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MONEY TRAP - 7 : Not Having Sufficient Health Insurance

There is a famous saying “He who has health, has hope. He who has hope, has everything”. Do you need any better words to explain why you must be in good health? Yes, good health is everything, but life’s not fair. Sometimes you do fall ill and land up in hospital. Now medical treatment in a reputed hospital can be very costly. Your pockets are empty in no time. This is why you need health insurance. Health insurance is a simple plan, where you pay the Insurer a fixed amount generally once a year, called the premium. You are insured for an amount called sum assured, depending on the premium you pay. Your insurer pays your medical bills, to the extent you have insured yourself, which depends on the premium you have paid. You can also cover your entire family under a single health insurance plan. But what happens if you do not have sufficient health insurance? It’s obvious….you would have to pay for a part of the medical treatment from your own pocket, called an out of pocket expense. Medical expenses are very high today and even paying part of this expense, can blow a hole in your pocket. Imagine lying helpless on a hospital bed with no sufficient health insurance and being able to do nothing about it?

Why you need sufficient health insurance?

Let’s learn from Ajith why you need sufficient health insurance. Ajith, who is 28 years old, works for a furniture startup in Bengaluru. He loves playing football and never misses an opportunity to play with his friends, at the local ground. One day while playing football with his friends, Ajith trying to gain the ball, slips and falls heavily to the ground. He fractures his hip and his friends rush him to the nearby hospital. Ajith is rushed to the operation theatre, but little does he know that his problems are just beginning. The cost of the surgery is around INR 3 Lakhs. Ajith had a health insurance plan, but the sum assured was just 1 Lakh. Unfortunately the Company he worked  for, did not cover him with a group health insurance plan. His father had retired and not much help was coming from there… Ajith was in a fix. How to collect the INR 2 Lakhs he needed to pay the hospital bill? He was forced to borrow money from his friends and needlessly fell into the loan trap. Could Ajith have avoided this unpleasant situation?

Ajith like several of our fellow citizens, did not have sufficient health insurance. Ajith believed he would never fall seriously ill. Yet he availed health insurance. Unfortunately the sum assured under the health insurance plan, was not sufficient to cover the cost of his treatment. Ajith is not the only citizen making this mistake. The penetration of health insurance in India, is very low. India has a population of around 125 Crores, but less than a fifth of the population has health insurance. Most of our citizens who have health insurance, are only insured for around INR 2 Lakhs. This meagre amount is definitely not going to be enough for the treatment of lifestyle diseases and critical illnesses. What would be the consequences of not having sufficient health insurance? You might have to compromise on medical treatment or financial goals such as your children’s education and marriage.

Is depending on employer health insurance a good idea?

Studies have shown that more than 95% of the citizens of our country, do not have sufficient health insurance. What about the working youth of our country? Many of the young working professionals in our country, do not bother availing health insurance. The reason… Most of the young working professionals in our country, enjoy group health insurance cover, provided by the employer. Why buy another plan? But is it wise depending on this group health insurance? You will be covered under this group health plan, only till you work for this employer. If you quit your job or are laid off, you will not have any health insurance. What if you are between jobs and suffer a serious ailment, requiring costly medical treatment? How will you pay the medical bills without a health insurance plan?  Do not let a single day pass, without being covered by a health insurance plan.

SEE ALSO: Advantages Of Buying A Health Insurance Plan

Why you need a critical illness plan?

Naveen who was 34 years of age, worked for a reputed firm in the Private sector. Naveen was in a high-pressure job and used to smoke a lot. Naveen availed a family floater health insurance plan, with a sum assured of INR 3 Lakhs. Naveen, his wife, and child were covered under this plan. Naveen was also covered by a group health plan provided by his employer, with a sum assured of INR 1 Lakh. Naveen did not opt for a higher sum assured in his family floater plan. He felt he would be charged a higher premium, as he was a smoker. This was soon to be a serious mistake. Naveen suffered a heart attack. The cost of surgery and stents was a whooping INR 6 Lakhs. Though Naveen had employer health insurance, the sum assured of INR 1 Lakh was never going to be enough. The family floater health insurance did offer him a cover of INR 3 Lakhs. Still Naveen had to borrow money from relatives and friends to pay back the remaining medical bills. Naveen was in serious debt and had fallen into the loan trap.

What Naveen required was a critical illness health insurance plan. A critical illness health plan pays a lump sum, if you are diagnosed and receive treatment for critical illnesses such as stroke, kidney failure, cancer, heart attack, lung diseases and even serious burns. Lifestyle diseases are on the rise and critical illness health plan is a must in today’s fast and hectic world. There’s good news….The premium of most critical illness health plans are not too high. However critical illness plans do have a catch. Most critical illness plans have a survival clause of 30 days. You have to survive for this period or more after diagnosis of the critical ailment, to make a claim.

Read between the lines before choosing a health insurance plan. The team of wealth doctors at is always there to help and guide you. You can explore this unique Free Advisory Service just by giving a missed call on 022 6181 6111. is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.

Mr. C.S. Sudheer

Mr. C S Sudheer is the founder and CEO of – India’s largest Financial Education Company. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of He aims to build a nation that is financially literate with investment savvy citizens.

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