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How to create a healthcare corpus?

Ashutosh Gupta talks about the importance of health insurance

Due to rising healthcare costs, I want to create a healthcare fund for myself in about 15 years' time, in addition to medical insurance. How to create one and in what type of mutual funds one can invest?
- Suresh Singh Bisht

Having medical insurance of a sufficiently large amount at all times is of utmost importance and you should not look at creating a corpus to substitute the need for medical insurance. That's because even if you create a sizable corpus, it will not be possible to speedily replenish it if you end up drawing down upon it. In case of an eventuality, if you end up depleting this corpus significantly in a year due to some illness, you will not have much left for the next year and that is precisely the kind of contingency for which medical insurance is meant for. By paying a premium which is a fraction of your total sum of insurance, you get this coverage year after year.

Now how to go about investing for it, you have mentioned an investment horizon of 15 years, so the way to invest should not be different from any other long-term goal. Your investments should be predominantly in equity and you should invest through the SIP mode in a couple of good flexi-cap funds and keep investing through the ups and downs of the market. Now since this is not a non-negotiable goal, such as a child's education where you need a certain sum of money at a certain point of time and you cannot postpone it, you don't really have such pressing compulsions in such a goal. So I suggest that you can be a little more aggressive with this kind of investment and can look to add a little bit of mid cap and small cap allocation to your investments and keep investing. That should be good enough.

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