COVID-19 pandemic | Why is health insurance so important?

Healthcare treatment costs are growing exponentially by at least 15 percent year on year. In fact, the COVID-19 expenses can go upwards of Rs. 5 lakh.

May 08, 2020 / 12:43 PM IST

Tapan Singhel

I have always believed that health insurance is a must-have policy to live a life of dignity and to have access to the best medical facilities. It has suddenly gained limelight after the coronavirus outbreak. There is an increase in the number of inquiries on whether existing health insurance policy covers hospitalization expenses related to COVID-19, and many people are also approaching insurers to buy a policy for themselves and their family members.

This makes me wonder: why is it that an eye-opening event is required for people to become aware of this important social security tool? Though we see an increase in the number of inquiries, it is still a surprise we don’t see as much uptake as it should be considering that health insurance in India is under-penetrated. It is mainly because our brains are not wired for risk, we feel nothing will happen to us and thus insurance doesn’t occupy a space in our wallet share so as to speak.

It is not uncommon in India, that you see people struggling to pay for their hospitalization expenses. At the billing counter of the hospital, there is always someone who has either exhausted savings or sold their valuable assets to pay for the hospitalization expenses. Healthcare treatment costs are growing exponentially by at least 15 percent year on year. In fact, the COVID-19 expenses can go upwards of Rs 5 lakh.

Also Read: Live updates from Coronavirus outbreak in India

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COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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It is not just about the COVID-19 virus outbreak, irrespective of that, medical exigencies are always unpredictable. Hence, it is crucial to have health insurance to be prepared for it.

Health insurance is considered as a dead investment by many because it doesn’t give any return or it is just a tax saving tool. Its true value is only evident when things go wrong and that’s the exact purpose of insurance. It helps you lead a life of dignity without digging into your savings, borrowing from someone or selling your valuable assets.

Think of it in a way that you may pay a premium for five to seven years without a single hospitalisation, but one such hospitalisation can be worth a lot more than the premium paid over such a time period, making it a worthwhile investment towards an uncertainty.

I firmly believe that one must have comprehensive health insurance cover which is a combination of a basic health insurance policy, super top up which comes handy if base policy sum insured gets exhausted and critical illness policy that provides you lump sum benefit amount as per the sum insured if diagnosed with the listed ailment under the policy. This mix will help you be prepared for most of the medical exigencies and stay worry-free in terms of managing medical expenses without being dependent on anyone.

Health insurance also allows you to access quality medical treatment as you don’t hesitate to visit a doctor with a financial back-up in hand. If you see today, there are people who frequently visit hospital for fever, flu among others. This is because they know that their medical expenses will be taken care of with health insurance, rather than staying at home, experimenting with remedies to treat themselves and wait for things to get aggravated.

It is also vital to have a health insurance policy with appropriate sum insured. Under-insurance will defeat the purpose of having insurance as towards the end, you end up paying some amount from your own pocket if you are not rightly covered.

Hence, it is advisable to assess your medical requirement, understand various health insurance policy by checking their coverage and exclusions, services provided by the insurer before choosing a policy. See if your requirement is fulfilled with a health insurance policy and accordingly opt for one, rather than blindly buying one which offers the lowest premium.

I would suggest good research on not just the products, but the claims track record and servicing capability of the insurance company being considered. Always speak to an expert or an insurance advisor as insurance is very much a product which is bought over conversations. Health insurance is quite affordable. If you consider the amount of treatment costs against which it covers you, it is quite miniscule. But always remember, price should not be the deciding factor, it should be the fulfillment of your requirements and track record of the insurer.

I always suggest starting early on in life with a health insurance policy, but it is never too late to buy a health insurance policy, if you don’t have one, buy it now to safeguard yourselves and your loved ones against unpredictable medical exigencies. It is times like these that remind us of the importance of a robust health insurance policy, but let the reminder turn into an inquiry and let that inquiry result in the purchase of a good health insurance coverage.

The writer is MD & CEO, Bajaj Allianz General Insurance

Follow our full coverage of the coronavirus pandemic here.
Moneycontrol Contributor
first published: May 8, 2020 12:43 pm

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