We should buy a health insurance policy for ourselves and our family because medical care is very expensive, especially in the private sector. Hospitalization can burn a hole in our pocket and derail our finances. The purpose of health insurance is to transfer the risk of financial loss one cannot individually afford which may be caused by illness, injury or disability. It covers all medical treatment expenses (up to the sum assured) in the case of hospitalization due to an illness / accident and provides people with a much needed financial backup at times of medical emergencies. The man is mortal and does not know about the future events of life. He does not know what lies in the next moment so one should be prepared for any eventuality. It may come in the form of sickness or accident and if one has already planned to meet all these unexpected times, one does not have to worry about the financial burden. Health insurance provides people with a much needed financial backup at times of medical emergencies. According to various reports, India still continues to have the lowest health insurance penetration in the world. Payments made towards health insurance premiums are also eligible for tax deductions under section 80D.