The importance of health insurance

Studio equipment at home or in your professional environment is an income-generating asset. At the time of purchase, you can opt for extended warranties for the gear (when available), and even buy a protection plan for your iLok-based software licenses.

Have you ever wondered why you do what you do? Well, here’s why…

If that product needs to be repaired it can be done at a low cost, when covered under a company warranty. This protects your purchase without you incurring any substantial outgoing at that point in time. It also prevents you from upsetting your financial plans by buying another expensive product to do that job. So, you pay a small amount annually to ensure peace of mind and protect your ongoing and future income.

Now. Think of yourself as an income-generating asset. You are at the top of the income-generating asset pyramid. This is true for all other machines that run and produce what you want and because you want them. It is YOU who runs the show. YOU are the opera conductor 🙂

If YOU were to be “repaired” (read fall sick), the other studio machines you own would also stop performing or be of no use to you at that point. Consider what would happen.

1. A large amount must be spent, which affects your income until you return to work.

2. You have to make a forced sale of your investments.

3. Possibly borrow money at high-interest rates, or take an obligation from friends and family.

4. Liquidity evaporates – since you may have to dip into your long-term or retirement savings for such repairs until you are back in action.

5. Your financial goal of holidays/buying a house/child education/luxury expenses is pushed back by years.

Not a pretty picture. Right? No! It is a problem (well, a potential one) for which a simple solution exists!

You can purchase a simple floating health insurance policy for your family and yourself. Of course, if nothing happens on your health front, that is well and good. However, if a sudden or unexpected need arises, an active medical policy will be helpful.

The costs are minimal, and the benefits are astounding. ( Read points 1 to 5 again )

If you have not explored this option yet, please do so ASAP. At older ages, it becomes tougher to get, and the annual AMC (read premium) becomes more expensive too. Nowadays, with medical costs increasing faster than our incomes, it makes sense to be protected on the health front. And the earlier you do it, the better for you.

The following is a rough example of premium (AMC) payable on your own health insurance, as a self-employed professional as on April 1, 2021 – worked out from an online health insurance calculator. The premium amount will vary based on your current age, the number of members in the family and their ages, as well as on pre-existing medical conditions (if any).

Benefits offered by most private health insurance companies are similar but never fall for cheap premiums, as they tend to have limited benefits / hidden costs.

Consider all possible scenarios carefully before selecting a floater plan and always check details like:
– what illnesses are covered
– hospitals in your city covered by the provider
– room type allowed
– pre and post-hospitalization cover
– are there any hidden terms or fees?
– agent/company assistance should be available at times of need too

As an icing on the cake, health insurance premiums are tax deductible up to Rs. 25000/- every year. This is an additional benefit, over and above your normal PPF and LIC investments. So your effective outgo reduces even further!

Staying safe is the need of the hour. But an annual health plan is necessary at all times.

P.S. Contact a trusted medical insurance agent you or your friends may know of, OR evaluate online the health policies offered by various respected companies. Choose wisely.