(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to mailfpc@ yahoo.com)
Seven reasons why you must have a personal health insurance cover:
Planning for future health care costs is very vital for an overall financial plan. In all the estimates, health care costs are going to be a lion's share in one's finances in the days ahead. There are many reasons for this; Our changing lifestyles, medical innovations to name a few. And these days with the advancement of medical technologies, we live longer with the medical support and they don't come cheap.
Let's see the 7 key reasons why we need to have a personal health insurance:
Retirement blues:
Retirement will be a great financial challenge for the current set of working class. More so on the medical costs front. And retirement is not very far away as we assume.. We just suddenly retire one fine morning. And we don't have generous employers who would extend health insurance facility post retirement which leaves us to manage on our own. And the real worries on health begin only after 60+ years. It would be prudent to have a personal insurance plan apart from what your company covers now, the reason being they are cheaper when bought in the younger age. If one has to take a health insurance plan @ a later stage, it would be expensive and cumbersome because of the age and health factors. Take a personal health insurance plan NOW...
Career Transitions:
We keep changing our companies and places of work, unlike our previous generation where many of them worked for government organizations for their entire career. But it's different in our cases and we keep changing our work places and cities.. Which leaves very little scope to concentrate on our personal financial planning issues. Health cover is one which is normally ignored. Imagine if one is changing the company of work, the transition might take few weeks to few months time. And during that time frame, one is left with no health insurance cover for the self and the family. It's not often that one joins the next organization the very next day of quitting the previous organization. In such situations, our personal health cover can only come in handy.
Career changes:
Our generation does not work in a conventional career environment. Firstly we don't we don't work till our age 60 or so... Secondly we pursue our own dreams and passions in our career. Effectively we pretire and pursue our other ambitions. Gone are the days of conventional career. Such an environment requires a personal health insurance cover @ all times.
Health care costs are sky rocketing:
Consider this:
If one has to spend Rs 5 lacs now towards medical expenses, can you guess what would the same medical expense cost after 15 years on a very conservative estimate?
It could cost upwards of Rs 40 lacs an eight fold increase and this is just a modest estimate.Advancement of medical technologies are the way forward. Such innovations will make people live even longer than ever before. And such medical technologies don't come cheap. Yes organizations do cover the health costs of the employees, but only to an extent of the company's policy. But such a cover is not possible post retirement. Its better to have an additional cover for the family on a personal capacity to handle such sky rocketing costs.
Shrinking organizational support:
The health care support extended by the employers may come in for reviews in the future owing to rising costs for the companies. This may lead to tweaking or trimming the existing covers (like exclusion of diseases to be covered, size of cover, parental cover etc.,) which may not be an actual advantage to the employees. To avoid such scenarios, it's better to have a personal health insurance cover.
http://economictimes.indiatimes.com/personal-finance/insurance/insurance-news/companies-resort-to-belt-tightening-exercises-trim-employee-health-benefits/articleshow/11704453.cms
It's cheaper today than tomorrow:
For eg., an average adult aged 30 years, for an medical insurance cover of 5 lacs will now pay a sum of Rs 7100 Per annum. For the same cover, a 50 year old person will now pay Rs 15,900 PA. It's more than double and that's the difference of taking it early in the life. And taking a health cover at later years will come with lot more expensive owing to health and age reasons. So buy it now...
Tax Saving under Section 80 D:
While calculating one's taxable income, the premium paid for a health insurance policy can be deducted from the total income under Section 80D of the Income Tax Act, 1961. This deduction is over and above the amount under Section 80C which is Rs 1 lac. The amount of deduction available is up to Rs 15,000 of premium. A further deduction of Rs 15,000 can be claimed for the premiums paid for parents and if they are senior citizens, the claim can be for Rs 20,000.
(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to mailfpc@ yahoo.com)
