Why Should You Buy Health Insurance at an Early Age?

Introduction

‘I am young. I am in good health. Why should I buy health insurance?’ – A common and relevant question among the Indian youth.

65% of India’s population is below the age of 35. Unawareness or hesitance to buy health insurance is a recurring theme in this demographic, especially since many employers offer health benefits.

But does your corporate health plan offer sufficient coverage? What happens when you leave your job? While employer-provided health insurance is helpful, it’s important to consider its limitations. 

Purchasing health insurance at an early age is a wise financial decision that safeguards you from unexpected medical bills, irrespective of your employment status.

What is health insurance, and why is it important?

Health insurance is a financial safety net that helps you cover medical expenses. It’s a contract between you and an insurance company. Here’s how it works:

• You pay a premium: This is a regular payment to the insurance company.
• The insurance company covers costs: If you get sick or injured and need medical care, the insurance company pays for some or all of the bills, depending on your plan.

You can make two types of claims with your health coverage:

• Cashless: You get your treatment at a network hospital, and the insurer settles the expenses with them directly. 
• Reimbursement: You settle the medical expenses on your own and submit a reimbursement request to the insurer.

Long working hours, unhealthy eating habits, pollution, and stress are becoming major health concerns across ages. According to a report, India has one of Asia’s highest medical inflation rates.

Purchasing health insurance early can help you cope with these challenges.

Why should you buy health insurance at an early age?

Starting out in your career, health insurance may seem like a distant concern. But there are several advantages of buying early than waiting until you are in your 40s or 50s. Let’s explore:

Lower premiums

At the age of 25, health insurance with Rs.5 lakh coverage would cost you between Rs.5000 and Rs.7000 yearly. The same plan will cost you between Rs.6000 and Rs.9000 at the age of 35. At the age of 45, the premium can be around Rs. 7,200 to Rs.10,800.

You can use any online health insurance premium calculator to compare these prices.

Waiting period

Most health plans come with a waiting period of 30 days to four years, depending on the illness and pre-existing conditions. By getting a plan early, you can easily overcome this waiting period while you’re typically healthy, ensuring coverage is readily available when you might need it most.

Easier to buy insurance

Young adults generally don’t need medical tests to purchase health insurance, making the application process quicker and easier.

However, for individuals who are over 45 years old or those with pre-existing medical conditions, medical tests become mandatory. These tests can sometimes identify previously unknown health concerns, which could lead to higher premiums.

Comprehensive health cover

Purchasing health insurance early provides comprehensive coverage from prevention to treatment. Young and healthy individuals are more likely to be approved for plans with broader benefits.

These plans may cover preventive care, hospitalisation, specialist visits, and other important services. Starting early, you can lock in these comprehensive benefits at a lower cost.

Better financial planning

Insurance companies consider young people to be low risk and thus offer them a low premium. Use this to your benefit and aim for a better coverage amount.

It can protect you from future expenses and provide you with much needed financial stability in your time of need.

Bonuses

A no-claim bonus is a popular reward offered by insurance companies. It can be a cumulative bonus or discount on premiums.

For example, with a cumulative bonus for every claim-free year, your coverage amount will increase by a percentage, but the premium remains the same. You can also get a discount on your premium amount, but the coverage remains the same.

Prevention against sedentary lifestyles

Frantically working while staring at screens for hours and not moving enough can lead to issues like high blood pressure, diabetes, and obesity.

Health insurance can protect you with its lifestyle diseases coverage. With services like annual checkups, you can catch issues early on and prevent them from developing into serious ailments.

Tax benefits

If you invest in health insurance, you can claim a tax deduction of up to Rs.25,000 for yourself, under Section 80D of the Income Tax Act, 1961. By buying health insurance at an early age, you can enjoy these tax benefits for longer.

Key Takeaways

Health insurance can protect you from emergency medical expenses and rising treatment costs. Buying health coverage early, even if you have corporate benefits, can offer you lower premiums, better coverage, and tax deductions. 

Health insurance is an investment in your well-being. It ensures you can prioritise your health without worrying about financial burdens.

Compare plans by different providers and choose one that meets your health insurance needs.

Streamline the process of purchasing and managing your health insurance policy with platforms like PhonePe, ensuring peace of mind for you and your family.