My daughter was born with Scoliosis (curvature of the spine). Day by day her curve is growing more. She is now only 18 months old. I have a transferrable job in a private firm. Currently I am staying near Delhi. I tried to take Health Insurance for my daughter solely also tried to include her name in the existing policy (family floater) as well, but all the times it was rejected. As far I am concern, her operation is inevitable and it will need approximately 15 Lakhs in any private hospital. There is time for the operation. I need advice on this matter. Where to do treatment and how to get an Insurance.

Ans: I understand your concern for your daughter's health and financial planning. It's important to ensure you are well-prepared for her treatment and have a solid financial strategy in place. Let's explore the steps you can take.

Understanding Scoliosis Treatment and Costs
First, it’s essential to grasp the treatment process for scoliosis. Early detection and regular monitoring are crucial. Treatments vary based on the severity of the curve. For milder cases, braces might be recommended to prevent further curvature. However, in severe cases, surgery might be required. This surgery can be expensive, often costing around Rs 15 lakh in private hospitals.

Given that surgery is likely in the future, preparing financially is essential.

Navigating Health Insurance Challenges
Health insurance can be tricky, especially with pre-existing conditions like scoliosis. Insurers often reject such cases, but there are a few strategies you can try.

Explore Group Health Insurance Policies
Some employers offer group health insurance policies that may include family coverage. These policies often have less stringent rules regarding pre-existing conditions. Speak with your HR department to understand your options.

Look for Specialized Health Insurance Plans
Some insurers offer plans specifically designed for children with chronic illnesses or disabilities. While these might come at a higher premium, they can provide the necessary coverage for treatments and surgeries.

Consider Critical Illness Cover
Critical illness policies offer a lump sum payout upon diagnosis of certain illnesses. While scoliosis itself might not be covered, complications from surgery could be. This payout can be used to cover treatment costs.

Evaluate Insurance Riders
Adding riders to your existing policy can enhance coverage. Riders for critical illnesses or surgical benefits might offer additional financial protection.

Building a Financial Plan
Given the challenges with insurance, a robust financial plan is crucial. Here’s how you can build one:

Emergency Fund
Start by creating an emergency fund specifically for your daughter’s treatment. This fund should cover at least six months of expenses, ensuring you have immediate access to money if needed.

Systematic Investment Plans (SIPs)
SIPs in mutual funds can be an effective way to build a corpus over time. Regular investments, even small amounts, can grow significantly due to the power of compounding. Opt for a mix of large-cap, mid-cap, and small-cap funds to balance risk and returns.

Diversified Mutual Fund Portfolio
A diversified portfolio helps in spreading risk. Invest in different categories like equity, debt, and hybrid funds. Equity funds offer high returns but come with higher risk, while debt funds are safer but provide lower returns. Hybrid funds offer a balanced approach.

Child Plan Mutual Funds
Consider child-specific mutual funds that invest with a focus on future expenses like education and healthcare. These funds often come with lock-in periods that ensure disciplined savings.

Recurring Deposits and Fixed Deposits
For guaranteed returns with minimal risk, recurring deposits (RDs) and fixed deposits (FDs) are good options. They provide fixed interest rates and can be timed to mature when you anticipate the surgery expenses.

Understanding Mutual Funds
Mutual funds are a pool of money collected from many investors to invest in securities like stocks, bonds, and other assets. Here are some key points about mutual funds:

Advantages of Mutual Funds
Diversification: Spreads risk across various assets.
Professional Management: Managed by experienced fund managers.
Liquidity: Easy to buy and sell.
Systematic Investment: Allows for disciplined investing through SIPs.
Categories of Mutual Funds
Equity Funds: Invest primarily in stocks. High risk, high return.
Debt Funds: Invest in fixed-income securities. Lower risk, moderate return.
Hybrid Funds: Mix of equity and debt. Balanced risk and return.
Index Funds: Track a market index. Lower management fees but less flexibility.
Sector Funds: Invest in specific sectors. Higher risk due to lack of diversification.
Power of Compounding
Compounding allows your investments to grow exponentially over time. Reinvesting returns means earning returns on both the initial investment and the accumulated returns. Starting early maximizes this effect.

Financial Strategies and Adjustments
Given your situation, here are some additional strategies:

Review and Adjust Investments Regularly
Regularly review your investment portfolio. Adjust based on market conditions and your financial goals. Seek advice from a Certified Financial Planner to ensure your investments align with your objectives.

Utilize Tax Benefits
Investments in certain mutual funds, like Equity Linked Savings Schemes (ELSS), offer tax benefits under Section 80C of the Income Tax Act. This can help reduce your taxable income while building a corpus.

Avoid High-Cost Insurance Products
High-cost products like ULIPs (Unit Linked Insurance Plans) have high charges, reducing overall returns. Instead, focus on term insurance for adequate coverage and mutual funds for investment.

Plan for Long-Term Goals
In addition to your daughter's treatment, plan for other long-term goals like education and marriage. Allocate investments specifically for these purposes to ensure you meet all financial milestones.

Final Insights
Your daughter’s health is a priority, and planning financially is crucial. Exploring group health insurance, specialized plans, and critical illness cover can help manage the cost. Building a diversified investment portfolio with mutual funds, RDs, and FDs will ensure you have the funds when needed.

Investing in mutual funds through SIPs offers disciplined savings and the benefit of compounding. Regularly review and adjust your investments to stay aligned with your goals. Seek advice from a Certified Financial Planner for personalized guidance.

Remember, starting early and staying disciplined in your investments will help you achieve your financial goals. Best of luck with your planning, and I hope your daughter gets the best possible treatment and recovers swiftly.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in