Time and tide wait for no man. This old saying proves to be true in case of health insurance. With the rising cost of medical and hospitalization expenses, having a health insurance policy has now become imperative. Nevertheless, many do not buy a health insurance plan until they reach a certain age. In this article, we discuss why buying a health insurance plan early on in life is actually a better financial decision.
Cheaper Premium Rates
Health insurance companies follow a simple philosophy – the younger the policyholder, the lesser the chances of him/her having major health issues. Therefore, they offer health plans with comprehensive coverage at lower premium rates. For instance, at the age of 25 and will general good health, a health plan with coverage of Rs 5
What makes more sense: paying Rs 6,000 - 7,500 or paying Rs 10,000+ throughout the premium paying term? It is advised to buy health plans as early as possible so that you can avail the best health insurance policies by paying low premiums.
If you look for a health insurance plan at a much older age, chances are your plan will have a co-payment feature. This means that when the policyholder is hospitalized, s/he has to pay a certain portion of the total claim amount and then the insurer will pay the remaining portion. For example, the co-payment clause in a plan is 80:20. Here, the policyholder will first pay 20% of the claim amount and then the remaining 80% will be paid by the insurer.
However, if you’ve signed up for a health plan early on in life, you will not be required to pay any co-payment portion.
Once you’re in your 40s, you may have pre-existing conditions like diabetes, heart problems, and others. So, when you subscribe to a health plan, you will have to serve a waiting period before getting covered for these pre-existing illnesses. However, when you’re buying a health plan early on in life, the chances of having a pre-existing condition are less, and therefore you need not serve any waiting period to be covered for these illnesses if you’re diagnosed with one after having bought the policy.
To conclude, a health insurance plan today is the need of the hour. Rising hospitalization expenses will not be something to worry about once you’ve availed a health insurance plan. All you can then focus on is to recover quickly.
Over and above the health cover that the policyholder will receive during hospitalization, s/he will also receive tax benefits. While the policyholder can avail a maximum of ₹25,000 under an individual health insurance policy, tax benefits under a family floater are shown in the following table.
Note: A family floater is a single sum insured plan that floats among all insured individuals, that is, self, spouse, and two children. There are also some products in the insurance market today that cover your dependent parents and parents-in-law, thereby acting as an umbrella to provide financial support to the entire family in the event of hospitalization.
|Self and Family||₹ 25,000|
|Self and Family + Parents||(₹ 25,000 + ₹ 25,000) = ₹ 50,000|
|Self and Family + Parents (senior citizens)||(₹ 25,000 + ₹ 30,000) = ₹ 55,000|
|Self (senior citizen) and Family + Parents (senior citizens)||(₹ 30,000 + ₹ 30,000) = ₹ 60,000|