Why is it important to buy maternity insurance? How to choose the right plan?

Why is it important to buy maternity insurance? How to choose the right plan? | Vrid

In this blog, we’re going to dive into a topic that’s close to the hearts of many Indian families – maternity-related healthcare expenses.

While the joy of welcoming a new member into the family is unparalleled, the financial burden it often carries can be overwhelming.

We’ll explore why the cost of maternity treatments has skyrocketed in India and why having maternity insurance is a crucial step in securing your family’s financial well-being.

Estimated read time: 3 minutes and 53 seconds

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Buckle up. Here we go!

Why has the maternity cost skyrocketed? 

Once upon a time, bringing a baby into the world in India was a relatively affordable affair. However, times have changed, and so has the cost of maternity care.

According to a health survey by the National Statistical Office in 2017-18, 9 out of 10 women delivered a child in a hospital.

Moreover, C-section deliveries have risen in the past decade. While 26% of deliveries in Government hospitals are by C-Sections, 56% of the births are in urban private hospitals.

The survey also stated that C-section deliveries cost about five times more than normal deliveries. And these numbers are old. Imagine the increased medical expenses now! Since COVID-19 started, the medical inflation rate has been growing at 13%. At one stage, the medical inflation was above 8%.

So, why exactly have these expenses gone through the roof?

The primary reason for the surge in maternity costs is the increasing trend of delivering babies in hospitals. While this is undoubtedly safer and more hygienic, it comes at a cost. Hospitalization expenses, including room charges, consultation fees, and medical tests, can add up quickly, leaving new parents with a hefty bill to foot.

The medical field has made remarkable advancements in recent years, which is undoubtedly a blessing. However, these advancements often come with a higher price tag. Modern facilities, state-of-the-art equipment, and specialized medical staff contribute to the escalating costs of maternity care.

Medical inflation in India has consistently outpaced general inflation. This means that medical expenses, including maternity-related costs, are increasing at a faster rate than the overall cost of living. As a result, what was once considered a reasonable expense has now become a financial challenge for many families.

The Importance of Maternity Insurance

Given the daunting reality of escalating maternity costs, having maternity insurance is no longer an option – it’s a necessity. Here’s why:

Maternity insurance provides you with financial security during one of life’s most significant milestones. It helps you cover the substantial expenses associated with pregnancy, childbirth, and postnatal care without depleting your savings or going into debt.

Pregnancy can be a time of stress and anxiety, especially for first-time parents. Maternity insurance offers peace of mind, allowing you to focus on the well-being of your family rather than worrying about mounting medical bills.

With maternity insurance, you have the flexibility to choose the best healthcare facilities and specialists for your pregnancy and childbirth. Financial constraints won’t restrict you when it comes to ensuring the best care for you and your baby.

Now that we’ve established the importance of maternity insurance, let’s discuss how to choose the right plan. First, if you have individual or corporate health insurance, check if it covers maternity expenses. 

Choosing the Right Maternity Insurance

If your existing health insurance plan doesn’t cover maternity expenses, you have two options. Buy standalone maternity insurance or add-on maternity coverage on your existing health insurance. Here’s what to consider before buying the maternity insurance:

Standalone Maternity Insurance

Standalone maternity insurance is a specialized policy designed exclusively to cover maternity-related expenses. Here are some key factors to consider when evaluating standalone maternity insurance:

Most maternity insurance policies have a waiting period (2 to 4 years), which means you need to wait for a specific duration before you can make a claim. Ensure you understand the waiting period and choose a policy that aligns with your family planning timeline.

Check the coverage limit of the policy. Ensure that it adequately covers all expected maternity expenses, including hospitalization, prenatal check-ups, delivery, and postnatal care.

Find out which hospitals and medical facilities are included in the insurer’s network. This can significantly impact the convenience and quality of care you receive during your pregnancy.

Add-On Maternity Coverage

Alternatively, you can opt for an add-on maternity coverage option on your existing health insurance policy. Here’s what to keep in mind:

Compare the cost of adding maternity coverage to your existing health insurance policy with the premium of a standalone maternity insurance plan. Sometimes, bundling maternity coverage with your health insurance can be a cost-effective option.

Ensure that the add-on maternity coverage provides comprehensive protection, including hospitalization expenses, prenatal and postnatal care, and complications during childbirth.

Just like standalone policies, add-on maternity coverage may also have waiting periods. Be aware of these waiting periods and plan accordingly.

In conclusion, the rising costs of maternity-related treatments in India make maternity insurance an essential investment for every family. It offers financial security, peace of mind, and access to quality care during one of life’s most significant journeys.

Whether you choose a standalone maternity insurance policy or opt for an add-on coverage on your existing health insurance, make an informed decision that aligns with your family’s needs and financial goals.

Check out the tax benefits you can get from health insurance here. 

Remember, preparing for the financial aspects of parenthood is just as important as preparing for the joyous arrival of your little one.

Share these insights with your buddies. Until next time!

Still Curious?

If you are like us, who likes to analyse a little more or check out content in different formats, well you are in luck. Below you can find some suitable content we found.

Economic Times – The case for increasing maternity insurance in India

Scripbox – Financial Planning for Maternity Leave

Aditya Birla Capital – How Much Does It Cost to Raise a Child in India

Note: We don’t have any affiliation with them. We are sharing links only for educational purposes. The opinions expressed by them belong solely to them and do not reflect the views of Vrid.

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DISCLAIMER: This newsletter is strictly educational and is not an investment advice or a proposal to buy or sell any assets. Please be careful and do your own research.

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