The importance of Health insurance

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

Ever thought why you do this? Well, here’s why…

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

Now. Just think of yourself as an income-generating asset. YOU actually are at the apex of the income generation asset pyramid, as all other machines that run and produce what you want and because you want. It is YOU who run the show. YOU are the conductor of the opera 🙂

If you were to be repaired (read fall sick), then the other machines you own would too stop performing.  Consider what would happen.

  1. A large amount has to be spent on your repairs, which affects your income till you get back to work.
  2. You have to make a forced sale of your investments.
  3. Possibly borrow money at high interest rates, or take obligations from friends and family.
  4. Liquidity evaporates – since you may have to dip into your long term or retirement savings for such repairs, till you are not back in action.
  5. Your financial goal of holidays/buying a house/child education/luxury expenses is pushed back by a number of years.

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

Take an annual maintenance contract on your health, and also for your family members with a simple floater Mediclaim policy. If nothing happens on your health front, ofcourse it is well and good and is what i pray for one and all. However, if a sudden or unexpected need arises for your repairs, an active medical policy will take care of it.

The costs are minimal, and the benefits 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 at a faster rate than our incomes, it makes sense to be protected on health fronts. And the earlier you do it, the better for you.

Given below 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 private calculator of a private health insurance company*. The premium amount will vary based on your current age, number of members in the family and their ages, as well as on pre-existing medical conditions (if any).

Your Age
(in years)
Number of Members Amount covered (Rs.) ANNUAL health insurance premium (Rs.)* MONTHLY
(approx. Rs.)
25 1 (self) 5,00,000 8,500 700
30 Self + Spouse 5,00,000 12,500 1,000
42 2 Adults + 2 Kids 5,00,000 19,500 1,750

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 costs?
– agent / company assistance should be available at times of need too

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

Stay Home and Stay Safe is the need of the hour. But an Annual Health Plan is a must at all times.

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

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