Gautam Buddha once said, "Every human being is the author of his own health or disease." And nothing can be truer than this. We are the only ones who can control our health, no matter how hard we try to shun off this responsibility. So when it comes to our health, we do the best we can: avoid certain foods, exercise when we can and try to change the lifestyles that we lead. And the one thing we often take for granted is insurance. Now at this point you must be thinking: I already have life insurance. Why would I need one for my health? This is a folly that most people make. Having life insurance is not the same as having medical or health insurance.

If one is to break down our life into phases, broadly there are two important parts - the first when you are young and employed, the second when you retire and are old. In the first stage, health policies can ensure that you have a cover to handle any unforeseen medical expenses and do not to derail your financial wellbeing. In the second phase, the policy is required not just to cover medical emergencies but also long term health care, a concept that is still to catch on in India.

Ask yourself these questions: what would you or your family do if during at any point of life you are stuck by an excruciating illness? How will you financially cope during such a time? Though these questions may be scary, this will give you an idea that you will be prepared financially during such times.

Analyse the current medical situation: While planning for a health or medical insurance, it is important to look at the increasing costs of medical procedures. And with raising inflation, we usually end up underestimating the likely expenses.

Stay away from medical debt: One of the dangers of not opting for adequate health cover is falling into debt due to medical expenses. Having medical insurance will help you to be prepared in case of emergencies and hospitalisations, and not be adversely hit by rising inflation costs.

Look out for a feasible deal: While you are thinking of health or medical insurance, you may feel that going for the cheapest option is the best bet, but read the terms of the policy properly before buying. This becomes necessary as you may realise that several health policies only cover hospitalisation expenses up to a certain level.

Research all the existing plans in the market with your financial planner to select a policy that suits your needs. If employed, don’t forget to ask your organisation about the insurance plans they offer how it can benefit you and your family.

Understand your health insurance policy well: People never pay attention to the fine print. Before you sign over the cheque to buy health insurance, be sure that you know exactly what you are paying for. Don’t be afraid to ask questions, and learn everything about the product that you are buying.

Create a long term health cover: While health insurance covers medical expenses, one does not take into account long term health cover. The need for this arises when one retires around 60 years of age. In several other markets one has the option of buying a long term health cover to manage routine medical expenses post retirement but this is still not popular in India. Hence, you need to start actively working on creating a fund that can function as a long term health cover once you retire.

Build an emergency fund: When a medical emergency strikes, you will not have time to approach your insurance firm immediately for funds and may also not be in the frame of mind to make a claim application. Creating a separate emergency fund for medical emergencies will allow you to concentrate on managing the problem at hand without worrying about sources for funds.

Some would say that the best thing about life is that it is unpredictable. Though you can’t change it, you surely can do your best and be prepared for the twists and turns it presents.

Sumeet Vaid, Founder & CEO, Ffreedom Financial Planners
Source : The Financial Express