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How Health Insurance Reduces Financial Risk

how health insurance reduces financial risk – web soothe

 

We all like to invest in tangibles that will yield us returns in the near future. This explains why we are obsessive about buying property, gold and shares. However, we baulk slightly when it comes to insurance – after all, it doesn’t yield any returns, does it?

That is where you are wrong. If you consider the benefits of buying health insurance, especially a critical illness policy, you will realize that insurance can also yield returns over the long run. Here’s how:

1. You can hold on to your Savings.

The biggest money guzzlers in health care are serious illnesses that require daily medication and regular hospitalization. Several treatments for cancer or end-stage liver cirrhosis, for example, fall under this category of critical illness. Not having a critical illness policy will ensure financial ruin for you. However, purchasing critical illness cover much before an illness strikes will mean that you don’t need to dip into your savings for treatment.

2. It yields money for Hospitalization

If you are diagnosed with cancer and your doctor has prescribed a course of radiation therapy, you can be certain that your hospital bills are going to be extremely high from now on. But you need not worry if you have a critical illness insurance cover; this will take care of your upcoming expenses once you file the claim.

3. It yields money for Daily Expenses

Though we don’t realize it at the time, we spend a lot of money on daily expenses like travel and buying medicines when a loved one is in hospital. These expenses come out of our own pockets. However, if you have critical illness insurance cover, even these expenses are taken care of. Thus, you save the money you earn.

4. Term plans can yield Higher Returns

Though insurance is not an investment tool like property or shares, it can still save your money and give you high returns. In this context, term plans come in handy as good investment tools – their premiums are low while the returns are high. The earlier you buy term insurance (i.e. the younger you are), the lower will be the premium.

5. It can give Tax Rebates

Most people take a critical illness policy only to get a tax benefit every year. This is a smart ploy from an investment standpoint – you get critical illness cover and also get a tax rebate on the premium. However, be sure to buy critical illness insurance that you need, not one simply because it gives a tax benefit.

Vinod Duvasi

The author Vinod Duvasi

Founder of @beingdigitalz | Digital Enthusiast | Social Media | JB-ite | Blogger | Foodie | Search Consultant

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