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How Health Insurance Keeps You Rich?

IndianMoney.com Research Team | Posted On Tuesday, August 06,2019, 04:36 PM

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How Health Insurance Keeps You Rich?

 

 

You must realize the importance of health insurance, which is an integral component of financial planning. Health is wealth. It means there is nothing above a healthy life. Health issues are common nowadays, due to hectic lifestyle. The rising levels of pollution, tight work schedules, and the poor quality of food have raised the risk of health issues.

Treating critical illness is expensive. You may find it difficult to arrange funds for medical emergencies. To be on the safer side, availing a health insurance plan is a must.

Health insurance safeguards you and dependents against uncertainties. It also safeguards your wealth in several ways.

Want to know more on Health Insurance? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

How Health Insurance Saves Your Wealth?

Be Ready for the Worst 

You could fall prey to a serious illness like diabetes, asthma, cancer, heart diseases and stroke. Check if existing health insurance policy covers all types of chronic diseases. If not, cover the basics while renewing an existing health insurance policy or availing a new one.

Selecting the best health insurance is crucial. Opting for critical illness health insurance plans are another way to stay financially prepped. Many people do not pay attention to inclusions and exclusions and end up making the wrong choices vis-à-vis health insurance plans.

Let’s consider an example to understand the concept. Mr Joshi, who is 32 years, works in the private sector. He avails a health insurance plan; without understanding inclusions, exclusions, terms and conditions.

He falls ill and looks to claim the reimbursement. He is under the impression that this is really easy. Unfortunately, the insurance company denies the claim stating that the policy does not cover this type of illness. Eventually, Mr Joshi spends his savings for treatment. This is how the wrong health insurance plan, leads to financial losses.

See Also: Types of Health Insurance Plans in India

Tax Benefits

Health insurance offers tax benefits. Under Section 80D of the IT Act, 1961, policyholders can save up to Rs 25,000 a year on the premiums paid for self, spouse and children. Senior citizens get a higher deduction of Rs 50,000 a year.

Remember, health insurance should not be availed just to save tax. It must stand by you, during emergency medical treatment.  

No Claim Bonus (NCB)

Some health insurance companies offer the facility of No-Claim Bonus or NCB, when policyholders do not make a claim within a certain period.

See Also: Family Health Insurance Plan

NCB Comes in Two Forms:

1) A discount on premium

2) A higher sum assured.  

Let’s assume you have a health insurance policy with a sum assured of Rs 5 Lakh and your insurer has agreed to increase the sum assured by 5% for each claim-free year. After the first claim-free year, the sum assured will be Rs 5,25,000. (Rs 5,00,000 + 5% of Rs 5,00,000).

See Also: Exclusions of Health Insurance Policy

Takeaway

Health insurance helps save wealth. It is more than just another plan. Avail a health insurance plan to stay healthy and grow wealth.

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