Health Insurance helps you with Financial Stability:
1. Aids in the reduction of Medical Costs
One of the most common problems in the country is the inability to obtain high-quality medical care due to financial constraints. Medical costs have risen in the last ten years and will continue to rise in the future.
Even the basic cost of hospitalization has risen by more than 10%, indicating that the costs of medical procedures will be significantly higher. A rise in medical costs can deplete your savings.
If you do not have an investment plan in place to cover medical expenses, you may end up spending all of your savings on a medical procedure. You can protect your savings by purchasing a health insurance policy. A health insurance policy can assist in dealing with such scenarios.
2. Helps in planning your Retirement
One of the most important advantages of health insurance is that it aids in retirement planning. This will be useful when you retire. As you get older, your income decreases, and the risks associated with medical emergencies arise.
A health insurance plan will cover any medical emergency, ensuring that your savings are not depleted. Furthermore, the insurance plan is renewable for life, which means you can plan your retirement well while saving money for a medical emergency or illness. A health insurance plan will cover you even if you are above 90 years old.
3. Tax Benefits
Tax savings are an essential component of financial planning. Aside from selecting the right investment methods, you may want to try and reduce your tax liabilities when planning your annual finances.
If you have a health insurance policy, under Section 80D of the Indian Income Tax Act the premiums you pay are tax-deductible. Section 80D allows you to deduct money spent on health and health insurance, and it is very important in your tax planning and personal finance. The deduction is as follows:
. Individuals will receive Rs. 25,000 for themselves and their families.
. If the person, as well as their partner, is 60 years of age or older, the deduction is Rs 50,000.
. An additional deduction of Rs. 25,000 is available for health coverage of both the parents (dependent or not) if they are less than 60 years old, and Rs. 50,000 if they are 60 years old or older.
. Medical expenses up to Rs 50,000 shall be allowed for non-insured individuals who are above 80 years
. This section allows Rs. 5000 deductions for the payment of preventive health check-ups for the individual or his family members.
4. Coverage for your entire family
There are also health insurance options available for the members of your family. Furthermore, if your parents are elderly, you can invest in senior citizen policies that will cover their medical needs.
When every member of your family is covered by health insurance, no member's medical needs will have an impact on your financial planning. You would be able to cover the medical bills without breaking a sweat.
Getting health insurance is very important for any person, regardless of their medical status. It's an essential component of someone's financial wellbeing. And with the right coverage, it can be incredibly beneficial.
