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Strategic security system against healthcare expenses

Fact No.1: Health issues are multiplying

Fact No.2: Healthcare expenses are ballooning

Fact No.3: Health insurance premiums are swelling 

Result: While even one instance of a serious illness can seriously threaten your finances; the matter does not simply end with merely buying a health insurance policy 

Conclusion: We all must build a strategic security system.

The five layers of a typical protection plan against mounting medical bills are as under:

Layer 1: The first obvious step is to buy a Conventional Medical Insurance policy. For a normal family, a cover of say around Rs.3-5 lakhs would, in most instances, take care of the expenses on account of hospitalization due to normal illnesses

Layer 2: Of course, Rs.3-5 lakhs cover is the bare minimum. But, a standard policy with high cover could be quite expensive. As such, instead of buying a large cover, take an average cover as mentioned in Step 1 and supplement it with say Rs.5-10 lakhs of a Super Top-up Plan.

Layer 3: With normal illnesses take care of by security layers 1 and 2, we now need protection from serious illnesses. Critical Illness cover of say Rs.20-50 lakhs, depending on one's budget, would be our shield against grave threats.

Layer 4: Not all expenses are covered under the conventional policies. But these allied expenses normally account for only a small percentage of the total cost. So one can either create a small corpus to meet them or buy a nominal Daily Hospitalization type of insurance plan, that provides a fixed sum on per day basis of hospitalization.

Layer 5: Taking too many policies or very large covers can become a burden on the pocket. And, given that the premiums increase with age, this burden will only grow as you grow older. As such, relying 100% on insurance plans is not advisable. One has to build a medical corpus too (on the lines similar to the retirement corpus). Suitable balance of own money + insurance money would be a more prudent approach.

Of course, no security system is 100% perfect. Nevertheless, planned security is any day better than nil / minimal security. Since the threat levels are quite significant and the probable damages immense, you cannot be complacent about your family's and your financial well-being.

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