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Advantages and Disadvantages of Health Insurance


Advantages

Rising costs of healthcare as well as the evident need for adequate healthcare today makes health insurance a definite must. When it comes to critical illnesses, the strain that it can put on a family's wellbeing is undeniable, leaving people to turn to their life savings for aid.

This however, does not ascertain a concrete solution due to inflation, meaning savings are rarely sufficient to meet such healthcare expenses.

In a typical average Indian household, the male head of the family is usually the only earning member with about 3-4 dependants. Often times, if the primary breadwinner’s ability to work is compromised due to a major illness, the rest of the family remains in dire straits. It would not be possible for them to sustain their lifestyle, repay debts or even afford the high costs of treatment.

Health Insurance is important because

  • Lifestyle related ailments are common these days
  • Healthcare is becoming increasingly expensive
  • It is difficult for a family to quickly arrange for huge amounts of money required for treatment
  • Most of the savings of a family are in the form of fixed assets, which cannot be liquidated quickly

Disadvantages

One of the main disadvantages of having health insurance is the cost. Health insurance can be very costly even for those that have a health insurance plan through their employers. Costs may be so high that many end up struggling to make payments. This can be quite challenging for those who have low incomes or are self-employed. Health care coverage for families may cause an added financial burden.

Pre-Existing Exclusion

Another disadvantage would involve people who have a pre-existing illness. They have to undergo a waiting period which is typically four years. Insurers typically require you need to wait for four years for any pre-existing illness to be covered. This becomes a major obstacle for older individuals with pre-existing medical conditions. This is particularly so because pre-existing illnesses doesn't only include illnesses you may have received treatment for in the recent past. It includes illnesses for which there were signs or symptoms in the 48 months prior to the payment of the first premium.

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