Top 7 Benefits of Health Insurance You Need To Know About

Top 7 Benefits of Health Insurance You Need To Know About 

A couple of years ago, health insurance was largely considered an elite privilege. But that was long before its significance permeated our collective conscience.  

Health insurance has witnessed a tremendous surge in demand to become one of the most sought-after insurance products. Recent statistics by Straits Research indicate that the global health insurance market size was valued at USD 2.255 trillion in 2021 and is expected to hit USD 5.275 trillion by 2030, representing a compound annual growth rate (CAGR) of 9.9% between the forecast periods.  

These statistics are indicative of a steady appreciation of the importance of health insurance. This article looks at the seven benefits of obtaining health insurance coverage you probably didn’t know about. 

1. Managing Hospitalization Cost

This is arguably the strongest benefit of having a health  policy.  

Health insurance can come in handy in managing the often-inhibitive hospitalization cost resulting from an illness or injury.  

In the case of sickness, health insurance typically pays for the cost of diagnostic tests, room charges, and doctor’s fees. Some policies may also cover the costs of surgical operations and intensive care units (ICU).  

As for accidents, health insurance may cover the costs associated with getting emergency treatment.  

Some accident-related expenses your insurance policy may pay for include diagnostic tests, doctor and/or surgeon fees, room charges, and ICU costs. 

2. Managing Pre- and Post-Hospitalization Expenses

Health insurance isn’t only useful during hospitalized care. The policy may also help to manage pre- and post-hospitalization costs.  

Pre-hospitalization expenses are costs incurred before actual treatment commences. Examples include regular diagnostic tests conducted during the wave of a pandemic and screening tests performed on expecting moms.  

On the other hand, post-hospitalization expenses are costs incurred after getting treated and discharged from a hospital. Healthcare providers often need to do follow-ups to establish that their patients are on the path to full recovery. They may make routine calls to ensure a patient is taking their meds or conduct further diagnostic tests to monitor the possible reoccurrence of a disease.  

Without a health Insurance Holder policy, pre- and post-hospitalization expenses can be a massive blow to your finances. That’s especially true if the care program lasts for weeks or months. 

3. Health Insurance Protects Your Savings

Wealth creation takes time. Many people struggle to build a solid savings account, let alone spare enough money to fund an investment.  

But without a health insurance plan in place, you’re only an illness or an accident away from poverty. A single medical emergency can quickly drain your finances, leading to a roller-coaster of mental anguish.  

On the one hand, you’ll be happy that your savings have granted you a second chance at life. Yet, on the other hand, the thought of an empty bank account may take a heavy toll on your mental health.  

Some savvy investors prefer to set up an emergency fund to handle unforeseen expenses like medical costs. However, health insurance provides the surest way to protect your savings from inhibitive medical expenses.  

4. Addressing Medical Inflation

Inflation is a term commonly used within economic and financial circles. But unknown to many people, it also applies to the healthcare industry.  

According to Business Insider, $1 in 1900 had a purchasing power of around $33 in 2023 after adjusting for inflation. The implication is that a piece of medical equipment that cost $1,000 in 1900 would cost $33,000 today.  

What makes medical inflation interesting is that it doesn’t only apply to tangible healthcare equipment. It also extends to services like diagnostics, consultation, and surgery.  

Fortunately, health insurance is immune to dramatic surges in inflation.  

Some insurers may adjust their premiums upwards to reflect the prevailing economic situation. However, the increase is usually marginal compared to the difference that high inflation would have on out-of-pocket medical expenses. 

5. Health Insurance Safeguards Your Family 

Health insurance doesn’t only benefit you personally. It also benefits your close family members.  

Indeed, millions of health insurance policyholders never benefited directly from their coverage. That’s the whole idea of insurance anyway – safeguarding against a risk you hope never occurs.  

However, many policyholders have had their health insurance policy benefit their dependents. In this way, the coverage helps minimize the cost of medical treatment at a household level.  

Nearly all health insurance policies cover the policyholder’s spouse and children. Some also extend coverage to the holder’s parents.  

Experts recommend seeking out a plan that offers all-around coverage. Be especially cautious when looking for a policy that covers your aging parents. 

6. Reducing the Burden on Everyone Else

We’ve all been there – someone in the family has been taken ill, and suddenly, everyone is invited to a WhatsApp Group to contribute towards their treatment. 

It’s fulfilling to extend a helping hand, especially to an ailing kin or friend. But picture the kind of strain this would put on your family if you were the one seeking medical treatment without health insurance.  

The prospect is gloomier if you’re still a young family and also happen to be the sole breadwinner. How would your stay-at-home spouse or ten-year-old daughter mobilize the funds required for, say, chemotherapy treatments?  

The only way to mitigate any financial burden associated with contributing towards your medical treatment is by taking health insurance.  

7. Offering Other Direct Financial Benefits

It’s intuitive to look at health insurance primarily from the perspective of covering unforeseen medical treatments. However, the policy also offers immediate financial benefits through tax rebates.  

A tax rebate, or a tax refund, is a payment the Internal Revenue Service (IRS) makes to a taxpayer due to the said individual having paid more than they owe the tax agency.  

Another direct financial benefit of having health insurance is “No Claim Bonuses.”  

A No Claim Bonus (NCB) is an amount discounted from the overall cost of insurance premiums. The discount is typically based on the duration the insured has held onto their policy.  

As a policyholder, you can qualify for an NCB of up to 100% of your policy’s original sum. This allows you to renew the coverage without incurring additional costs. 

Summary 

 Having health insurance is not only a proactive way to cushion yourself from unforeseen medical expenses. It also offers a slew of other immediate and long-term financial benefits.  

The challenge usually lies in finding a reputable insurer. Start by defining your budget and ultimate goals before shopping for the best health insurance company.