You may be working very hard to meet the financial goals you’ve set for yourself. But an unexpected health condition may have a huge effect on your journey. And if anyone in your family suffers from a medical emergency, if you are the sole breadwinner in the family, the financial burden could be immense.
A stay in the hospital can burn a big hole in your wallet. Also, it can have a significant impact on your financial health due to the increasing cost of private medical care in the country. Investing in health care is a wise way to protect your finances. When you buy health insurance, you enter into an agreement with the insurer to compensate for the medical expenses.
The pros and cons of Health Insurance
One of the most significant purchases an individual can make is health insurance. So you should fully understand the pros and cons of Health Insurance before making a decision. Here are some pros and cons of Health Insurance:
Pros of health Insurance
According to one report, some people’s health can be improved by health insurance.
1. Keeps You Financially Protected
The most significant advantage to purchasing health insurance is that it protects your long-term savings. You may be saving and investing for goals such as purchasing a home or funding your child’s education. But a medical emergency may require you to liquidate your assets.
If you are still unable to manage your expenses, you can borrow money from family and friends or take out a loan.
All of these factors can have a significant impact on your current financial situation as well as your long-term goals. Because of the increasing cost of quality healthcare, having health insurance will help you.
2. Availability of Options
The days of insurers only offering basic health insurance policies are long gone. Health insurance plans are now available from a variety of modern insurance companies. For example, most insurers now have individual and family floater plans. You can cover yourself with an individual plan. But you can also guarantee the health of your family members with a family floater plan.
3. Cashless Hospitalization
Cashless claims are one of the most significant advantages of health insurance. Most big insurers now have a large network of hospitals across the country. If you have a health problem and are admitted to one of the network hospitals, you will most likely be able to take advantage of cashless hospitalization.
This facility eliminates the traditional claim reimbursement procedure. In this procedure, you were required to first clear the hospital dues before being reimbursed by the insurer. But with cashless treatment, the insurer will cover your hospital bills directly. As a result, you would not be required to pay the high treatment costs out of your own pocket. If you are admitted to a non-network hospital, you will be able to use this service to file a reimbursement claim.
4. No Claim Bonus (NCB)
Health insurance policies also have a bonus program known as NCB. Health insurance policies are usually extended each year by paying the insurance premium. However, if you do not file a claim for the whole year, you will be entitled to receive NCB. This NCB advantage is also available with vehicle insurance policies. However, there is a big difference between NCB for car insurance and NCB for health insurance.
In the case of car insurance, the NCB lowers the annual premium. However, in the case of health insurance, the NCB provides a higher sum guaranteed for the same premium amount.
5. Availability of Add-Ons or Riders
In addition, there are several types of add-ons associated with health insurance policies. Although the add-ons raise the policy premium slightly, they greatly expand the scope of the plan. Even if you are buying a basic health insurance policy, such add-ons will increase the value of your health insurance.
For example, many health insurance policies exclude some critical illnesses, such as cancer or heart disease, or do not cover accident treatment costs. You can go ahead and add a serious illness or injury cover add-on to your policy.
6. Peace of Mind
Another important advantage to having health insurance is the peace of mind it provides. Purchasing health insurance provides a great sense of security, especially if you buy a family floater plan. You feel a sense of security knowing that your health, as well as the health of your family, is completely secured.
Having a health plan relieves you of the burden of worrying about healthcare expenses. Also, it helps you to choose the right medical treatment for yourself and your family. Quality treatment can also accelerate recovery, helping you to recover your health faster than expected.
Cons of Health Insurance
1. Premium Increases with Age
When it comes to disadvantages, one of the most important is the relationship between health insurance premiums and age. Your age is a significant factor in deciding the premium on your policy. If you buy a health insurance policy when you are 30 years old, the premium amount will be significantly different than when you buy one when you are 50 years old.
In fact, once you reach the age of 60, it is difficult to find a health insurance policy. Because the risk for developing a health condition increases significantly with age, insurers account for the increased risk by charging a higher premium. This is why we recommend that you purchase health insurance when you are still young.
2. Waiting Period for Existing Health Problems
Most health insurance plans often have a pre-existing disease waiting period of up to 2-3 years. Suppose you are already suffering from a health problem such as high blood pressure, diabetes, thyroid disease, or another at the time you purchase a policy. In that case, any medical costs caused as a result of these conditions will not be covered until the waiting period has expired.
You must pay healthcare expenses even though you have health insurance because this is one of the most major drawbacks of health insurance policies. This is yet another reason why you should buy health insurance when you are young and healthy. However, there are now insurance policies with shorter waiting periods.
3. Co-Pay Clause
Many insurance plans have a co-pay or deductible clause to avoid false claim filing. If the policy you bought has a co-pay clause, your medical expenses will have to be shared by your insurance company. The co-pay is calculated as a percentage of the overall healthcare bill.
For example, if your insurance has a 20% co-paid clause, you will be required to pay 20% of your hospital bill. And your insurer will pay the rest. Such clauses are now often found in low-cost insurance plans that attract people with low premiums. Before buying a policy, you should always read the policy document carefully to ensure that you understand the inclusions, exclusions, and other clauses.
The Bottom Line
You should be able to make the right decision now that you are aware of the pros and cons of Health Insurance.
There are a few disadvantages. But it is clear that health insurance is still necessary for everyone, regardless of age. In fact, the younger you are when you buy health insurance, the more advantageous it is.
So, start looking at the various types of health insurance policies available to find the one that best meets your needs. Make sure that you choose a feature-rich policy from a reputable insurance company in order to protect your health in the best way possible.
