Money Wise: You Don’t Know What You Got Till It’s Gone

When two elephants fight, it's the grass that suffers. This is an apt idiom to describe the fight between the Association of Healthcare Providers – India and health insurance provider, Bajaj Allianz. The association, having long-pending unresolved grievances with the insurer, announced that its network of over 15,000 hospitals would not be accepting cashless claims from customers of the insurer.

The latest here is that the issue may soon be resolved. But even the brief period of the ban is likely to have caused problems for many individuals. That's because unavailability of a cashless facility often creates myriad problems for a patient – especially in emergencies. Hospitals are known to demand a deposit at admission before beginning treatment and settlement can be a pain, with claimants having to jump through numerous hoops to receive what they have rightfully paid for.

I'm reminded of the Counting Crows song Big Yellow Taxi. "Don't it always seem to go… that you don't know what you got till it's gone?" For those that went through this, the loss of a crucial financial aid will have been problematic to say the very least.

For everyone else, it is a reminder that health insurance, preferably with a solid settlement history and access to cashless, is non-negotiable, especially with medical costs rising exponentially in the past few years. Most people I speak to depend on the group health insurance provided by their employers. This is not enough. Not when the incidence of life-threatening diseases is getting higher amongst the young. One expert I spoke to this week summed it up well – you always think of emergencies as something other people go through up until you're facing it yourself.

That's why financial advisors stress the importance of health insurance before you make your first investment. Alongside that, you should also construct an emergency fund at the earliest. A lot of young people complain that they can't possibly put together six months' worth of their expenses overnight. And they're right. This is not something that must be done anyway. It should be built towards, like everything else. What could also help is to identify what your family needs together – and all earning members can contribute to this fund. It's best to keep it liquid, but with savings account rates as low as they are, you may want to consider opting for short-term mutual funds or even arbitrage funds. Remember, though, that proceeds from arbitrage funds are only available a couple of days after you redeem.

In the interim, you could swipe a credit card for emergencies. But don't count your credit card limit as part of your emergency fund. It is simply an available credit line to make money that you already have available quickly.

There are a number of interesting stories that you can read on the website this week:

Govt Allows One-Time One-Way Switch From Unified Pension Scheme To NPS — Check Details

NPS Or UPS? How The Two Pension Schemes Differ And Which Is Right For You — Explained

India Mulls Expanding Pension Investments To Include Gold ETFs

Planning To Buy a Car This Festive Season? A Comparison Of Best Car Loan Interest Rates

Baby Gyms And Reading Classes: The Price of Early Learning

Until next week, happy reading!

Alex