Personal finance conversations often start with the usual favourites—equities, SIPs, gold, and real estate. But in the race to grow wealth, an equally critical pillar quietly slips through the cracks: health insurance.
We meticulously plan for market fluctuations but hesitate when it comes to preparing for health-related uncertainties. Yet, a single medical emergency can undo years of disciplined investing. That’s why health insurance isn’t just another option; it’s a strategic necessity.
A quiet but powerful shift is unfolding in how Indians view health insurance. After the GST reduction in September 2025, the demand for comprehensive policies jumped by 38%, revealing a significant change in mindset.
Consumers who once settled for basic coverage are now choosing plans that genuinely reflect the rising cost of medical care. Average cover amounts have increased from Rs 13 lakh to Rs 18 lakh, and nearly 45% now opt for Rs 15–25 lakh cover—a level of awareness that was rarely seen before.
This isn’t just about policy upgrades. It underlines a broader realisation that financial protection is not about fulfilling a formality, it is about safeguarding long-term stability.
Healthcare today stretches far beyond hospitalisation. Outpatient care has evolved into a major expense category, especially in urban households. Rising rates of lifestyle-linked diseases among young and middle-aged individuals have led to frequent doctor visits, preventive screenings, and ongoing diagnostic requirements.
Much of the spending occurs outside hospitals, in the form of consultations, tests and chronic care follow-ups. Insurance plans that include OPD coverage, preventive care and diagnostic benefits are increasingly valuable because they help offset these recurring expenses that quietly drain household budgets.
For families supporting school-aged children or caring for ageing parents, this becomes even more significant. Elderly care, with its continuous need for medications, check-ups, and monitoring, remains one of the most demanding financial responsibilities.
Without structured health insurance, these costs often fall directly on personal savings, forcing individuals to dip into emergency funds, redeem investments prematurely or postpone long-term goals.
Getting sufficient coverage early in life ensures that both routine and critical health needs are managed without disrupting long-term financial plans. It also ensures uninterrupted protection as health conditions evolve.
Government initiatives, too, have reshaped the landscape of health security. The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY) continues to expand its network and reach millions of low-income households, offering critical hospitalisation coverage. While this provides an essential safety net, a large proportion of middle-income Indians remain outside the eligibility criteria.
For these individuals, private health insurance is not optional; it is a necessary layer of financial protection that complements government support and fills coverage gaps.
A compelling argument for early adoption of health insurance is the cost advantage. Premiums are typically more affordable for younger buyers, who also enjoy shorter waiting periods and fewer exclusions. Starting early builds a continuity of coverage that proves invaluable with age.
Beyond financial benefits, there is a deeper psychological advantage—the peace of mind that comes from knowing that medical needs—both routine and unexpected are manageable. This security encourages individuals to make bold career decisions, pursue entrepreneurial ambitions, or relocate without fearing that a medical emergency will jeopardise everything.
Yet many still treat health insurance as something to buy later in life, often reacting only after symptoms appear or a diagnosis forces the decision. At that stage, premiums are higher and the coverage more restrictive. Insurance works best not when it becomes urgent but when it is planned well before it becomes necessary.
Modern health insurance has evolved remarkably. Today’s plans offer preventive screenings, mental wellness support, teleconsultations, home healthcare, OPD benefits and diagnostic allowances, reflecting a shift from reactive treatment to proactive health management. This transformation encourages individuals to prioritise early interventions, maintain healthier routines and address issues before they escalate into major medical or financial setbacks.
As financial awareness increases across India, people are embracing diversification, long-term investing and goal-based planning. But all these strategies rest on a stable foundation, and that foundation is health security. With healthcare costs steadily rising, ignoring health insurance can derail years of disciplined saving and investment.
Health insurance may not generate returns like market products, but it offers something far more fundamental: financial continuity. It preserves long-term investments, protects future goals and shields families from the shock of unforeseen medical expenses.
That is why, in any robust personal finance plan, health insurance should not be the final checkbox—it should be the very first investment.
(This article has been authored by Gaurav Dubey, Founder and CEO, Livlong 365. Views expressed are personal.)