Team AckoJan 18, 2022
Our parents often keep telling us about the importance of saving money and creating a backup in case of emergencies. They ask us to spend money on insurance like health insurance or even life insurance, fixed deposits or mutual funds for that matter. However, at a young age, these things hardly matter.
Saving for a pension fund in the early twenties seems unnecessary. Similarly, investing in health insurance to safeguard the finances feels like a bad idea. But in this article, we are discussing exactly why buying health insurance early in life is the best thing ever!
When a person is younger, the chances of having a medical condition are lesser as compared to a person in later stages of life. If health insurance policy is bought before the age of 30 years, the sum assured of 5 lakh rupees can approximately be bought at just Rs. 5000. This cost increases with increasing age e.g. the same cover might cost Rs 6000 to 8000 in the 40’s. Health insurance companies will offer an insurance plan at a lower price if the risk you face is lower, this is true when a person is young.
A health insurance policy covers multiple ailments such as diabetes, kidney failure, cancer, heart diseases and many more. In most cases, these conditions start affecting people after the age of 35 years. When you buy a health insurance policy earlier in life, you are virtually safe from contracting a life-threatening disease. The financial risk associated with your health is less when you are younger.
Planning your finances earlier in life will prove to be beneficial in the long run. If you buy health insurance benefits later in life or on the onset of a disease, your finances will go haywire. Instead, it is a good idea to secure your finances related to medical emergency well in advance. This way you are already prepared for emergencies irrespective of their magnitude.
Many health insurance plans have a waiting period on a number of conditions before it can be covered under insurance. Some of these include maternity benefits, certain pre-existing conditions, and/or diseases. The waiting period can range from a few months to even years. One cannot make a claim even if a medical emergency arises during the waiting period. When a health insurance policy is bought at a young age, one can easily pass the waiting period without worrying about the medical emergency.
Insurance companies reserve the right to reject an application. Usually, this happens if the risk for covering an individual is higher, that is when the age of the policyholder is more. Thus, the chances of your application, for health insurance benefits, getting rejected is less when you buy the policy at a young age.
You can avail more coverage for a lower cost when you are young. A health insurance policy not only covers hospitalization but also day-care procedures, pre- and post-hospitalization, OPD expenses, etc. The cost of availing these coverages will be more if you don’t have a health insurance cover at a later stage in life.
When you buy a health insurance plan in your 40’s, chances are that you might already be suffering from some kind of ailment. As mentioned earlier, insurers often put a waiting period for pre-existing conditions. When you buy a policy at a younger age, you might not suffer from any such condition and if in future a disease hits, it can be treated with the help of your policy without waiting.
The Insurance Regulatory and Development Authority of India (IRDAI) had stipulated that a health insurance policy can always be renewed. Still, the maximum age for renewing a health insurance policy is usually 65 to 70 years. But if you buy a policy early in life, you can avail the lifetime renewability option.
There are many types of health insurance policies available in India, for example, individual health insurance, family floater plans, senior citizen plans, etc. When you are younger and have limited liabilities, you can opt for individual health insurance and then upgrade to a family floater plan in the future. You can also buy riders i.e. additional coverages that can further enhance the scope of your policy.
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Category: Non-Life Insurance
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