Health insurance is a kind of safety net that helps people overcome the financial challenges imposed by medical catastrophes. In India, health insurance covers not only the costs of medical care incurred due to hospitalisation but also provides different benefits. Here are the top benefits linked with health insurance –
∙ Financial security: Health insurance serves as a financial buffer against the high costs involved with medical treatment. Being hospitalised due to illness or accident may mean that one’s savings won’t last long because of the large amount of expenses involved. Health insurance provides coverage of such costs, thus safeguarding an individual’s financial stability.
∙ Cashless treatment: Nowadays most health insurance policies offer cashless treatment options. Therefore, hospitalisation expenditures at network hospitals will be paid by the insurer rather than the policyholder.
∙ Coverage for pre and post-hospitalisation: Health insurance plans not only cover the costs incurred during the time of hospitalisation but also provide support before and after the period of hospitalisation. This includes costs related to diagnostic tests, prescriptions, and follow-ups, which makes the coverage comprehensive.
∙ Coverage for critical illness: Critical health problems like cancer, stroke, or heart attack demand high-quality and prolonged medical treatment, which can be costly. A lot of health insurance policies cover such critical illnesses, giving a lump sum amount on an illness diagnosis.
∙ No claim bonus: In case a policyholder doesn’t claim during the policy year, insurers reward them with a No Claim Bonus. This can be a discount on the next premium or an increase in the coverage amount without a premium increase.
∙ Health check-ups: Routine medical examinations are important for early treatment and prevention of diseases. A lot of health insurance plans feature free regular health check-ups, and this helps policyholders to keep their health under check regularly.
∙ Transport charges: In an emergency, ambulance services are vital. Health insurance policies cover the cost of ambulance services, allowing the policyholder to receive rapid medical care without worrying about transportation costs.
∙ Room rent: During hospitalisation, the cost of the room can add up, increasing the overall medical bill. Health insurance policies cover room rent, limiting the out-of-pocket expenses for the policyholder.
∙ Restore benefit: During hospitalisation, the cost of the accommodation can build up, increasing the entire medical expense. Health insurance policies include room rent, minimising the policyholder’s out-of-pocket payments.
∙ Lifelong renewability: Some insurers provide a restore bonus if the policyholder exhausts the sum insured as a result of a medical emergency. This feature automatically replenishes the money insured to provide continued coverage. One of the major attractions of health insurance in India is the health insurance tax benefit. Premiums for health insurance are deductible under Section 80D of the Income Tax Act.
Importance of life cover
Life cover is a contract between an insurer and a policyholder to pay a specified beneficiary a sum of money upon the insured’s death. Here are points on the relevance of life insurance coverage –
∙ Financial security: In the sad case of the policyholder’s unexpected death, life insurance offers a financial cushion for the family. The death benefit from the policy allows the family to continue their lifestyle and avoid financial difficulty in the absence of the breadwinner.
∙ Debt repayment: In case of any debts or loans that the policyholder may have, the available sum of money from the insurance can be used to clear them away. This ensures that the family members are not left with the obligation of loan repayment as the policy shifts to them after the demise of the policyholder.
∙ Child’s future: Life insurance can also play the key role of a safety net for your child’s future. The sum assured can be paid to school for the child’s education and this will make sure that the child’s educational needs are taken care of even while you are missing.
∙ Retirement goals: Some types of life insurance are similar to pension plans in that they bring in a continuous flow of income during the retirement stage. In this way, your retirement pension can become a replacement for salary income in your old age, helping you maintain financial independence.
∙ Tax benefits: The Income Tax Act, Section 80C states that the life insurance premiums are deductible to an extent of Rs.1.5 lakh per annum. This helps in the reduction of income tax by reducing your taxable income. As a result, you will save on taxes.
∙ Long–term investment: Life insurance isn’t only about coverage, it’s also a long-term investment instrument. Plans including endowment or unit-linked insurance schemes also generate maturity benefits, helping in achieving long-term financial goals.
∙ Funeral expenses: Burying a loved one comes with burial expenses. Some life policies even include these fees, taking the financial stress off the family during a mourning period.
∙ Coverage against illness: Along with many life insurance plans, you may find riders or additional benefits that can give coverage for critical illnesses. On the diagnosis of the critical illness, which is listed, a lump sum amount will be paid which may be used on treatment costs payment.
∙ Mortgage redemption: If the policyholder passes away, any unpaid mortgages or personal loans can be covered through the use of a life insurance policy. This prevents the family from being evicted or their house repossessed because they have not repaid the loan.
∙ Mental peace: Life insurance offers the peace of mind that comes from knowing your loved ones are financially secure. It guarantees that your family has the financial wherewithal to continue living their lives in your absence.
Conclusion
Including health and life insurance in one’s financial portfolio is a wise decision. It guarantees your family’s financial security and protects their future from unanticipated catastrophes. Furthermore, the tax benefits connected with both insurances make them appealing options for consumers looking to improve their financial planning. Health insurance tax benefits and life coverage are about more than simply saving money on taxes; they are also about ensuring your financial security when you need it most.