 Ankita had settled into her job in a software company a few years after completing her engineering. She had developed a healthy habit of diligently saving a small portion of her monthly salary, assuming that it would be enough to cover her expenses on a rainy day.
One day she found yellow discoloration on her skin. As fate would have it, the doctor diagnosed the illness as jaundice, post which she got admitted to the hospital for a week. At the time of being discharged, she was jolted to see the hospital bill. Her savings were no match for the hospitalization expenses incurred!
In such cases a medical insurance cover would have been helpful. Ankita's financial burden could have been lessened if she had opted for one.
What is health insurance?
Health insurance is a financial plan where the insured needs to pay a premium in lieu of which eligible medical expenses are borne by the health insurance company. As evident from Ankita’s story, health insurance plans are of paramount importance for your physical and mental wellbeing. Here are five important reasons to avail one:
Skyrocketing Health Costs
Medical costs, which are ever-rising, can burn a huge hole in your pocket. This indicative list of the cost of common medical procedures says it all:
| Surgery |
Approximate Cost (in Rs.) |
| Heart Bypass |
3,00,000 |
| Hysterectomy |
1,50,000 |
| Cataract |
30,000 |
| Heart Valve Replacement |
3,30,000 |
When people are hospitalized, a lump sum amount needs to be paid to the hospital. In the absence of liquidity, people load up expensive credit card debt or take loans at high rates of interest. Medical insurance plans protect your finances and cover expenses that you may incur before as well as after hospitalization.
 Cashless Facility
Health insurance companies have a network of empanelled hospitals where people can avail cashless hospitalization i.e. avail medical aid without payment. The insurance company directly settles the hospital claim, eliminating the financial burden of the insured patient. No hassles of room bill payment, investigation report submission or pharmacy bill clearance could surely boost a speedy recovery!
Medical Emergencies
Health problems may crop up any time; they mostly arrive unexpectedly. In some cases ailments known to run in the family may be a cause of concern. Being insured would be a smart way of financially tackling such diseases or any medical crisis.
Tax Benefits
| Category |
Deduction (in Rs.) |
| Individuals |
Up to Rs.15,000 |
| Senior Citizens |
Up to Rs.20,000 |
Health insurance premium paid out of taxable income is eligible for deduction (thereby lowering your tax liability) under Section 80D of The Income Tax Act, 1961. The amount of deduction available for Financial Year 2014-15 is as under:
Note: In case you pay medical insurance premium for your parents, you could avail an additional deduction of Rs. 15,000 (or Rs. 20,000 if your parents are senior citizens).
Developed Insurance Sector
 Different health insurance plans are available to cater to the unique needs of people. For example, family health insurance plans cover health expenses of the entire family under a single policy. On the other hand benefit plans that provide a lump sum amount in case you are diagnosed with a critical illness are also available.
Besides, there are specific plans that come to aid in case your existing medical health cover is rendered inadequate in a medical emergency.
Health insurance plans undeniably form a crucial part of any healthy financial portfolio. The thumb rule is to look for a policy that suits your requirements; needless to say, you would be required to read the fine print to know what is and what is not covered.
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