Is Early Investment in Health Insurance a Better Idea?
Published On Oct 22, 2019 5:30 AM By Prashant Srivastava
Medical inflation is increasing by 12-15% rates annually. Any uncertainty or medical emergency can deplete your savings. So buying health insurance is a wise step.
Health insurance can help you financially when you meet an accident or suffer from any kind of disease or illness depending on the plan you choose. It can prevent you from making a hole in your savings. The benefits will be doubled if you buy a policy at a young age. It can serve as the best investment.
Despite this fact, people in India purchase health insurance, not for health benefits, but for tax savings. They consider health insurance a tax-saving tool. Is this because they’re unaware of the health benefits of adequate health medical cover?
According to a survey conducted by Lombard on 1,400 young people in the age group of 25-35 years, only 75% of the people who participated in the survey said that they had bought personal health insurance. And 46% of them accepted that tax benefit was the only reason they bought the insurance.
This may be because a good percentage of people in India are not aware of health insurance benefits. They don’t understand that health insurance can be the best Investment Option at a young age. Here are some obvious reasons how buying health insurance at a young age can be the best investment option for you.
No Waiting Period
Waiting period means you cannot get claims for surgeries, special ailments, an existing disease for a certain period. If you invest in health insurance at a young age, the waiting period will not hurt you so much because you will be in better health condition and will not require such surgery.
The chances of getting major surgeries or treatment are lower when you are young. So, the waiting period element will not affect you.
Better Financial Planning:
Not only available at a lower premium, but taking health insurance early makes better financial sense too. Accidents can occur without any signal or warning. When you have a health plan, you’re covered for uncertainties and it can let you invest your hard-earned money in long term investments. Besides, you can save tax against the paid premiums.
Cover Beyond Hospitalization
These days, many insurance companies are providing health insurance policies that are designed to cover daily medical expenses, including the doctor’s consultations fee. In addition, the policies also cover maternity expenses and newborn baby cover without paying any additional premium.
Invest Early for the Best Price
Invest in health insurance at an early age for the best price. For instance, when you buy a plan with Rs. 5 Lakh coverage when you are around 25 years old, it would cost you around Rs. 5,000. If you buy the same plan with the same coverage at 35 of your age, it may cost you around Rs. 6,000, whereas buying the plan with the same coverage amount when you are 45 years old, you’ll have to shell out around Rs. 8,000. This means investing in health insurance at a young age is beneficial as it can cost you the lowest possible premium.
No Claim Bonus
Every insurance company offers ‘No Claim Bonus’ (NCB) to the insured if no claim is raised in a policy year. Purchasing a health insurance plan at an early age can let you have a cumulative bonus. This is possible because as a young policyholder, you would tend to renew the policy every year without a claim.
These accumulated bonuses will increase the total amount of your health insurance plan, which is a big achievement for you. As you grow, the insured amount will also grow in every claim-free year. One thing that you need to know that the range of NCB varies from 50% to 100%.
No doubt, health insurance providers give priority to youngsters. A young individual has an option to pick the best insurance plan from the available options. Purchasing insurance at a young age allows you to avail the benefits of lifetime policy renewal too.
Lower Rates of Claim Rejection
It’s difficult for an individual with a medical history to get health insurance. If you’re diagnosed with the life-threatening diseases like cancer, heart disease, etc., then the chances of the claim rejections by your insurer will be higher. Or, you have to pay a higher premium when purchasing a new policy.
In the case of a young person, the chances of claim rejection are very low by the insurance company as these people are less prone to suffer from critical illnesses.
It’s also important to note that insurance companies offer health insurance products to people of upper age with a restricted time period. If you purchase a policy in your early 30s, then you can be covered under the policy for a longer period of time and thus enjoy the benefits for a longer period.
common mistakes done by people when purchasing Health Insurance.
Is Health Insurance Only a Short Term Investment?
To conclude, when you invest in health insurance at a young age, you happen to avail several benefits. The benefits described in this article are some of the common ones you can enjoy by investing in health insurance early.