The cost of treatment is increasing. If you have to be admitted to the hospital, then there is a risk of a long bill. There is no shortage of such examples where the hospital bill has worsened the family’s financial condition. So what can you do?
Today let’s discuss two options: Health Insurance and Medical Loans, There are some good and bad things in both. Let’s see which one is the better option.
What are the problems in getting health insurance?
In health insurance, you pay some premium every year. If admitted to the hospital, the insurance company bears the cost of the treatment. If not claimed, the premium is not refunded. Do you know what the problems are?
- You keep paying the premium. It may happen that you may not have to claim for many years. You will feel that your premiums of several years have gone waste.
- The premium is increased every year. Sometimes the premium can also increase up to 30-40% in a year. If for some reason you are not able to pay the premium, then all the hard work goes in vain. If you never even make a claim, then all the old premiums also go waste.
- It is also difficult to trust the insurance company. You paid the premium for many years, when it came time to claim, the claim was rejected by giving some ridiculous reason.
- Insurance companies do bullying in many other ways as well. If you have a cheap insurance plan, she will force you to cancel it and buy a new expensive one.
- Elderly people find it difficult to buy health insurance. Also, if you have a pre-existing illness, it will be difficult to get health insurance. The insurance company will reject your application or the premium will be very high.
- The insurance company does not cover certain types of hospital expenses. You will have to pay for these from your pocket.
Read: Which is the best health insurance company? (Information on health insurance claim settlement ratio)
What are the advantages and disadvantages of a Medical Loans?
A medical loan is just a type of personal loan. Just understand that the loan amount is sent directly to the hospital instead of coming to your bank account. In some medical loans, the amount can also come in your account.
You will take a medical loan only if it is necessary. You do not need to pay a premium every year. In some cases, you can also get a discount on the hospital bill. The rate of interest can be lower than a personal loan.
You can take a medical loan if money is required for medical expenses. Read this post to know more about Medical loans.
Now the question comes, of whom to trust, health insurance or medical loan?
What is better between a medical loan and health insurance?
In my opinion, taking health insurance is a better option.
Let us see why.
I agree that if you make claims for many years, you will feel your premiums have gone in vain. Better than this, you would have invested this money somewhere and got some returns. When the time comes, you can withdraw this money and spend it on medical treatment. But, there is a problem here. There is no assurance of life. You have paid a premium of Rs 20,000 for 10 years and need to claim Rs 5 lakh directly in the 11th year. If this happens, you may not find your premiums for the last 10 years to be such a waste.
If you had invested this money instead of paying premium, then you could have used this money for treatment. But once this money is spent, it will be finished. The health insurance limit resets every year. Means you can claim further. Let us understand with the help of example.
You have an insurance of Rs 5 lakh. You bought the policy on June 1, 2018. Your policy year is from 1st June to 31st May. You claim the entire Rs 5 lakh in one policy year. You will not be able to make any more claims in this policy year as your insurance limit has been exhausted. Your policy year will end on May 31, 2019. From June 1, 2019, your limit will be reset again. This means from June 1, 2019, you can again claim up to Rs.5 lakh. This will happen every year. If you had deposited money instead of paying premium, then that money would have been lost. What would you do next?
Sometimes such a disease also occurs, where you have to be admitted to the hospital again and again and the expenses keep coming. In such a situation, health insurance policy can be very beneficial.
In medical loan only you get money loan. You will also have to repay this money along with interest. The rate of interest can also be high. Also, what is the guarantee that you will get medical/loan? What will you do if you do not get a medical loan when you need it? How will you or your family members be treated? If there is such a disease, where you have to be admitted to the hospital again and again, then how many times will you take the loan and how will you pay it?
Note that in health insurance you only have to pay the premium. The insurance company pays the claim and you do not have to return anything to them. If you took a loan of 5 lakhs in medical loan, then you will have to return 5.5 lakh rupees.
Tax benefits are available on the payment of health insurance premium. No tax benefit is available on the payment of medical loan.
Read: Avoid These Mistakes While Buying Insurance?
What should you do?
According to me, you should have health insurance. If your employer provides you with insurance, then you can take some relief. But keep in mind that the insurance provided by the employer is only till the time you are employed.
Also, keep saving a little money and make a medical fund. You can keep this money in a fixed deposit or liquid fund. You can also use it along with medical insurance if needed. Relying on medical loans is not a good option.