Just about six months back, things were perfect. No one ever thought that we would have to stay home for our safety. Not many would have worn a face mask until the onset of the novel coronavirus, which has wreaked havoc on humankind. Hand sanitisers were not in demand as hardly anyone used it.
Come March 2020, the whole world shook due to the outbreak and spread of COVID-19 infection, forcing countries across the globe to impose lockdown and travel restrictions. The deadly virus has already claimed lives of nearly 7.5 lakh people. Many individuals are still battling the infection, with some requiring support in intensive care units.
Hospitalisation has always been a costly affair. If by any chance you or your dependants land on a hospital bed, then your bank balance would take a severe beating. Is there a way you can avoid it? Yes, there is! But have you considered it seriously? No, maybe you didn’t think you would need it.
Well, given the uncertainty that looms large over our lives, health insurance must be one of the essential elements in your finances. Having the right insurance policy that offers sufficient coverage for self and dependants would alleviate the need to pay a hefty sum from your pocket due to hospitalisation.
Here’s why health insurance is critical now
Many individuals ignore health insurance thinking it to be an unnecessary expense, and their health is alright. This is one of the biggest mistakes that anyone can make in their finances. No matter how healthy you are, you are always in need of health insurance. The fact that it offers tax deductions should make it lucrative and an automatic inclusion.
Also, health insurance comes in exchange for the payment of annual premium, which is very nominal when compared to the sum assured you get. Also, this will provide cashless treatment. Meaning, you get the treatment at a network hospital without having to pay any amount out of your pocket as the insurance will take care of everything.
The cost of hospitalisation in India is increasing at a rate much faster than that of inflation. The treatment of COVID-19 will prove to be unbearable if you don’t have a suitable policy. You are likely to be hospitalised for at least a week on contracting the virus and are sure to pay a bomb to settle the hospital bills on discharge.
Also Read: How to Make Claims With Two Health Insurance Policies?
Well, I have employer-provided insurance. So, I don’t need a private one
Yeah, some employers do provide a group health insurance which covers employees and their family members at affordable premiums. But that might not be enough! This is because employers would like to keep their costs on the lower side and hence opt to avail policies that may provide just the bare minimum facilities.
Group insurance policies come with a limited cover. The sum assured might not be enough if there is a severe health condition. Also, there is a possibility that your employer-provided health insurance policy does not cover some illnesses. If you were not aware of this, and you or dependents are affected by one of those illnesses, then you have to bear medical expenses on your own.
Therefore, it is always advisable that you avail a health insurance policy on your own which offers sufficient sum assured and covers most of the illnesses. You can have your employer-provided insurance as a backup or additional coverage to the insurance cover that you are going to buy on your own.
Beware of the waiting period!
If you are to be covered under the insurance offered by your employer, then you have to wait for a particular duration called the waiting period. Furthermore, You are covered under your employer-provided insurance only as long as you are employed. The policy will seize to cover you and your family members the moment you leave your job voluntarily or involuntarily.
When you have got a new job and don’t have a private insurance policy during the waiting period, then you are left uncovered. During this period, if you or your family members require emergency medical care, then you have to bear the hospitalisation expenses on your own as you are longer covered under the health insurance offered by your previous employer.
Also, the health insurance provided by your current employer would start offering coverage only after the waiting period lapses. There are several instances where individuals have fallen sick during the waiting period and have had to pay their medical bills on their own. It is best to have your private insurance to avoid this kind of a scenario.
Avail insurance and claim tax deductions
As mentioned earlier, availing health insurance comes with tax rebate under the provisions of Section 80D of the Income Tax Act, 1961. The following table shows the extent of tax deductions you can claim on availing a health insurance policy for self and family members:
| Scenario | Premium paid towards health insurance (Rs) | Tax Deductions under 80D (Rs) | |
| Self, family, children | Parents | ||
| Self and parents below 60 years | 25,000 | 25,000 | 50,000 |
| Self and family below 60 years but parents above 60 years | 25,000 | 50,000 | 75,000 |
| Both self, family and parents above 60 years | 50,000 | 50,000 | 1,00,000 |
| Members of Hindu Undivided Family (HUF) | 25,000 | 25,000 | 25,000 |
| Non-resident individual | 25,000 | 25,000 | 25,000 |
The modern world is very uncertain and can spring an unpleasant surprise at any time without giving a hint, COVID-19 infection is the best example of it. If you are left uncovered, then your bank balance is sure to go down in settling your hospital bills. Hence, availing health insurance is critical. Despite having employer-provided insurance, it is advisable to have one on your own to ensure continuous coverage and flexibility.
For any clarifications/feedback on the topic, please contact the writer at vineeth.nc@cleartax.in
Engineer by qualification, financial writer by choice. I am always open to learning new things.
