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10 Tips to Reduce Financial Risks With Health Insurance Policy

Team AckoMay 23, 2024

Health issues are becoming increasingly prevalent, placing a heavier burden on individuals. With the rise in ailments, medical expenses are also soaring due to technological advancements in treatments. 

Even a hospitalisation for routine check-up can lead to significant financial strain. As medical inflation continues to outpace income growth, many find it challenging to afford necessary care. In such circumstances, health insurance plans offer a crucial safety net. 

They provide financial protection by covering medical expenses, ensuring that individuals can access quality healthcare without worrying about the hefty bills. Thus, health insurance becomes indispensable in mitigating the financial risks associated with illness and ensuring affordable healthcare for all.

A health insurance plan pays for the medical expenses incurred in a medical emergency and proves financially handy. In fact, you can reduce your financial risks if you are careful when buying medical insurance in India. Do you want to know how? Here are the tips-





10 Tips to Reduce Financial Liability through Health Insurance Plans

Buy a plan early in life: People believe that when they are young, they don’t need health insurance. This is a myth. Even when young, there are chances of contracting infections and falling ill. Moreover, accidents can happen to old and young alike and result in hospitalization. So, you should always invest in a health plan at an early age. You would not only ensure coverage at the earliest, the premiums would also be low.

Cover all your family members: Medical contingencies can strike any one any time. If your family is the victim, you would have to spend a fortune on their treatment. So, don’t only buy a medical insurance plan for yourself. Cover your parents, spouse and dependent children too in a family floater plan.

Cover dependent parents separately: Your dependent parents also require health insurance coverage given their age. However, they should be covered in a separate medical insurance plan. A senior citizen health plan would be suitable for your parents as it would give the desired coverage at affordable premium rates.

Have an optimal sum insured: Health insurance plans prove useful only when they can meet the medical expenses completely. This is possible if the plans have sufficient sum insured. So, when buying health insurance, make sure the coverage is sufficient to meet the expected medical expenses and cover all your family members.

Opt for top-up or super top-up plans for increasing the coverage: If having an optimal sum insured is unaffordable, you should increase the coverage through top-up and super top-up health insurance plans. These plans help in increasing the coverage at minimal premium rates. Thus, your cover is enhanced and your pockets are also not pinched considerably.

Have an independent health plan even when you have employer sponsored health scheme: If you are a salaried employee and have a health insurance scheme provided by your employer, don’t consider the cover to be sufficient. The employer sponsored health plan would have limited coverage amount and features. You should, therefore, have an independent health plan yourself to supplement your cover and also to have a comprehensive list of coverage benefits.

Maternity insurance is helpful: There are various plans of medical insurance in India which offer coverage for maternity related expenses. These plans are also called maternity health plans. These plans, would take care of the high maternity-related expenses and give you financial relief.

Critical illness health plans are a good investment: Critical illnesses like cancer, heart related problems, kidney failure, etc. have become quite common. When they strike, they incur heavy financial losses because of advanced treatments. There are critical illness health plans available in the market which prove to be a blessing against critical illnesses. They pay a lump sum benefit in case of being diagnosed with a critical illness.

Try and avail cashless treatments: Health plans allow cashless treatments if you choose insurer’s network hospitals. When you choose the cashless mode of claim settlement, you don’t have to bear the financial costs upfront. So, choose networked hospitals for treatments and avail cashless claim settlements.

Choose a comprehensive cover: The coverage benefits differ across different health plans. You should compare and choose a plan which has the most inclusive coverage benefits for all-round protection.

If you use these tips, you can reduce the financial risks associated with medical emergencies.

Risks and Consequences of Skipping Health Insurance 

Not investing in a comprehensive health insurance plan can expose you to significant financial risks that could jeopardise your well-being in various ways. Firstly, without insurance coverage, you are solely responsible for bearing the entirety of your medical expenses. Even routine medical procedures or doctor visits can quickly add up, draining your savings and leaving you financially vulnerable. Here are some of the major risks that you should know about:

Blowing up your savings

In the event of a life-threatening illness or a medical emergency, the costs can escalate rapidly, potentially wiping out your savings entirely. Without the safety net of insurance, you may find yourself struggling to afford essential treatments, medications, and hospital stays, leading to compromised health outcomes.

Inadequate Treatments

Furthermore, hospitals and healthcare facilities may refuse to admit or provide treatment if you cannot demonstrate the ability to pay your bills upfront. This can result in delayed or inadequate medical care, exacerbating health issues and increasing the likelihood of complications.

Mortgaging Properties

In extreme situations where medical expenses exceed your financial capacity, you may be forced to resort to extreme measures such as mortgaging assets or taking out high-interest loans to cover the costs. This not only puts your financial stability at risk but also adds a significant burden of debt that can be challenging to repay.

Ineligible For Future Coverage

Additionally, you may become ineligible for future coverage without insurance coverage or face significantly higher premiums following a serious illness, even after recovery. This creates a long-term financial strain and limits your access to essential healthcare services.

The worry and strain of managing medical bills without insurance can really impact your mental and physical health. It might make existing health problems worse and set off a cycle where your health issues get more serious, leading to even more medical costs and stress.

Frequently Asked Questions (FAQs)

Here are some FAQs related to Reducing Financial Risks With Health Insurance Policy


1. What is the importance of investing in health insurance?

Getting health insurance is really important because it helps you avoid paying a lot of money for medical care. If you have insurance, you won't have to use up all your savings or borrow money to cover the costs. It gives you peace of mind knowing you can get the help you need without worrying about money.

2. When should I buy health insurance?

Buying health insurance early in life is wise as it typically offers lower premiums and minimal waiting periods. Starting young allows you to lock in affordable coverage while avoiding pre-existing condition clauses. It ensures seamless access to comprehensive healthcare when needed, providing financial security and peace of mind for the future.

3. Why is it recommended to ensure your entire family is covered by health insurance?

Family health insurance coverage is essential because diseases can affect anyone at any time, and it ensures that all your loved ones are protected under a single plan.

4. What are the benefits of investing in senior citizen health insurance?

Senior citizen health insurance helps address age-related health concerns and allows you to seek necessary treatment without depleting your savings or retirement corpus.

5. How can I combat inflation with health insurance?

Investing in a policy with a high sum insured helps combat inflation by providing better coverage against rising medical costs.

6. What is a top-up plan in health insurance?

A top-up plan is an additional coverage option that provides added benefits for a fraction of the cost after exhausting the sum insured on your basic health plan.

7. Why should I choose a comprehensive health insurance plan?

A comprehensive health insurance policy offers all-around coverage, including hospitalisation costs, surgeon's fees, outpatient treatments, diagnostic tests, and more, ensuring you are well-protected financially.

8. What are health insurance riders, and why are they important?

Health insurance riders are additional benefits that enhance your coverage based on changing needs. They help adapt your medical coverage as your requirements evolve with age or life events.

9. How can I evaluate the financial value of health insurance?

The financial value of health insurance can be assessed by considering benefits like risk pooling, income redistribution, and consumption smoothing. These factors help measure the financial benefits of health insurance effectively.

10. What are some common indicators of financial risk protection in health insurance?

Catastrophic health expenditure and impoverishment are common indicators used to measure financial risk protection in health insurance. It highlights the impact of out-of-pocket payments on households and the need for adequate coverage.

Disclaimer: *Except for exclusions like maternity benefits, undisclosed diseases, etc. Please check policy wordings for more details.
**The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.

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