Why should you get health insurance when young?

Why is it important to have health insurance?

It is important to have health insurance to protect your savings and investments against unforeseen medical expenses.

Medical expenses in India have been rising year-on-year, which far exceeds the amount of regular salary increments or general inflation.

Having a comprehensive health insurance plan and maintaining a healthy lifestyle are ways in which we can counter this problem.

What are the benefits of buying health insurance at a young age?

1. Lower cost

You should get health insurance at a young age because it is available at a lower cost as premiums are calculated based on the age of the insured person.

2. Higher coverage

As the cost is lower, and the chances of you being healthy are greater, you will be able to get a higher coverage or sum insured for a comparatively lesser amount of money.

3. Less likely to have pre-existing conditions

When you are young, you are less likely to have lifestyle related diseases, and your insurance application will get approved easily. Any waiting period for pre-existing conditions will pass before you need any hospitalisation.

As you get older, you may develop lifestyle related illnesses like high blood pressure and diabetes. These diseases will affect your overall health and increase your medical expenses.

If you have already purchased health insurance before you develop these lifestyle related illnesses, their treatment will already be covered. If you purchase health insurance after acquiring these illnesses, there might be a waiting period of up to 4 years for them to be covered by insurance.

4. Tax benefits and tax deductions

Your expenses on health insurance premiums up to ₹ 25,000/- can be claimed as a deduction while filing your tax returns. An additional ₹ 25,000/- can be claimed while buying insurance for your parents. This limit is up to ₹ 50,000/- for senior citizen parents.

5. Not being reliant on employer for health insurance

Nowadays, employees switch jobs every 2-3 years or sometimes even earlier. Some may choose to become freelancers or try their hand at entrepreneurship. In such situations it is important to have your own individual health insurance, especially when there is a likelihood of a break in coverage due to a job change or change in employment status. Moreover, group health insurance by employers may not provide sufficient coverage in terms of sum insured as a comprehensive plan.

6. Can buy a comprehensive plan

If you buy health insurance while young, you can buy a comprehensive health plan, which may not have many restrictions or exclusions of coverage. As you get older and develop various lifestyle related illnesses, the chance of them being excluded from coverage is higher, and it defeats the purpose of having an insurance plan.

7. Bonuses

Most insurers have many benefits like no-claim bonuses where the coverage goes up for every year that there are no claims. There are also free medical check-ups included as part of the benefits of some plans that help prevent or detect illness early so that they can be cured easily.

8. Accident coverage

Accidents can strike at any time, irrespective of age. Accidents are covered from day 1 in all health insurance plans. Unforeseen events like these can wreak havoc on your financial well being and derail your savings and investments if you do not have a health cover.

9. Peace of mind

Disaster can strike at any time. Having a good health insurance cover will mitigate the risk of financial difficulties and prevent you from needing to dip into your savings or long-term investments to fund medical expenses of you or your family. You can then focus on getting healthier rather than worry about how to pay hospital bills.

10. Family protection

As health insurance comes with tax benefits in the form of deductions, it makes sense to buy cover for your entire family.

11. Securing your financial future

You can keep renewing your health insurance cover till the end of your life. The cover you buy now will help you even in your old age, when medical expenses increase because of inflation and lifestyle or age related conditions. There have been countless instances where people have renewed their plans throughout their lives, not using them even once, except for during their last few years of life, which has more than made up for the cost of all of the premiums that they have paid over the years.

12. Protecting your hard earned assets

Over the course of your life, you will earn, save and invest money so that you can live a happy and independent life. However, healthcare costs in their current avatar can derail your progress and can even bankrupt you.

If you visit crowdfunding websites in India, you will see that a majority of the reasons for which common people seek funding are related to healthcare and ballooning medical costs.

Conclusion

Don’t let yourself fall into dire straits, buy a health insurance plan as soon as possible.

It is significantly cheaper when you are young. You should not rely on group insurance cover provided by your employer as that will not protect you while in between jobs or if you choose to pursue entrepreneurship. This small investment of premium every year will give you peace of mind and secure your financial future.