Saving for Medical Expenses vs. Hospital Insurance
In their youth, people often overlook the fact that their life is vulnerable to diseases and accidents. Preparing for medical emergencies is considered rather low in the hierarchy of needs.
However, you cannot tell when you might have to face crises. Therefore, being prepared in advance for medical emergencies should be a practical thing to you. There are many medical aid insurance covers available in the market for your needs. Hospital insurance is one of the things you can opt for as a young professional.
Even so, quite a few people think that saving for medical expenses on their own is enough insurance. This may be true if you never fall seriously sick or suffer an accident. But, life does not come with such guarantees.
Hospital insurance cover is an insurance cover that affords you the expensive services of a private hospital. There are various hospital insurance schemes in the market and you can opt for the one that meets your needs.
Hospital insurance is usually cheaper than a comprehensive medical plan. The cover includes the room, fees and other ancillary expenses in case of hospitalisation, which can be exceedingly high.
Comparison of hospital insurance with personal savings for medical expenses
Let us see the benefits and limitation of having hospital insurance as opposed to personally saving for medical costs.
1. The cost of hospitalisation is one of the highest expenditures you can make in your lifetime. The expenses can be so high as to eat into your personal medical savings and still leave you with outstanding debts.
This could be financially crippling for any individual. However, with the cover of hospital schemes, you can reduce the burden on your own pockets.
2. Hospital insurance claims can be honoured only if the member has been hospitalised. Hospital cover may also allow for some expenses related to hospitalisation such as medication, surgery, consultant’s fee etc. to some extent.
However, any expenses other than that covered under your insurance will need to be borne by you. Therefore, having some savings allocated to medical expenditures in your personal savings proves to be a bonus.
3. Very often, we are required to visit general practitioners and other specialists without the need of long stays in hospitals. Any outpatient medical expenses are not covered by your hospital insurance.
In such cases, having a personal savings for medical expenses allows you the chance to avail the facilities of specialists and other costs such as medication.
4. Most hospital plans have a waiting period before which the company would honour any claims. This is true especially in case of pre-existing conditions.
If you suffer through an emergency during this wait period, you need to have a concrete backup plan. For such emergencies, it would be useful if you have some money in your bank account to meet your needs.
5. Every hospital insurance plan requires a premium that needs to be paid to the insurance company. In case you never have to avail the services of a hospital, that money will not be returned to you. However, if you have medical savings the entire sum if unused can remain with you for other uses.
In conclusion, even though having money saved personally for medical expenditures is wise, having hospital insurance provides a greater cover for you. Your personal savings may not stretch to high hospital bills. With a hospital plan, you can rest assured that your personal finances will not be compromised by a lengthy stay in the hospital.