This is a story about Vandit and Mehek. Vandit is working in a top-end IT Company in Mumbai and Mehek, his friend, is working in a foreign Bank and aspiring to be a Financial Planner soon.

A month ago Vandit lost control on his bike due to a pothole and suffered minor bruises. That night’s phone call:

Mehek: Van, I hope you are sure that you don’t need any further medical checkup.

Vandit: Ya, I am sure. Don’t worry so much, but it was very close … I must say that, otherwise my entire savings would get wiped out.

Mehek: Even that would not suffice the cost, you would have incurred otherwise, you know! By the way do you have any health insurance cover? (Though the more familiar term is ‘Mediclaim’)

Vandit: Ok, that I think I am covered some way or other by my company, if I am not wrong.

Mehek: That is not enough, my dear. Anyway, it is past midnight. We will talk later on this. Good night.

Vandit: Good night.

The following weekend at a restaurant in Bandra:

Vandit: Meek, I thought about that and searched also to some extent. But still I am not convinced that why should I buy one when I am covered by my employer.

Mehek: Ok. Here we go –

(1) You don’t know the full features of that policy and the conditions mentioned there. The worst part is that post recession companies are making major changes in employee benefits programs without any notice. So we all may get caught unaware, if we blindly bank upon that.

(2) Lets accept that we change jobs often. Now when in transition we are not insured for a certain time period, which is very risky. Your individual health cover will remain with you all the time.

(3) No Health Insurer covers any expenses due to any existing illness unless he/she completes 3 years or more with the policy. So even if you complete, say 2-3 years with your current employer before you make a switch, for your health insurance it would be like starting afresh. So you are again without cover for your existing illnesses. So, you see, how bad is that.

Vandit: Ok, that’s enough for me to buy your point.

Mehek: You know, there is more. You can save by claiming tax deduction of upto 15K for the premium you pay. Get Set Go my dear, what are you thinking of? This is not like deciding whether to buy Xbox or Playstation, this is something which you must have. Treat this as mandatory, not luxury.  

Vandit: *Rolling his eyes* Okay Meek, surely I will get one soon.

Mehek: *dips her Churro in White Melted Chocolate and stuffs it in her mouth* You see medical costs are too high now. We are finding it really hard to save anything at the first place, so you buy this health cover first, which I think would not cost more than 5k a year, then start putting at least 2-3k every month in a good diversified equity scheme, so that you can reach some or other goal sooner or later.

Vandit: My dad would be so happy to know that I started taking such things seriously.

Today:

Vandit is now covered under a Health Plan with a cover of 5 lakhs with a Critical Illness Option. So whenever he zooms in his bike to and fro office or when he just explores his newly bought Xbox, he finds himself much relaxed thinking that at least he has taken his first step, may be a tiny one, towards his Financial Planning.