Ways to Secure Your Savings by Investing in Health Insurance

Insurance is something that everybody needs, but unfortunately, most people fail to realise it. Health insurance is one of the essential services in the world today. Even if you are not formally engaged in any kind of career, it is still important to realise that health insurance will help you achieve your financial goals.

However, health insurance can be a tricky one with definitions and nuances that may not be easy to understand fully. Let's find out how it works, who should opt for it, and why it is important to have when trying to build your personal finances.

A health insurance policy, sometimes known as a medical insurance policy, is a form of insurance that insures all or part of an individual's risk of paying medical bills.⁴

The first step is getting a proper insurance plan. A person can select a health insurance policy from an insurance provider of one's choosing depending on the facilities supplied, the charges covered, and so on. Various firms have different rules for covering pre-existing conditions. As a result, it is essential to select the best strategy for oneself while maintaining all relevant elements in consideration.

The customer's premium is computed after picking an insurance policy. It is estimated based on age, earnings, and the presence of any health issues or disorders. Most insurance providers will do a rigorous full-body medical test only after this is a yearly premium established by the firm. The maximum amount covered by the insurance policy, termed the "sum insured" is also authorised.

If any medical expenditures arise as a result of hospitalisation, a health insurance claim can be issued in two forms. The first option is to go cashless. If the insured is admitted to a hospital listed on the insurance provider's network line-up, the company will handle all of the expenditures immediately.

The reimbursement procedure is the second alternative. The expenses need to be initially settled by the insured individual, and the expenditures will be subsequently refunded to him by the insurance provider once he submits the invoices and money receipts to the firm, along with all the necessary paperwork.

This is the basic mechanism of health insurance policies in India.

Here are how health insurance policies help you secure your savings:

1. Financial Safeguard
Insurance has the power to save and protect your wealth. If you're one of those people who would rather spend money on activities than on healthcare, then it's time for you to consider buying health insurance. Accidents or health conditions might wind up costing a significant amount of money and burning out your funds due to healthcare inflation. The high costs of health care pose several problems for our society as a whole. High fees can lead to you burning through your cash or spending more than you have. If the fees are really high, you may be forced to borrow cash on credit or from relatives and friends to cover them, putting you in debt. However, with health insurance, these out-of-pocket payments are considerably decreased because your insurer will cover the majority of medical bills by offering a guaranteed² payout when you file a claim, keeping your savings untouched.

2. Medical Expenses are Covered
Health insurance is not a luxury, but a necessity. Health insurance is an investment that gives you peace of mind. It protects you from big financial losses and has a variety of coverage options depending on your needs. The coverage of health insurance includes more than simply hospitalisation and accidents. It includes a diverse range of medical bills, including serious diseases, common illnesses, mental care, maternity fees, ambulance costs, alternative therapies, post-hospitalization expenditures, and even routine yearly health exams. In any of these instances, you will be financially protected in the event of medical bills.

3. Cashless Claims
How do you get hospital bills settled if you have health insurance? This is a question that many people ask when they're dealing with such an issue. The answer involves cashless claims. Health insurance claims can be divided into 2 broad types – cashless and reimbursement. With a health insurance cashless claim, the insured individual can get admitted at any network hospital without having to pay anything out of their pocket (aside from any voluntary or non-voluntary deductible or co-pay amount mentioned in the policy), because the insurer will settle the hospital bills directly. You won't have to pay anything upfront, so your funds will be safe.

4. No-Claim Bonus
If you do not submit any health insurance claims throughout a policy year, you will get a cumulative bonus, often known as a no-claim bonus. This bonus is a monetary benefit, such as a reduction in your premium amount for the following policy year or sometimes, it is a rise in the sum insured amount with no rise in your premium amount. Either way, you may receive the same coverage for less cost, or even more coverage for the same price, resulting in an amazing opportunity to save money.

5. Free Annual HealthCare Tests
There is no doubt that health care is one of the main factors which determine how long we live. Given that age, people can suffer from different diseases or illnesses. Therefore, it's important for every individual to have annual medical check-ups. However, these check-ups are usually expensive, and if you are not aware of your health, then it could cost you in the longer term. When you have medical insurance, you usually get free yearly health checks. Going for such check-ups may ensure that you are conscious of your healthcare, as well as uncover health concerns that might otherwise go unreported.

Blood sugar level tests for diabetes, mammograms for the detection of breast cancer, and pap smears for the detection of cervical cancer are all routine testing. Early detection of any health concerns can be critical in preventing or promptly treating the diseases, potentially saving a great deal of money in eventual healthcare bills.

6. Tax Breaks
Under Section 80D of the Income Tax Act, policyholders of health insurance plans can get tax deductions on their health insurance premiums. The limit is set to INR 25,000 for individuals under the age of 60 years, while for individuals over that age limit, the same threshold is INR 50,000. Both instances include an INR 5,000 tax break for preventive healthcare check-ups.

Here is a step-by-step breakdown of the health insurance purchase procedure:

1. Identify your requirements. Different individuals have different needs so you need to purchase a plan which fulfils your requirements.

2. Compare and contrast your options. You need to compare the plan coverage, sum insured as well as possible co-pay and deduction amounts.

3. Go over the insurance provider history. You have to check the insurance provider’s claim settlement history in order to ensure a smooth claim settlement in times of need.

4. Purchase online. Multiple insurance providers offer discounts on online insurance purchases. It also helps you avoid the hassle of going to a branch office and buying the policy offline.

Financial issues arise unexpectedly, and you cannot predict when they will happen. Therefore, it is important to secure your financial future and look after your future needs. Health insurance helps you protect and care for yourself, your family, and the financial goals that you have worked so hard at. It is a vital feature of any sound financial portfolio, but you should not make the mistake of thinking that it is there just to take money from your pocket. Instead, health insurance can help you build your future personal finances because it allows for greater long-term planning leading to your retirement.
https://en.wikipedia.org/wiki/Health_insurance⁴