Healthcare to home repairs: how to plan for emergencies

More households are setting up dedicated reserve funds for unexpected, uninsured expenses

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A few years ago, when Prasanna Singh a Delhi-based entrepreneur, went to get dentures for his father, he was taken aback to learn that it would cost lakhs of rupees.

“Dental costs are crazy,” said Singh, adding that they are often not covered in typical health insurance plans. He decided to start a separate systematic investment plan (SIP), specifically to save for dental costs and invests ₹6,000 in an index fund.

Life can bring surprises and costly bills in many forms. Medical emergencies not covered by standard health insurance like dental, vision or hearing treatments, can be significant. Health issues for pets or uninsured family members can create financial strain. Homeowners may face major renovation costs, like replacing termite-damaged cupboards, repainting after a tenant leaves, or covering expenses excluded from vehicle insurance.

Financial advisors recommend setting aside money for unexpected large expenses. This is in addition to an individual or family's emergency fund and regular savings plans, which typically cover goals like retirement or children's education.

Insurance shortfalls

Singh shared the experience of a friend who owned an electric scooter. A rat bit through some wires, and when he went to get it fixed, the company representative said the motor needed replacement. However, the insurer said rat bites were not covered. “His reaction was: I'm gone,’ said Singh. “He was counting on the insurance.”