Health Insurance: Investment or Expense

A friend of mine once called up to say he wanted to buy 10 lacs of Health cover for his parents. I calculated the cost to be approximately Rs 30,000. Aware of his financial condition, I asked him if he could afford that, to which he replied ‘I might not be able to afford Rs 30,000 today but I DEFINITELY cannot afford Rs 10 lacs if there’s a medical need tomorrow.”

I guess, the above incident is self-explanatory as to Health Insurance is an Investment not an Expense.

Buying Health insurance, simply put, is limiting your expenditure on Health care by being proactive - a type of safeguard against the high costs of medical care. It covers those unfortunate and unpredictable moments in life to which we all are vulnerable every passing second. It is thus an investment and as such a dire need. As an investment we may not get regular returns on it, but when it provides us with better access to medical services and reduces the amount of money we must pay out of our pocket for medical needs, it makes an important asset. Its need cannot be underemphasised either, considering the tough ordeal one undertakes on being diagnosed with an illness and having the need to be hospitalized.

Heart problems, diabetes, stroke, renal failure, cancer – the list of lifestyle diseases just seem to get longer and more common these days. The costs, we all know, are skyrocketing. Again because of high stress jobs, bad eating habits, more and more cars in the city, pollution etc. the younger generation has become as prone to the diseases and accidents as the older one. Those who have health insurance get more preventive care and see a doctor when needed, while those without health insurance may delay necessary medical care out of fear of the high costs.

Investing in health insurance means investing in your quality of life. If you have good health now, you may feel that you’ll never fall sick. This mind set needs to be changed. One visit to a nearby hospital may help you feel contrary. Fortunately we have many good hospitals and specialist doctors – but their service comes at a cost an average man can hardly afford. Only a right health insurance policy can adequately finance such expenses. Yes, preventive care helps and it may prolong the need for insurance. But there is nothing better than knowing you are fully protected.

Overall, uninsured people get about half as much care as the privately insured, as measured in terms of money spent on their care. This discrepancy holds true even when spending is adjusted for age, income, health status, and other factors. In the recent past, even the financial planners are focusing on medical policies and suggesting that one should get his health insurance first after taking the term cover and then look at other investments.

With our government eternally facing the fiscal crisis at both the central and state levels, the already inadequate public health budgets are further shrinking. This, coupled with rising health care costs in wake of the demand for its services and lack of easy access of people, especially from the low income group, to quality health care, increases our dependency on healthcare coverage. Thus, every individual, or the family as a whole, should invest in a quality health plan.