Wednesday 09 Oct 2024

Securing financial freedom: Need for comprehensive health insurance

Priyanka Acharya | SEPTEMBER 30, 2024, 12:31 AM IST

As  we celebrate the building of #ViksitBharat we all seek freedom—freedom  from worries, uncertainties, and financial stress. While financial  freedom is often linked to building wealth, securing one’s health  through comprehensive health insurance is equally crucial. Health  insurance, when chosen wisely, offers protection against rising  healthcare costs, which could otherwise erode our savings.

A Real-life Example: 

Bhavna’s Story

Consider  the case of my friend Bhavna, who faced an eye-opening situation. Her  mother was hospitalized, and Bhavna, like many, thought she was  well-prepared with a family health insurance plan for which they paid a  Rs 65,000 annual premium. However, during her mother’s treatment, Bhavna  encountered an unexpected challenge—no coverage for consumables or  modern treatments like high-end ventilators, robotic surgery, or  advanced diagnostics that were crucial during her mother’s illness.

Her  health insurance policy, though seemingly comprehensive, was outdated.  It only covered basic hospitalization and treatments, leaving out many  crucial components of modern healthcare. As a result, Bhavna had to dip  into her savings to cover expenses that traditional health insurance  policies often exclude.

Key Lessons from Bhavna’s Experience Coverage for Consumables and  Modern Treatments

In  Bhavna’s case, her traditional health insurance plan did not account  for consumables. According to IRDAI’s 2022 report, around 30% of health  claims are rejected due to exclusions of consumables or modern  treatments. During emergencies like we experienced the pandemic few  years ago, costs can quickly accumulate for necessary but unlisted  items, such as personal protective equipment (PPE), gloves, and advanced  medical devices. Modern health insurance plans, however, now  offer comprehensive coverage. New policies include benefits such as  coverage for consumables, modern treatments, and technologies like  robotic surgeries, stem cell therapy, and treatments that were once  excluded from most policies. Today’s plans cater to these advancements,  making health insurance a much-needed safety net against evolving  healthcare needs.

Stay Updated on Policy Features

In  addition to consumables, Bhavna’s policy did not cover certain modern  diagnostic treatments or advanced medical procedures. As healthcare  advances, it is critical to ensure that your health insurance policy  evolves too. Many new-age policies now cover treatments like organ  transplants, cancer care, mental health treatments, and home care  post-surgery, offering a holistic approach to healthcare that earlier  plans didn’t cover.

Importance of Sum Insured & Top-ups

The  skyrocketing costs of medical treatments mean that a sum insured of  Rs 5-10 lakhs, which might have seemed adequate a few years ago, is now  often insufficient, especially in urban India. Bhavna’s situation  demonstrated the importance of having adequate coverage. Medical  inflation in India is soaring each year, and hospitalization costs for  critical illnesses can range from Rs 5 lakhs to Rs 25 lakhs in major cities.

To  counter this, newer health insurance plans offer super top-up policies,  where individuals can enhance their coverage beyond the basic sum  insured at an affordable premium. Bhavna’s family could have avoided  liquidating their investments had they secured themselves better. Not  just Top-ups, these days the regular health insurance plans reload even  100-150% Sum Insured to the policies as the years go by.

Avoiding Common Pitfalls

Bhavna’s experience also points out some common missteps people make while choosing health insurance:

- Ignoring Policy Riders

- Underestimating Coverage

- Not Updating Policies

To  achieve true financial peace, especially concerning healthcare, it is  essential to be proactive and informed about your health insurance. Here  are three vital steps to ensure your health insurance truly supports  your financial prosperity:

Stay Informed About Coverage: Read the policy within 15 days of buying/renewing it.

Review and Update Policies Regularly: Get your policy audited from an expert well in advance before renewal.

Collaborate  with Your Insurance Provider: Regular communication with your health  insurance provider is critical to staying updated on policy changes, new  benefits, or better options. Make sure your entire family is involved  in discussions about health insurance so that everyone is informed about  the coverage available.

Bhavna’s story is not unique, but it  highlights an important lesson. In a country like India, where  out-of-pocket healthcare expenses contribute to more than 60% of total  health expenditures, having a comprehensive, up-to-date health insurance  policy is a necessity​.

Today, modern health insurance policies offer  far more than just hospitalization coverage—they are increasingly  tailored to cover modern treatments, consumables, and even wellness  programmes that help you lead a healthier life. Let’s together protect  our savings and enjoy a life free from financial mess, stress and  distress.

(The writer is a Financial Educator with 15-plus years of experience, a published author, a TEDx Speaker who hosts multilingual podcast shows ‘LaxmiGyaan Library’ & ‘A Sip of Finance’)


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