You never know when a medical emergency may arrive, exhausting your savings and financial planning. Considering the increasing healthcare costs in India, it is essential to get health insurance for you and your family. It can safeguard you from a significant financial need that may arise due to sudden medical conditions.
You can buy health insurance online without dealing with any insurance brokers to manipulate your decision.
However, before getting health insurance, you must understand the impact of healthcare expenses on your long-term financial goals. This will help you choose the right policy that aligns with your financial and health needs.
How Medical Expenses Can Affect Your Financial Goals?
Here are some of the ways medical expenses are affecting your financial goals:
● Exhausting Your Savings and Investments
A medical emergency can drain your savings and investments, which were kept aside for financial goals like children’s education, buying a house, retirement, etc. With rising medical costs, even routine health checkups like medicines, doctor visits, and minor diagnostic procedures can exceed your monthly budget. This will affect your savings and investments for the future.
● Increasing Debt Burden
High out-of-pocket medical costs can result in debt if proper planning isn’t done. Many families turn to credit cards or personal loans to pay for long-term treatments, surgeries, or hospital bills. This affects your creditworthiness and long-term financial health, increasing your financial stress and taking money away from wealth-building endeavours to pay off debt.
● Disrupting Your Retirement Planning
Medical inflation and the increased likelihood of health issues with age mean that retirees often face higher healthcare costs. If these are not planned for, you may need to dip into your retirement savings, jeopardising your financial independence and standard of living during your golden years.
● Affecting Family Finances
Medical emergencies don’t just impact individuals—they can affect entire families. Caring for ageing parents or dependents with chronic illnesses can introduce new financial challenges, requiring you to reallocate resources and potentially delay or scale back personal financial goals.
● Psychological Stress
The financial strain from medical expenses can also take a toll on mental health, leading to anxiety and reduced productivity. This, in turn, can further impact your earning potential and overall financial well-being.
How Can the Right Health Insurance Policy Help?
The right health insurance policy acts as a financial safety net. It shields you from rising medical costs and helps you stay on track with your long-term financial objectives in the following ways:
● Comprehensive Coverage for Medical Expenses
Health insurance covers a wide range of healthcare costs, from routine checkups to major surgeries and long-term treatments. By paying a regular premium, you protect yourself and your family from sudden, significant expenses that could otherwise derail your financial plans.
● Cashless Treatment and Quality Healthcare
Most health insurance policies offer a network of hospitals where you can avail of cashless treatment. This means you don’t have to pay upfront and wait for reimbursement; the insurer settles the bill directly with the hospital, ensuring timely care without financial stress.
● Protection Against Medical Inflation
Medical costs are rising faster than general inflation. Health insurance helps you keep pace with these increases, so you don’t have to dip into your savings or investments to pay for expensive treatments.
● Preventive Care and Early Detection
Modern health insurance plans include preventive healthcare benefits like annual checkups, screenings, and vaccinations. Early detection can prevent larger health issues and expenses down the line, preserving your financial resources.
● Tax Benefits
Under Section 80d of the Income Tax Act, premiums paid for health insurance policies are eligible for tax deductions of up to ₹25,000 per year. For senior citizens, the deduction limit is up to ₹50,000 annually, providing additional financial relief and incentivising prudent planning.
Tips to Buy the Right Health Insurance Policy
Selecting the right health insurance policy is necessary to maximise your financial protection. Here are some of the tips that you can follow while selecting a health insurance policy:
1. Assess Your Needs and Budget
Start by evaluating your current health status, family medical history, and potential future healthcare needs. Then, consider the number of dependents, pre-existing conditions, and your premium budget.
2. Compare Plans Online
Buy health insurance online to access various policies, compare features, and read customer reviews. Online platforms often provide detailed information on inclusions, exclusions, and claim processes, helping you make a transparent decision.
3. Use a Health Insurance Premium Calculator
A health insurance premium calculator helps estimate your premium based on age, coverage amount, and policy type. This allows you to balance affordability with adequate coverage and avoid being underinsured.
4. Check Coverage and Exclusions
Go through the policy document carefully to understand the inclusions and exclusions. Look for coverage of hospitalisation, day-care procedures, pre- and post-hospitalisation expenses, and critical illnesses. Pay attention to waiting periods, sub-limits, and co-payment clauses.
5. Prefer a Cashless Hospital Network
Choose a policy with a wide network of cashless hospitals near your residence or workplace. This ensures you can access quality care without worrying about arranging funds in an emergency.
Insurers like Digit Insurance provide access to an extensive cashless hospital network across India, making it easier to receive timely treatment without financial strain. Additionally, Digit Insurance reported over 90% cashless claim processing and real-time claim updates via WhatsApp in their latest Transparency Report, ensuring that you get timely coverage and minimal out-of-pocket spending.
6. Opt for Family Floater Plans
For individuals having dependents, a family floater plan can offer comprehensive coverage for all members under a single policy, often at a lower premium than individual plans.
7. Consider Buying Add-Ons and Riders
Depending on your needs, you can enhance your coverage with add-ons like critical illness coverage, maternity benefits, or personal accident riders. You can buy this additional coverage by paying a nominal extra charge on top of your monthly premium for comprehensive health insurance.
8. Review Claim Settlement Ratio and Customer Service
A high claim settlement ratio and responsive customer service are indicators of a reliable insurer. Check these metrics before making your final choice.
Medical expenses can profoundly impact your long-term financial goals, from exhausting savings and increasing debt to disrupting retirement plans and overall family well-being. Planning for healthcare costs wisely and choosing the right health insurance policy can safeguard your financial future and focus on achieving your dreams.
You can buy health insurance online and use tools like a premium calculator to find a policy that fits your needs and budget.