In last ten years or so, major developments have taken place in medical science in India. If we compare medical facilities available a few years back, there’s been a vast improvement. Many corporate houses have entered this field and brought world class medical facilities at our doorsteps. This development has definitely benefited the average Indian, but it has also increased the overall cost of medical treatments.
Medical Inflation has settled at around 14% – 15%, through the last decade. Over the years, technological advancements and the presence of private players has increased medical facilities in India. Today, we have hospital facilities, which are comparable to luxurious five-star hotels! But along with increased facilities, the medical costs too seem to have gone through the roof! What is the use of advanced facilities if the average Indian is unable to afford it?
Often, I come across people who have had to borrow money to fund a medical emergency, or worse, those who have suffered prolonged financial difficulty due to unexpected and unavoidable medical emergencies, which ate away into their investments/savings that they had planned for some other goals. All this because they did not have medical insurance or then, had inadequate medical insurance.
Mehernosh Shroff, aged 47, has a good corporate job; he lives with his wife and a 15-year-old daughter, Rashna. He is well-read and has done his financial planning early in life. He started investing for Rashna’s education since she was born and now, is well equipped to take care of Rashna’s advanced education expenses, when she turns 18. He ignored the advice of buying a separate medical insurance cover, considering he already has Rs. 3 lakh as employer sponsored floater medical cover for himself and his family.
One ill-fated morning, when his daughter Rashna was travelling from Mumbai to Pune, she met with a serious accident on the Expressway and had to be operated and hospitalised for more than 15 days. Luckily for Mehernosh, she recovered fully and was back home, but with a hospital bill of more than 11 lakhs! Mehernosh had to shell out Rs. 8 Lakhs from his pocket (after taking medical insurance reimbursement of Rs. 3 lakhs from his employer), which ultimately went out from her education corpus. So now, when Rashna is barely three years away from attending higher education, Mehernosh is back to ground zero and faces the mounting task of saving Rs. 8 lakhs in next three years! Now, he has bought a top-up Mediclaim policy of Rs. 10 lakhs, having learnt his lesson the hard way. Had he taken adequate health insurance earlier, not only would the insurance company have taken care of his hospital bills, but the premium also would have been much lower!
Many clients put forward the argument of having employer sponsored medical cover. Most often, it is found to be inadequate. Moreover, what happens when you retire and employer provided cover ceases? At the age of 60, when one retires, no insurance company would be willing to insure you as it is always said, “Medical Insurance should be taken when you need it the least, because when you need the most, no one will be willing to give it to you.”
The most important reason for having adequate health insurance is it prepares you to face any eventualities that life might throw on you. It can protect you and your family from financial disorder if any medical emergency arises in your family, as medical insurance will provide for the cost to the extent of coverage amount. It is not the deduction it offers u/s 80D of Income tax Act.