Is Health Insurance a Good Money Saving Strategy?

A health insurance policy can help you save lakhs of rupees that are spent on medical treatment every year. Moreover, by paying health insurance premium you can save income tax on the same and also on preventive check-ups that are done. Nowadays, the increasing cost of healthcare and vulnerability to health issues surges the need for health insurance cover more than ever before. But we cannot deny the fact that the penetration of health insurance in India remained abysmally low.

As per the experts, the reason behind this is lack of awareness among people, lack of healthcare infrastructure, inability to pay the premium, among others. Since the outbreak of the COVID-19 pandemic, the Insurance Regulatory and Development Authority of India (IRDAI) has announced various amendments this year to ensure health insurance remains accessible to all.

And those who already invest in health insurance wonder if it can help them save money? Well, having a medical insurance cover can prove to be one of the wisest money saving strategies in your financial portfolio and the reasons are discussed below:

1. Provides a Safety net from High Medical Costs

Off late, the cost of healthcare has risen in India and Globally. And when there is a medical emergency, a lot of people end up dipping into their savings that have a hard hit on their future financial plans.

The sky-rocketing cost of hospitalization, expensive preliminary tests, is proof that a medical emergency can burn a huge hole in our pockets. And nearly 62% of the Indians burn a hole in their pockets by paying for their medical expenses. It highlights the fact that most of the Indians still depend on their savings to fund health emergencies.

On the contrary, one of the major problems that health insurance in India covers – is the financial setbacks of medical emergencies. It helps in paying hospitalization costs, including the pre-and-post-hospitalization costs. When availing of medical treatment, it ensures that medical bills are the last thing on your mind. Thanks to the cashless treatment facility that the insured can avail in a wide-network of network hospitals that are registered with Insurers and the claims are settled directly.

2. Save Income Tax

health insurance not only saves you from exorbitant medical costs, but the premium that you pay is eligible for tax benefits. In India, those who are paying for their medical cover can avail of tax benefits under Section 80D of the Income-tax act. While the government requires you to file your income tax return, it also gives you a provision to save your tax legally.

The tax exemption is valid on health insurance premium paid for you, spouse, children, and senior citizens. You only need to furnish your policy details and file tax exemption section 80D and this will not be deducted under your TDS.

3. Tax-saving on Preventive Medical Check-ups

Another way to save on medical expenses and avail of income tax benefits is to carry out preventive health check-ups. You can avail of the tax deduction for any expenses incurred on preventive health check-ups, but in most cases, people end up spending money on check-ups and miss out on claiming the tax benefits.

4. Protection from High OPD, and Diagnostic costs

Medical costs, OPD (out-patient department) expenses, diagnostic tests are also on an upswing because of high medical inflation, factors that rationalize the buying of a medical insurance policy.

It is worth mentioning that the medical policies not only cover the hospitalization expenses but some policies also cover OPD expenses and diagnostic tests as per the policy terms and conditions. And these costs are an important factor of consideration for individuals planning to buy health insurance for themselves and their families.

5. No Claim Bonuses

Another factor that people are not aware of is No-claim-bonus. It is the reward that the insurer provides for staying healthy and not filing a claim in the form of a No-Claim bonus.

In addition to this, you can now pay medical premiums monthly, quarterly, and six monthly installments, to ensure that it doesn’t feel out of reach anymore. You can now take a smart step forward and invest in one of the most suitable health insurance plans without worrying about paying the premium in on go and live in a carefree manner.

Additional Features

Health insurance companies these days also offer some additional features with their health plans:

These add-on features prove to be helpful resources for people. For example, Telemedicine services allow people to consult a doctor over the phone or video chat in non-emergency situations. Insures now compensate for the telemedicine consultation charges as well.

COVID treatment cover is also provided, which saves you from losing your entire bank account to the disease, because there is no fixed treatment and procedure, and the recovery would depend on the patient’s severity. And if it is severe, it can cost you your life’s savings.

Is Investment In Health Insurance Worth It?

It’s not easy to see how much your health insurance plan saves you on medical care expenses over a period of time.

It’s complicated to precisely evaluate the cost of monthly premiums and it’s worth the savings. People who have medical insurance cover can now keep a track of their spending on medical facilities, check-ups, hospitalization, premiums, etc. You can evaluate your finances for a period of one year to understand how much you have needed to pay on your own without medical insurance.

Emergency medical treatment, medical procedures, and surgeries are costlier than preventive care. Some are pre-planned while most are sudden. Because of the exorbitant cost of treatment, it can be risky to not have a financial cover and reduce your financial stability.

Bottom Line

With the benefits and covers available under a health policy, investing in health insurance in 2020 is a fruitful move. It is one of the best money-saving strategies in the long-run. So, take the smart step forward, and invest in the right health insurance in 2020!