Founder and chief executive officer of financial services company Zerodha, Nithin Kamath, has recently come out with a word of advice that will, according to him, help people go a long way in being financially prudent.
Pointing out that the costs of health incidents are alarmingly high, in a series of tweets, Kamath said, "Buying a health insurance plan for the family is the most important financial investment you can make, given the costs of serious health incidents."
Even before you do anything else in your personal finance journey, get health cover to the extent you can afford, he added.
In 2014, the last year for which data is available, the average cost of inpatient care per hospitalisation was Rs 26,475 in urban areas and Rs 16,676 in rural, he said. "Over 6.3 crore Indians are faced with poverty every year due to health costs alone; according to government estimates about 8-9% of all Indian households were pushed below the poverty line due to healthcare costs, as per this paper by economists from the National Institute of Public Finance and Policy based on NSO data."
Healthcare costs will continue to rise, he said, adding, "and the only way to deal with the impact is by creating awareness about the need for health insurance for all Indian households."
He also shared an article by Indiaspend to substantiate his observations. The article said the latest National Family Health Survey data revealed that only 41 per cent of Indian households have at least one member with health insurance.
About eight-nine per cent of all Indian households were pushed below the poverty line due to healthcare costs according to a paper by economists from the National Institute of Public Finance and Policy based on NSO data, reports Indiaspend. This includes data on hospitalisation costs only.