One of the facts which we often ignore is that life and health are the most important factors in any financial planning exercise. If you are there living a healthy life then only you can save for goals. Well financial responsibilities in case of someone’s demise can be provided for, by having sufficient life insurance with some basic calculations, although there are no calculations to find out how much of health insurance is enough.
Best On-Call Financial Advisory Portal, MoneyMindz.com talks about the importance of health insurance. Basically, there are 3 different types of health policies- one is the basic mediclaim which is common to us, which covers the hospitalization expenses, the second is critical illness policy which is meant to cover the income loss of insured in case of diagnosis of critical illnesses and the third one is the Personal accident policy which again is meant to cover the income loss in case of disability.
It is important to have a health insurance is to manage the rising healthcare and hospitalization expenses that may be due to illness, accident or may be due to some major health problem. If you are hospitalized then your health insurance policy is there to take care of the treatment expenses if your stay in hospital is more than 24 hrs. Such policies also cover some predefined treatments that may require full day hospitalization and also comes under day care surgeries.
You may increase your base cover within the policy or total cover by a super top up plan. You can buy a specific illness, personal or can buy one which covers a list of critical illness. Some pay you at diagnosis of illness at different stages of treatments and some want a Specific severity to your illness. Some covers all day care surgeries and some cover a big list of surgeries.
Thus, even if we want to cover critical illnesses, then also we need higher hospitalization cover first. Regarding Income loss, I am of the view that one should maintain health emergency fund separately, to take care of the hospitalization expenses (when exceeds the health insurance coverage) as well as Income loss. Until the time you accumulate the same, you may buy some coverage of Critical Illness policy.
One of the important constituent of personal health insurance portfolio is personal accident policy cover. Such policy covers the income loss due to disability (permanent or partial) caused due to the accident. The major conditions laid down in the policy wordings of personal accident policy is that in this, insurer watch insured for 365 days after happening of incident and in case insured do not get recovered, and also as per understanding of insurer that there’s no hope of improvement, then they will pay the insurance amount decided as per policy conditions.
It’s not only about insurance or costs, but it’s more about health and wellness. Hospitalization is a depressing experience, and yes if it brings some unmanageable expenses too, then it creates disorder in personal finances.
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