(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers investment solutions through i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com)
Financial Planning Tips: Health Insurance:
Having a separate health cover, apart from what your company provides, makes a lot of sense. Going forward the current generation will confront health care concerns as we are the in the age of rapid lifestyle changes and stress filled careers. All studies point out to the rising health scares in the future as well and compounded by the rising health care costs. With very few exceptions, most diseases are curable these days, thanks to the innovations in the fields of medicine and technologies. But such innovations and life extending technologies come at a huge cost to the people availing health care benefits. This with other factors necessitate one to have a comprehensive health care cover.
Look at the 7 reasons why one must have a health insurance cover right now:
1. Your company's group health insurance cover you, but may not be sufficient:
Employees and their dependents by and large are covered through group insurance in respective organizations. But many a time, such covers are not sufficient though. For a family of 5 (Husband + wife + kid + dependent father + mother) even a cover of 10 lacs may not be sufficient. But in many organizations, cover may not even exceed 3 - 5 lacs for the total family. Having an independent health cover is paramount, because no one these days work for one organization for their life time.
2. Risk for dependent parents:
Many organizations have little or restricted covers for the elder dependents, as the risk premium is high on them for the organizations. It is important to have a separate cover for the dependent parents/senior citizens for which one can avail tax rebate under Section 80D. Remember, beyond 60s, taking a health cover for the elderly becomes really tough as the age and health factors make it expensive and cumbersome. Remember during the times of medical emergencies, their health care costs can drain your hard earned savings.
3. Job changes:
In the current career trends, people do not stay with one organization for ever. People keeping moving from one to another at a reasonable pace. The present organization may not offer something similar to what the previous organization offered on group health cover. The vagaries of such changes can be negative many times. One will be left with no cover during the times of transition, from one job to another.
4. Health care costs sky rocket:
Health care costs are set to sky rocket in the future. Thanks to innovations in the field of medicine, most diseases are curable these days with very few exceptions. But unfortunately, such innovations come at a huge cost. Be prepared for such sky rocketing costs in the future.
5. Only you retire, not your needs:
Our generation may not have a predictable retirement lifestyle, given the fact that private sector does not provide us social security post retirement. With the break down of family systems, retirement life will be largely independent and lonely. Health care costs will be an important component in the retirement life. Take a comprehensive health cover now which can come along with you till your life time. Be prepared in a smart way.
6. When PRETIREMENT is the order of the day:
This generation is not fancied about working the usual way for too long... It can be starting our own venture, doing social work, pursue dreams etc., All have aspirations and ambitions of chasing our dreams in life. I don't see many of us working beyond late 40s and 50s... Be prepared for such circumstances by proper planning. Everyone wants to Pretire and not retire.....
7. Tax benefits under section 80D:
Government extends tax concessions for medical insurance premiums under section 80D. This section allows you to take the benefit for the premiums paid upto Rs 15,000 for self and family, and upto Rs 20,000 for dependent parents. So go ahead and plan your medical insurance and enjoy the tax benefits too....
(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers investment solutions through i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com)
