Vikrant Massey's Story: Can Wealth Replace Insurance? You May Still Need Coverage- Here's Why

In a recent podcast, the actor Vikrant Massey told the host that he tore his father’s insurance paper as he saw his mother waiting in queue for the claim. While your need for insurance might not be as high if you possess significant wealth, not taking insurance can still be a mistake. Insurance should remain a vital part of comprehensive financial planning. Possessing wealth does not make you immune to risks such as long-term health crises, natural disasters, legal liability, third-party claims, or property loss. Here, we will look at the importance of health insurance.

“Insurance acts as a protective buffer that shields your assets from these unpredictable events. It allows you to enjoy your wealth without constant concern over potential dangers of wealth erosion,” says Madhupam Krishna, Securities and Exchange Board of India (Sebi) registered investment advisor (RIA) and chief planner, WealthWisher Financial Planner and Advisors. This specifically applies to health insurance.

“Even a wealthy person would like to preserve his wealth. He would like to shift the risk to someone else by paying a small premium. Why would he like to keep the risk and always have a risk of losing a substantial portion of his money?” says Krishna.

Health Risks Don't Discriminate

Even for those with substantial financial reserves, securing medical coverage through insurance remains a prudent choice, according to experts. Medical emergencies are often sudden and can incur significant expenses, particularly for severe conditions or intricate treatments.

Insurance acts as a vital safeguard, covering a substantial portion of healthcare costs, including hospitalisations, surgeries, prescription medications, and specialist visits. It also grants access to a broader spectrum of medical services and high-quality care that might otherwise be financially out of reach. Many insurance policies really push for preventive health. They do this by covering screenings and regular check-ups. This way, health problems get caught early, which almost always leads to better health down the road. For individuals, having one of these policies means they can get the medical care they need without stressing over unexpected bills. It keeps their finances stable and gives them real peace of mind.

Why Pay From Your Pocket?

Just counting on your own money for emergencies can reveal big holes in your long-term financial plans. "People who think they can handle unexpected costs might seriously underestimate how disruptive or expensive certain health emergencies can be. This can leave them really unprepared for a bigger crisis. Even though paying yourself might offer immediate relief, it might not leave much room for ongoing or unexpected costs that add up over time," explains Krishna.

Choosing not to get insurance can actually shift risk from one part of your life to another.  For instance, you lack liability coverage; a car accident lawsuit could genuinely deplete all your assets. Similarly, opting out of health insurance might lead to enormous medical bills paid directly from your own funds, jeopardising your entire financial security. While having significant wealth can soften the blow of certain risks, it doesn't eliminate the possibility of financial difficulties—it merely alters their impact.

Insurance helps you manage and offset these risks by providing a safety net. It ensures that unexpected events don't wipe out a lifetime of savings or derail your financial goals.