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smartcat
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Joined: 29/Mar/2007
Location: India
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   Topic: Is health insurance really necessary?
Posted: 26/May/2007 at 11:13pm |
Last week, my mom had an unfortunate accident at home and was hospitalized for 2 days. The bill was Rs. 15,000 and it was covered by Mediclaim policy. I might add that this was a cashless facility and during our hour of crisis, we didn't have to worry about money.
All that's great - but I asked my dad how much he had spent on health insurance premiums for the family so far - the amount was close to Rs. 2 Lacs. And this was our first claim in the past 15 - 20 years! (The coverage is for Rs. 1 Lac for 4 members of the family).
This got me thinking - Is health insurance really necessary? If the premium amount was invested in a equity mutual fund or shares, we would be sitting pretty on atleast Rs. 20 Lacs liquid assets.
I have a very specific question - my networth is pretty decent. Almost all my assets have pretty decent liquidity (MFs, equities, liquid MFs, cash). I'm 28 year old male with no dependents. Do I need health insurance? Can't my assets/networth take care of any health emergencies?
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basant
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Posted: 26/May/2007 at 11:41pm |
All that's great - but I asked my dad how much he had spent on health insurance premiums for the family so far - the amount was close to Rs. 2 Lacs. And this was our first claim in the past 15 - 20 years! (The coverage is for Rs. 1 Lac for 4 members of the family).
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There are some areas where we should not lok at profiteering. If you think of recovering money from a health insurance the only way that is possible is by getting sick!!!
SOmeone said the same thing about Life insurance. It is better that we have a negative income statemenmt when it comes to these things. It does give us mental comfort though.
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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smartcat
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Posted: 26/May/2007 at 12:48pm |
So people of all ages require health insurance? Personal networth doesn't matter at all?
For myself, I see only road accident (or a branch falling on my head) as a major health hazard. For me, ICICI Lombard has quoted a premium of Rs. 2,500 per year for a Rs. 3 Lac coverage. I'm wondering if I should take it.
Anothing thing - I noticed that hospitals are fleecing the insurance companies. The diabetes doctor who checked on my mom charged the insurance company Rs. 1,500 per consultation. But my dad goes to him regularly - he charges Rs. 200 per consultation (since insurance is not claimed).
I fear that 'unnecessary' purchase of health insurance will increase the overall healthcare costs - like in the USA. High healthcare costs will increase the health insurance premiums for everybody - thereby affecting those who really need health insurance (those with cash flow problems).
This logic seems to be a bit convoluted I know!
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omshivaya
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Joined: 06/Sep/2006
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Posted: 26/May/2007 at 1:32am |
Smartcat jee, it is better to see insurance as a risk cover and not investment. That is why when I have dependents, I plan to take a pure term cover, which usually gives cover around 200 times THAT of the premium per year. In mediclaim also, look at it as simply risk cover.
I would personally go for life insurance when I ahave dependents or when I am the MAJOR breadwinner in the family and mediclaim when I am a bit older.I would never EVER EVER go for an ULIP: for that it is better to go for puer term cover for insurance and mutual funds for invesments.
My two cents. Hope it helps, though I think you only had asked about medical insurance.
Edited by omshivaya - 26/May/2007 at 1:38am
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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
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smartcat
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Posted: 26/May/2007 at 1:37am |
Om Ji - we both are awake and hanging out at TED at 1:00 AM. I wonder if its possible to do that when we have dependents 
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omshivaya
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Posted: 26/May/2007 at 1:41am |
Well, yeah sure! Impossible is nothing in this universe!!!!
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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
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smartcat
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Posted: 26/May/2007 at 1:48am |
Biwi driver ke saath baag jayegi... and you will blame poor Basant. 
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omshivaya
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Posted: 26/May/2007 at 2:06am |
If you think your wife would run away with the driver if you spend on TED, then better not marry brother. Why will you blame Basant sir pray tell And anyway, I have a perfect solution for you. Dont keep a driver. Khudh hi biwi ka driver ban jaana.
But wait..usme ek aur problem hain. Ghar mein aapke bawarchi wagerah to nahin hain??
Anyway, dont worry about me. I have no plans on getting married for a long time so my case rests hehehe.
Edited by omshivaya - 26/May/2007 at 2:09am
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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
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