The role of health insurance in financial planning

Husband and wife namely Ajay and Meena were in the throes of planning their finances and were surrounded by a sense of purpose and papers.

Meena, voiced her concern with a furrowed brow, “Ajay, what if we witness a medical issue? Our savings and investments would be exhausted overnight.”

Ajay said, “Probably yes. That is why medical insurance is essential to add to our planning strategy.”

Meena, “However, what is health insurance, and how do fit this in?”

Ajay, “Just think of the medical policy as a shield for our finances. This is a plan that we purchase that covers the healthcare expenses and surgical costs. Let’s break down the advantages.”

Hospitalisation expenditures

It covers most medical expenditures, such as nursing expenses, room rent and doctor’s charges. That alone can save our savings considerably.

Pre- and post-hospitalisation

It does not end there. It even may involve pre and post-medical expenditures.

Critical illness coverage

And, for the big worries, it covers critical illnesses. If one of us is diagnosed with a severe medical condition, the insurance pays a lump sum amount, ensuring we focus on recovery, not finances.

Meena: “That sounds comprehensive. What else?”

Ajay grinned, “There’s more. Here are the top benefits we can reap by adding health insurance to our financial planning.”

Daily cash allowance

Hospitalisation can be emotionally and financially draining. To ease this burden, health insurance provides a daily cash allowance during the hospital stay. This financial cushion is a practical support system, enabling us to manage incidental expenses, such as transportation for family members or small out-of-pocket costs, without dipping into our savings.

Ambulance charges

In the critical moments of a medical emergency, the last thing we need is to worry about hefty ambulance charges. Health insurance steps in to alleviate this concern by covering the expenses associated with ambulance services. Whether it’s a trip to the hospital or between medical facilities, the financial burden of ambulance transportation is lifted, allowing us to prioritise swift and necessary medical care.

Domiciliary hospitalisation

Sometimes, circumstances necessitate hospitalisation at home. This flexibility is often overlooked, but health insurance recognises this need. If a medical condition requires treatment at home instead of a hospital, the associated expenses are covered. This provision ensures that we have the freedom to choose the most suitable and comfortable environment for recovery without sacrificing financial security.

AYUSH treatments

Health insurance acknowledges the diverse spectrum of medical treatments available, including Ayurveda, Yoga, Unani, Siddha, and Homeopathy (AYUSH). Covering expenses related to alternative treatments allows us to explore holistic healthcare options, aligning with our personal preferences and cultural beliefs.

Organ donor expenses

Organ transplantation is a complex and costly medical procedure. Health insurance goes beyond just covering the recipient’s medical expenses; it extends support to the noble act of organ donation by covering the expenses related to the organ donor. This inclusion not only encourages organ donation but also ensures that the financial aspects do not deter such life-saving contributions.

Second opinion

Seeking a second medical opinion is a prudent approach, especially for complex or critical health conditions. Health insurance recognises the importance of this decision by covering the expenses associated with obtaining a second opinion. This not only encourages informed decision-making but also highlights the value of comprehensive healthcare.

Newborn baby cover

Health insurance takes a holistic approach by extending coverage to the newest member of the family. From the moment of birth, the medical needs of the newborn are covered, ensuring that their health is prioritised from day one without causing additional financial strain.

Maternity benefits

Planning for the future includes considerations for family planning. Maternity benefits in health insurance encompass childbirth expenses, offering financial support during the joyous yet financially demanding phase of welcoming a new member into the family.

Vaccination cover

Immunisation is a crucial aspect of a child’s health. Health insurance recognises this by covering vaccination expenses for our children. This proactive approach aligns with preventive healthcare, promoting the overall well-being of the family.

No claim bonus

Health insurance encourages a healthy lifestyle and responsible healthcare practices. For every claim-free year, a no-claim bonus is offered, typically in the form of an increased sum assured. This serves as both a reward for maintaining good health and an incentive for proactive healthcare management.

Pre-existing diseases

Long-term health planning involves addressing pre-existing conditions. Health insurance acknowledges this by covering pre-existing diseases after a waiting period. This relief ensures that individuals with pre-existing conditions can access necessary medical care without being excluded from coverage.

Cashless hospitalisation

In times of emergencies, the last thing we need is the hassle of managing finances during hospitalisation. Most health insurance policies offer cashless hospitalisation, streamlining the entire process. This means we can focus solely on recovery without the immediate financial burden of hospital bills.

Room upgrade

Preferences in healthcare are personal. Health insurance respects individual choices by covering expenses for a higher room category during hospitalisation. This provision ensures that our comfort and preferences are considered during a challenging time.

Tax benefits

Health insurance not only protects our well-being but also provides a financial perk in the form of tax benefits under Section 80D of the Income Tax Act. This dual benefit reinforces the idea that investing in health is a strategic financial move.

Recovery benefits

The period after discharge from the hospital can involve additional expenses related to recovery. Some health insurance plans offer recovery benefits, covering post-discharge expenses. This comprehensive support ensures a smoother transition from hospitalisation to full recovery.

Health check-ups

Prevention is better than cure, and health insurance emphasises this by often including periodic health check-ups. This proactive approach to preventive healthcare can help detect potential issues early, contributing to overall well-being.

Daycare procedures

Advances in medical technology have led to many procedures that don’t require 24-hour hospitalisation. Health insurance recognises the significance of these day-care procedures and covers the associated expenses, reflecting a forward-looking approach to healthcare.

No-claim period waiver

Certain health insurance policies go a step further by waiving the waiting period for specific illnesses if there are no claims for a continuous period. This serves as an additional reward for maintaining good health and adherence to a healthy lifestyle.


The beauty of health insurance lies in its long-term commitment. Most policies are renewable for a lifetime. This not only reinforces the idea that health is an investment for the long run but also provides continuity and stability in our healthcare planning as we navigate different stages of life.

Global coverage

For those with a global lifestyle, health insurance provides peace of mind by offering international coverage for medical emergencies abroad. This global reach ensures that, regardless of location, access to quality healthcare is not compromised.

Meena, now wide-eyed, realised the multitude of benefits. “Adding health insurance to our financial plan seems like a no-brainer, Ajay. It not only safeguards our savings but ensures we have the best healthcare without worrying about the costs.”

Ajay agreed, “Absolutely, Meena. It is an important investment in our financial and health domain. Additionally, it includes a layer of stability in our plans.”