What happens towards the end of a financial year? A large number of people rush to make investments in several instruments to save taxes. As the deadline draws closer, many buy insurance policies, without evaluating a long-term plan, and the pros and cons of it.
People take up health insurance policies in haste to save taxes under Section 80C of the IT Act. This can have major consequences.
Health insurance is important and should be given serious thought as it covers financial risk arising from unfortunate events, high hospitalisation costs, and sudden medical expenditure. Hence, tax benefit should only be viewed as a side benefit of the policy.
Let’s take a look at the relevance of health insurance
Are you immune?
No one can predict the future and even a healthy human being can fall sick or get hospitalised. You must’ve heard people say: ‘He was healthy and in great shape. We don’t know what happened all of a sudden’.
Most of the medical emergencies happen all of a sudden and leave a dent on your savings and investments, due to high medical costs. In such scenarios, health insurance covers you from high cost of hospitalisation, medicines, etc, and prepares you to deal with such eventualities.
I am too young for health insurance
If you take insurance at a later stage of life, you’ll be bound to pay a large premium amount for a large cover. But, if you take the same policy earlier and at a younger stage of life, you’ll end up paying less premium amount for the same cover.
For instance, at the age of 25, you can have a cover of Rs 3 lakh at a premium of just Rs 5,546. But, if you buy a cover of Rs 9 lakh at the age of 50, the premium amount gets almost tripled at Rs. 14,856. The difference is huge.
Also, health insurance taken at a younger age will cover you for illnesses or ailments, which you will eventually have at an older age. So, you will automatically be covered for pre-existing diseases.
There are many insurance plans in India, such as this health insurance that offers a large cover amount at affordable premium prices.
Your employer has health insurance policy
What if you change your job, retire or have to change cities under some circumstances? Once you quit the organisation, your health insurance will also cease to exist, and what if your new employer doesn’t give you such benefits.
It is always advisable to have a separate health insurance policy as it stays with you.
Remember, health insurance is the most cost-effective way to secure yourself from unexpected medical expenditure.
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