When a person is hospitalised as a result of an accident or illness, personal health insurance can be helpful. Personal health insurance policy can be purchased for oneself as well as someone you have an insurable interest in. Insurable interest in simple terms is your interest in the person you are insuring. You can therefore buy a policy for your parents or family.
There is a wide variety of personal health insurance plans on the market, each with its own set of benefits. The premium under the personal health insurance plan depends on the age of the eldest member of the family, sum insured required, health condition of the proposer, waiting periods, zone of residence etc. The premiums for health insurance plans increase as one gets older. This is due to the higher mortality ratio in aged people. That said, changing lifestyles are causing early deaths due to diseases such as heart attacks, diabetes, hypertension, cancer etc. Therefore, purchasing individual health insurance at a young age is recommended. If you have not taken a personal health insurance plan till date, now is the best time to take it. To get the best health insurance plans, please schedule a call with one of our insurance experts to help you make a decision about which plan to buy.
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Here’s a list of 5 Benefits of Investing in Personal Health Insurance
1. Tax Benefits:
The Government of India allows for income tax exemption for the premium paid towards health insurance under the Section 80D of the Income tax act. The move was aimed to increase the health insurance penetration in India as many people used to feel that the amount spent on health insurance premium was a waste if it was not utilized for hospitalisation. The point people fail to understand here is that the health insurance premium should be considered as an investment towards your future healthcare. Under the Income Tax Act, health insurance premiums paid for oneself, one’s spouse, dependent children, and dependent parents are eligible for exemptions up to Rs. 1 lakh. If the parents are senior citizens then there would be other benefits that can be availed under the income tax act for the health insurance premiums paid.
2. Saves from Financial Distress:
Have you ever faced a sudden hospitalisation situation where you had to arrange for a large amount of funds within a short period of time? If yes, then you would understand how difficult it is to arrange funds on a short notice. Imagine if the hospitalisation happened at odd hours or in some different location far from your base location! What if your parents aren’t tech savvy and depend solely on cash. How would they settle hospital bills? Having a family health insurance plan with better coverage saves you from such situations. Health insurance also reduces your dependence on illiquid assets like Fixed Deposits, Gold, or houses. Health insurance also saves you from going into debt as the hospital bill is paid by the insurer.
3. Cashless Hospitalisation Anywhere:
The other advantage of a health insurance policy is that you can avail cashless hospitalisation anywhere in India without the fear of rejection. Insurance companies have tie-ups with hospitals all over the country, so in case of emergency or accidents you can get admitted to any hospital in the nearby area and avail cashless hospitalisation. So there is no need for people to worry while traveling to different places as the health insurance policy would be valid in any part of the country. Cashless hospitalisation requests are normally approved within 3 to 4 hours. Once the claim is approved the insured can avail treatment in the hospital and the funds would be transferred by the insurance company to the hospital directly.
4. Attractive Returns:
Health insurance is a major component of the financial planning for most astute financial planners. Health insurance premium is generally calculated as a percentage of the sum insured under the policy. Higher sum insured leads to higher premiums. For example, let us assume a person aged 30 years purchased a health insurance policy for Rs.10 Lakhs sum insured and is paying a premium of Rs.12k per year. Let us assume that the person is hospitalised in the first year itself and has incurred a hospital bill of Rs.5 Lakhs, which would be settled by the insurance company. In this case the customer has availed a return of nearly 42 times the premium he paid. Had he paid the health insurance premium for 10 years continually without any break, he would have spent around Rs.1.2 Lakhs maximum as the premium payment but would have got a cover of up to Rs.50 Lakhs.
So, while this is not an appropriate way to look at health insurance, the math geeks can actually look at the returns.
5. One Family-One Cover:
Personal health insurance policy can also cover all the members of the family. This eliminates the need to take different health insurance policies for different members. The other advantage offered by the insurance companies is that each member of the family can be covered for a different sum insured or the entire family can be covered for a single sum insured. For instance a family of 6 including self, spouse, 2 dependent children, dependent parents can opt for an individual sum insured in which each member would have their own sum insured or family floater sum insured in which all the family members would be covered for a single sum insured.
That is the list of 5 benefits which are on top of the obvious benefit of payment toward your hospitalisation needs.