The Policy Bazaar show is a brand- new series that decodes the grey areas of purchasing insurance. Through the 26-episode series, the show will highlight and discuss a magnitude of topics essential to everyone trying to secure their future. From purchasing the right cover, to switching policies while shifting jobs, to ensuring a comprehensive child cover, insurance experts deliberate, simplify and shine light on the complexities of purchasing insurance in India.
In this week’s episode, our eminent anchor Vivek Law will be talking to Amit Chhabra, Business Head, Health Insurance, policybazaar.com and certified Financial Planner, Surya Bhatia about the basic aspects of financial planning and the necessary elements that are to be kept in mind while planning.
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 a complete knowledge of all his assets. However, doing so, people often neglect their health care needs.
With healthcare inflation being off the charts, it becomes necessary to have a proper health insurance cover with an adequate sum insured amount. However, there has been an increase in the awareness about healthcare in the general public. There are essentially 3 types of health insurance consumers in India. One, the aware consumers who have their health insured with a sufficient lump sum. Second being the consumers who do not have enough knowledge about insurance caps. The last are the ‘dare devils’ who are not aware about the importance of health insurance covers and usually have no insurance.
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 the health insurance covers are 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 a benefit of a minimum of twenty-five thousand rupees for the individual and the dependent each.
An individual buys health insurance only for tax benefits
Tax benefits do act as a trigger for individuals to buy health insurance but however, a step like this is usually taken without proper knowledge about insurance covers.
Watch to know more about the essential aspects of financial planning