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Health insurance myths that are burning a hole in your wallet

. 4 min read . Written by Vanshika Goenka
Health insurance myths that are burning a hole in your wallet

Thu thu thu, touchwood touchwood, knock on wood, shubh shubh bolo. This is what we all hear when we bring up the topic of health insurance.

For many people, this blanket refusal to talk about health insurance is what leads to unnecessary and exorbitant medical expenditures in the long run. As of 2022, around 75% of Indians are paying medical bills out of their own pockets (Source: Team Acko). We have still not managed to put our superstitions around health insurance aside, and accept that today or tomorrow, our health could be at stake, and we will need to have a plan in place.
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Before embarking on your journey to picking the best health insurance plan, you should be aware of the prevailing myths around health insurance, and what the reality behind them is. Let’s take a look at a few of these myths.


  1. Health insurance myths
  2. I don’t need health insurance, I’m young and fit
  3. Health coverage starts from day 1
  4. Health insurance gives you a complete reimbursement
  5. Health insurance plans don’t cover mental health

Health insurance myths

  1. I don’t need health insurance, I’m young and fit

Sure, you go to the gym every evening and start your day with a protein shake, but that doesn’t mean that you don’t need health coverage. Not every health problem arises out of a poor physical state, you may need health insurance due to an unexpected genetic disease, or injuries from a car accident.

A report by the National Crime Records Bureau shows that 30% of 15–29 year olds in India suffered from road accident related injuries in 2012. Which goes to show, life is unpredictable. With no health insurance in place, both your body and your bank balance will take a hit.

Additionally, since premiums are calculated based on age, getting health insurance at a younger age proves cost-efficient in the long run.

2. Health coverage starts from day 1


That is the average out-of-pocket medical expenditure incurred by Indians (Source: Niti Ayog). Do you really want to wait for this or a higher bill to come in your mail before you get your hands on holistic health insurance?

Unfortunately, health insurance coverages don't start from day 1. Even the best health insurance plans come with a waiting period. The waiting period is the time span between when your insurance plan begins and the time when you can start availing of its benefits. For pre-existing diseases, this waiting period can be anywhere between 2–4 years. This means that the earlier you get your insurance covered, the better.

3. Health insurance gives you a complete reimbursement

We wish we lived in an ideal world where health insurance is all you need to protect yourself against medical expenses, but unfortunately, that’s not the case. Most health insurance plans come with a pre-specified percentage for reimbursements, as well as caps on specifics such as room charges. These restrictions depend on the kind of health insurance plan you have, and you will need to pay off the excess amounts from your own pocket. Therefore, while having health insurance is definitely a smart choice, it doesn’t mean you stop putting in money to your emergency fund.

4. Health insurance plans don’t cover mental health

If you think psychological disorders aren’t covered by health insurance then you’re living in 2016. Because the IRDAI made covering mental illness mandatory in 2017, as specified under the Mental Healthcare Act. This means that you can claim insurance for expenses incurred while treating psychological disorders the same way you can with physical disorders. This includes long-term expenses such as consultations, medication, and hospitalisation.

However, like every insurance clause, mental health coverage is also subject to certain terms and conditions, but being aware of this option can help you look in the right direction when choosing the best health insurance plan.

That should clear up all the most important misconceptions about health insurance plans in India. But health insurance can be confusing, so if you have more doubts or wish to learn how to pick the perfect health insurance for yourself, sign up for our course, Finance Pass: Personal finance made easy.

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