Financial freedom is to live the life style of your choice without dependent on an active income S. Lakshmi Narayanan 9945643550

In this series of articles, I recount my experience of guiding people to their financial freedom

Lack of health insurance of in laws costed my client several lakhs. Do not let it ruin your financial health.

“Papa, you and mom are in good health. Why do you have to pay the medical insurance premium? You discontinue the medical insurance policy. Let us see if you get ill” quipped Rajan, the son in law Since they were under his care, they discontinued their? medical insurance policy. Thereafter Rajan got in to a job and his office gave him health insurance. He covered his parents in law also in the group insurance scheme of the office. Immediately thereafter the mother-in-law developed severe back pain. She was diagnosed to have developed colon cancer and that was in stage 2. The doctors began treatment which cost several lakhs. Fortunately, the cost of the treatment was covered under the group insurance policy of the son in law.

But after some time, the son in law retired and died too soon after. With his death, the group insurance also expired. However, the mother-in-law developed relapse of the colon cancer. This necessitated treatment. At first, she was treated by a homeopathy doctor. When the treatment did not work, he advised that she be shown to an allopathic doctor. Allopathic doctor diagnosed that the mother-in-law had a relapse of the colon cancer and it was in stage 4. This necessitated beginning of treatment, which ended in the loss of several lakhs of rupees as also that of the mother-in-law.

Since there was no insurance at the time, this cost of treatment was completely borne by the first and second daughter, which set them back by a few lakhs.

There are several learnings from this episode.

1. Take your health insurance policy, as soon as you join your first job or start earning your first income.
2. Never discontinue a health insurance policy because you and your family seem to be perfectly health
3. You need to take the cost of medical treatment not of today, but when you become old.?
4. When you take the medical cost for the future also, you will at least need Rs.50 Lakhs to Rs. 1 crore. As a professional consultant, when I tell this to them, they express surprise. But when you take Rs. 20 Lakhs in your mid-twenties, not only do you pay a very small premium ( as small asRs.8,000) , it can multiply up to Rs. 80 Lakhs due to no claim bonus.?
5. You can also make do with lesser medical insurance premium than Rs. 20 lakhs, because there are top ups. So a good financial planner will be able to reduce your premium, while maintaining the coverage of Rs.1 Crore.
6. The lesson is here – take your medical insurance very early in life, maintain the same till you die. Do not discontinue as the premium increases, as age increases.?
7. Never ever depend only on your company’s medical insurance, as the insurance cover comes to an end on the day you quit the company, god save, or the company terminates your services.
8. More delay you do for medical insurance, more harm you do to your financial health, for a medical emergency can give a crippling blow to your financial life at any time of your life