New Delhi, Dec. 9 -- A few years ago, when Prasanna Singh, 52, a Delhi-based entrepreneur, went to get new dentures made for his father, he was taken aback to learn that it would cost lakhs of rupees.

"Dental costs are crazy," said Singh, adding that they are often not covered in typical health insurance plans.

He then decided to start a separate Systematic Investment Plan (SIP), specifically to save for dental costs. He invests Rs.6,000 a month in an index fund, hoping to build a corpus which will come in handy when the next such bill comes around. "I am going to forget about this money," said Singh.

While Singh is focused mainly on dental costs, financial advisors say there is merit to setting aside money for such unexpected large ex...