Important Aspects Of Financial Planning: The Policybazaar Show

Financial planning is an all-inclusive assessment of an individual’s current pay and future financial state by current known variables to predict future income, asset values, and withdrawal plans. A financial plan also includes a budget that helps in arranging an individual’s finance and accordingly making plans for specific spending goals or saving for the future. An individual needs to have complete knowledge of all his assets. However, in doing so, people often neglect their health care needs.  

With healthcare inflation being off the charts, it becomes necessary to have proper health insurance cover with an adequate sum insured. However, there has been an increase in awareness about healthcare in the general public. There are essentially three types of health insurance consumers in India. One, the aware consumers who have their health insured with a sufficient cover. Second, consumers who are aware of the importance of health insurance but don't spend enough to get themselves protected. The last is the ‘daredevils’ who are not aware of the importance of health insurance covers and usually have no insurance.

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GROWTH IN HEALTH INSURANCE SALES 

Healthcare insurance in India is one of the cheapest products across the world. The reasons could be the lack of awareness amongst individuals about the necessity of insurance. If expensive covers are added, it will only repel consumers. India also has a diversified market for insurance players with not just a huge consumer base, but also a plethora of competitors which ensures a cheap ecosystem. The regulations set by the Insurance Regulatory and Development Authority of India and other administrative bodies ensure that the insurance market is consumer-centric.  

The growth in the sales of health insurance covers is also a result of the tax benefits. Section 80D of the Income Tax, 1961 allows a deduction of the premium paid from the taxable income. It enables the benefit of a minimum of Rs 25,000 for the individual and the dependent each.  

[ Also read | What Do You Look For In A Health Insurance? The Policybazaar Show]

THE MYTH BUSTER 

An individual buys health insurance only for tax benefits.  

Tax benefits do act as a trigger for individuals to buy health insurance but a step like this is usually taken without proper knowledge about insurance covers.