When you invest for the long term, it is important to make sure that the returns your portfolio gets are ahead of inflation so that you get a real return. Buying health insurance is not much different in this regard—it is important to inflation-proof your health insurance strategy because medical inflation continues to be in double digits. According to Nivesh Khandelwal, founder and chief executive officer of LetsMD, a fintech healthcare platform, medical inflation is around 15-17% and will continue to rise unless the state intervenes to build more affordable infrastructure. How expensive is healthcare today? A cardiovascular surgery can cost upwards of Rs3 lakh in corporate chain hospital in metros. And even dengue can set you back by Rs90,000. And these costs are bound to go up. At Mint, we advise individuals to have health insurance, even if they are covered by their employer. But can health insurance be the answer to all your medical needs? Is there a strategy that can give you maximum benefits at little cost? We find the answers here.
The need for health insurance
You need insurance because you don’t want to pay hospital bills out of your pocket. A health insurance policy pays for hospitalization, which includes expenses such as room rent, surgical procedures, nursing expenses, doctors’ fees, cost of medicines and diagnostic tests. This policy is renewable for life, so you pay a premium every year, and the premium increases as you age. Even if you make a claim on your policy this year, the original insurance cover is available to you when you renew it next year. This means, if you keep renewing your policy, it will continue to cover your medical tabs till you live. “It’s very important to be insured against huge losses and hospitalization falls in that category. You may not make use of the policy at all in your lifetime, or realise that you paid more than you claimed, but the risk of being uninsured is far more catastrophic,” says Priya Sunder, director, PeakAlpha Investment Services Pvt. Ltd.
