Planning Personal Finance? How assured are you?

Neeraj Basur

If you think you have rightly planned your personal finance, check where does medical emergencies fit into it

It is interesting to think about the real costs associated with managing health. We normally do not think of health management in cost terms probably because we want to believe we are healthy and nothing can go wrong with us. But well, how good would it be, if delaying a problem would solve it!

Reactive management of health issues have a lot of hidden costs associated which we never take into account. Consider the case of a person affected by an accident. The obvious costs which come to mind are those related to hospitalisation, the treatment, tests and medication. But the costs which escape our attention are many—loss of income (because of absence from work), drop in productivity in case of disability, change in lifestyle, negative effect on the lives of others in the household and the disruption thereof. You add them up and these pile up to something which is more than what your initial guesstimate would have been. The risks of ending up in a hospital due to an illness, meeting with an accident or developing a critical illness have always been there.

Now if I were to ask you whether you see these happening more often today than a few years back, your answer would probably be a yes. Our sedentary lifestyles make us ever more vulnerable to life style diseases like diabetes and cancer. Between 3 and 4 million vehicles are added each year in India, clearly outpacing the efforts to grow the infrastructure. Good reason to believe that road accidents are destined to increase. To add to the misery, healthcare costs have sky rocketed. Bottom-line is that being assured against health eventualities requires meticulous planning.

At the time of any illness, one worries about getting well soon, while at the same time also ensure that it does not pinch the pocket hard. Medical insurance policies definitely help achieve this objective and thus their growing importance while planning one’s personal finance. This makes us come back to the question I wanted to address – how assured are you against illness and where does it fit in your personal finance? Question yourself if you would be able to deal with the costs that disease, hospitalization and accidents bring along with them?  You need to ask yourselves – how much cash I might really need to fight through a sudden eventuality? Are all or most of the possible eventualities covered? And finally, do I have flexibility in how I use the amount I can claim? These should give you a reasonable idea of how assured you need to be. If the answers to these questions are unclear, the time to act on it is now.

I see the momentum building from here on to build more innovative and need based products. All of this means, increased choices for the customers so that they can face sudden eventualities with confidence. But most importantly, if you think you have rightly planned your personal finance, check where does medical emergencies fit into it.

The author is Chief Finance Officer, Max Bupa Health Insurance

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