Between Life And Health

Health insurance gets short shrift over life insurance, but it is equally important for your financial portfolio, says Nirmala Konjengbam.

- Nirmala Konjengbam

When it comes to choosing between a life and a health insurance plan, most people prefer the former. A life insurance plan provides cover in case of death of the insured, passing on the benefits to a nominee. Health insurance, on the other hand, covers hospital and medical treatment bills. But one can say that life and health insurances are two faces of the same coin as both are equally important for a financial portfolio.

The popularity of life insurance has partly to do with the influence financial agents wield. But, without a health policy, many people end up spending their hard-earned savings on paying medical bills. Some even end up selling assets like land, gold and vehicles to meet the expenses. Yet, others take personal loans to tide over health crises. And paying off interest on a loan means a person ends up spending more than the actual medical costs. Therefore, an extra cover for health will not hurt, rather it will be rewarding in terms of good health and happiness.

Health benefits

A health policy means that you can transfer your risks by paying a premium. But, in case of a preexisting illness, or taking a policy at an advanced age, one ends up paying a higher premium.

Healthcare expenses are rising in India, more so in cities where medical treatment costs are high. Anand Roy, Executive Director and Chief Marketing Officer, Star Health and Allied Insurance says, “Premiums in small towns are relatively reasonable since they do not generally attract high cost of hospitalisation. But there are no apparent disadvantages of buying health insurance in small towns or cities.”