Saturday, January 9, 2010

Insurance - Stop Gap Support - Not Investment

In recent days, it becomes the scary term for most of the people. Somehow public was forced to feel that they are more secured and without this, they are made to panic about that they are missing something important in their life. This is not only about medical insurance, it includes life insurance, property insurance, vehicle insurance, data security insurance, renter insurance, medical malpractice insurance, AD & D insurance too.

Certainly it cannot be generalized throughout the world. It is more in United States only. In nearby Canada their policy towards medical is different. In Europe, again it is different. In India, so many people never know the word “insurance”. Everyone is living well. By taking insurance, can you drive the death away? No.

I have seen people discussing about insurance, “I am having 3 insurance policies, how many you have? “ He will pity about guy who is having only 2 insurance. Actually who is supposed to be pity about?

Whole concept of insurance is collecting funds from group of people and distributes it among who needed it at the most. It is originated so many centuries ago in Rome for burying poor people. Individual burden will be distributed to all in the community. Modern day industrial revolution pushed so many philanthropic organizations to the hands of capitalist. Nonprofit organization took the new mask of financial tint.

In so many medical facilities, course of treatment was decided by the terms of insurance, not by need of health. Doctors are also paying for insurance, patients are also paying for insurance. Medical unit is also paying for insurance. Pathetically again these insurance, paying heavy premium for guarantees to meet their quick needs. I strongly felt, these cyclical process, increased the medical cost exorbitantly. For a heart valve replacement, in US it costs minimum 60K USD, but same procedure in India it costs only 4K USD, needless to elaborate the cause of huge difference. When you are promptly paying the premium, you are very nice to them. Automatically it will be deducted from your account. Moment you raise your hand for claim, you are gone. You will be bombarded with lot of question. Always they are finding some ways, not to pay the claim.

Life insurance helps when someone dies before they arrange financial security for their family. It will be a good support to their family to continue with the same life style. If we are securing half of our income for the future or for the future of our heirs, how we are going to live now. Insurance must be treated like a ad hock support not like an investment unit. People started to hedge funds in insurance firms for annuities, and then they will invest in bonds, mutual funds and stocks. Insured people are thinking, after their death, their families live better than now, this is completely wrong idea and setting false attitude for your dependants.

No human being can live without having any problem. Already if you have problem, I will not insure you. Even then I want to insure you, you have to pay hefty premium. Certainly they cannot afford to pay with their salary. To my knowledge some people are going to India for their treatment. Another interesting factor is so many people are having excellent life insurance, but no medical insurance, in either of the way insurance is going to pay, but what is the use?

Let us be very precise with our needs of insurance. We should not use insurance as an investment and insurance also should not be like a profit oriented business.

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