Personal Finance News
4 min read | Updated on May 30, 2024, 19:17 IST
SUMMARY
Young adults and retirees are facing the brunt of rising healthcare costs. People with high health risks or with limited insurance coverage - all need a medical fund alongside their health insurance.
Medical Fund - What is a medical fund and why is it important
Having health insurance is one way to be better prepared financially for medical emergencies. Nevertheless, it is not the same for everyone due to their respective current health conditions. Indeed, the premiums involved may be cumbersome to some while some costs are not covered and need to be accumulated substantially even when one is insured. Investing in health insurance is therefore not enough reason for relaxation. A medical fund fills this gap. This article aims to explore the idea of a medical fund and building a strong financial cushion that supports your health insurance strategy.
First and foremost, health insurance is non-negotiable. It protects your savings and investments by covering high medical costs during emergencies. The importance of health insurance cannot be overstated, especially in providing cashless claims and reducing out-of-pocket expenses during hospitalisations.
A medical fund is a specifically earmarked amount of money set aside for medical contingencies. It serves as a buffer when health insurance is insufficient or not available, and it ensures that your financial goals and emergency funds remain intact.
Health Insurance | Medical Fund |
---|---|
Renewed annually with fixed coverage amounts. | A fixed amount set aside that does not replenish automatically and must be managed and planned for individually. |
For younger individuals, health insurance might be sufficient for most medical emergencies. However, having a small medical fund can provide an extra layer of security for copays, deductibles, or unexpected medical expenses not covered by insurance.
As you near retirement age, medical expenses tend to increase. Health insurance premiums may rise, and there may be more health conditions to manage. A well-funded medical fund can provide peace of mind and reduce financial stress during retirement.
If you have a higher risk of health problems due to lifestyle, family history, or pre-existing conditions, a medical fund can be a valuable asset. It can cover costs that may not be included in your health insurance policy.
Some health insurance plans have limitations on coverage or high deductibles. In such cases, a medical fund can bridge the gap and ensure you're adequately covered for all medical needs.
In conclusion, while health insurance is a foundational part of your financial planning, a medical fund acts as a crucial backup. It ensures that you are prepared for unforeseen medical expenses and provides a safety net during emergencies. Whether you are young and just starting or preparing for retirement, having a medical fund is a prudent financial decision.
Remember, each individual's situation is unique. It's essential to evaluate your own circumstances and consult with a financial advisor if needed, to determine the best approach for managing your healthcare expenses.
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