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POSTED BY ON March 15, 2011 10:51 am COMMENTS (2)
What is optimum amount of health insurance for a couple in their 50s? Rather than opting for health insurance product, I am looking for setting aside a decent amount dedicated for their health related needs, kept in bank FDs / liquid funds / short term bond funds. How much amount will be adequate considering they do not have any health issues at the moment & have high networth running in few crores to be able to set aside tidy sum dedicated for their health needs?
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If they have high networth running to few crores it should not be an issue dedicating an amount to health purposes. Given that major surgeries run into few lacs these days, and given their profile they might go to large private hospitals only, I think 10-20 lacs is a decent sum to set aside. Given their worth I am assuming it wont be too hard to bring in more if there is a need for higher health related payouts.
But, why not health insurance too? It should be easy enough for them to afford even for high sum assured policies. This way, any payouts would not go from their own corpus.
G S,
Thanks for your response. I am having figure of roughly 20 lacs in mind which they can easily set aside.
Nothing wrong in health insurance as such. However, health insurance premium will be high as they are in their 50s and if they have claim in any year, premium for next year will go up. Also, entire process of claiming insurance money is not straight forward and they could face issues like claim rejection or lesser payout than actual cost incurred.
Therefore, given their profile, if it is possible to avoid getting into insurance related hasseles why not? After all, insurance business is not charity and insurance companies will make good profits in aggregate. Therefore, it is up to customer to decide whether they really need these products rather than blindly following some maxims made popular by marketing departments of such companies.
I am not a financial planner. However, having asked me and since they do not have health cover, I suggested to get rid of any requirement of health insurance by setting aside a sum dedicated for that need, just to make life simple.
Please share your views on above as it will enhance knowledge of every one.