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Is health insurance premium a waste of money?

by Shatakshi Gupta

Insurance provides you with peace of mind. At least, that’s what it’s supposed to be. Is it, on the other hand, absolutely necessary? Certain types of insurance are a waste of money, and it is critical to understand the concept of being overinsured.

Identifying which insurance products are a waste of money can help you save money over time. The method for saving money is simple: you assess your spending, determine what you can do without, and make the necessary adjustments. The same could be said of insurance.

You should carefully examine the amount of money you are paying for insurance. Many people waste thousands of rupees each year on insurance that they don’t need or that provides insufficient protection. This could also apply to you. But this doesn’t  mean that health insurance premium is a waste of money. Here in this article, were are telling why health insurance premium is not a waste of money.

What causes people to believe that health insurance is a waste of money?

Purchasing health insurance premiums is viewed as a “waste of money” by many. What good is paying long-term insurance premiums if nothing happens? In contrast, our grandparents have never had health insurance and are in excellent health.

What is the point of paying for something if there is no real risk involved? They’re here to make money, deceive clients with flashy marketing materials, and, at the end of the day, to reject promises.

The premiums can be saved each year, and if a hospitalisation occurs after ten years, the funds can be used to cover the costs.

No transactional benefit:

Read more: What is a multi-year health insurance? Know 5 benefits of it

Many people have a transactional benefit attitude, which means they expect immediate gratification in exchange for their investment.

As in going to the movies and paying to see a movie. What you pay for is what you get. Amazon TV orders are delivered right to your door! What do you get in exchange for paying your health insurance deductible?

A promise made by the company. Just a guarantee that your future medical expenses will be covered if they arise? These people struggle to see the benefits in terms of future probability and potential outcomes. It all boils down to having a short-term mindset and failing to see the big picture.

Even investors who buy health insurance premiums let the policy lapse because they are tired of seeing their money go to waste!

Sense of overconfidence

How can some people have such a firm belief that “nothing bad will ever happen to me”? Many people, though they may not express it, believe that they are less likely to experience a negative outcome. All of this has happened before to other people.

A person who dies in a car accident or is diagnosed with cancer has the same “Nothing will happen to me” assurance 5 minutes before the disaster occurs. This is the case for everyone. Because “we are cautious,” I believe it is immature and foolish to believe that nothing will happen to me or my family.

If you exercise caution, the chances of something bad happening to you are reduced. That’s all; nothing to worry about. Don’t get wrapped up in your own little world.

Fear of wasting resources

It is absurd to believe that your insurance payments are a waste of money if nothing happens to you. If you don’t catch COVID while wearing a mask, does it seem like a waste of time?

Was the helmet a complete waste of money if you didn’t get into an accident? Did you appreciate the sense of security it gave you, as well as the serenity it instilled in you? The most disheartening aspect is that your health insurance is a complete waste of time and money.

What are the benefits of purchasing health insurance?

A health insurance plan provides significant financial assistance in the event of a medical emergency.

Expenses associated with serious diseases such as cancer, heart disease, and so on can have a negative impact on a person’s financial situation.

A health insurance plan may provide you with significant financial protection, covering the costs of treatment both in India and abroad. Instant payments for greater financial flexibility are also included, as are hospitalisation fees, diagnostic costs, ambulance expenses, and pharmaceutical costs.

Risk Assessment is must

Every aspect of one’s life contains varying degrees of danger. Accepting the risk, lowering it, or shifting it are all viable options! The transfer of risk of very large medical expenses to insurers in exchange for a yearly premium is a key concept in the world of health insurance.

If someone refuses to pay the premium, it means they recognise the possibility of having to pay a large sum of money for medical reasons in the future.

It is possible to amass so much money that it completely erases your years of hard work. In other cases, you may contract a disease that necessitates frequent or ongoing hospitalisations, which can be extremely costly to your financial well-being and lead to financial ruin. It is entirely up to you whether you want to assume these significant risks or pass them on to the insurer.

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