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Sunday, July 25, 2021

Why is health insurance important even at a young age?

If you are young and earning, there's a fringe benefit of buying a health insurance plan as well.

Written by Sunil Dhawan |
November 26, 2020 4:18:11 pm
It has been an established fact that the right time to buy a health insurance plan is when one is in the pink of health, and body vitals and organs are in the best shape.

Binge-watching their favourite shows or going to the gym and doing all that it takes to be fit – that’s the mantra being followed by most youngsters. That’s a nice approach towards remaining entertained, updated and healthy, but may be just not enough! Being aware of risks also need to be part of their daily life, especially when it comes to matters related to money.

Irrespective of age and income, health exigencies may arise anytime and with anyone. On top of that, the stress related to work-life balance and lifestyle changes are having a toll on the health of most of us. The advancement in medical facilities is an on-going process but at the same time, newer diseases, such as COVID-19, are also on the rise. Amidst all that, one thing certainly looks impending – the rising cost of hospitalisation.

Therefore, the most optimal solution to the rising hospitalisation cost is to buy a health insurance plan and ensure the peace of mind. By paying a fraction of the health insurance coverage (called sum insured) as premium, one ensures that the insurer pays the hospital bills on behalf of the policyholder.

But then, a common perception is – “I am young and healthy, so why should I buy a health insurance plan?” Let us see why youngsters should realize the importance of buying a health insurance plan early in life.

Building a good claim history

It has been an established fact that the right time to buy a health insurance plan is when one is in the pink of health, and body vitals and organs are in the best shape. If you are young and healthy, not only is the premium lower, the probability of incurring a claim is also low. This is a blessing in disguise as it helps in building a good claim history with the insurer.

Earning Bonus

While there is no claim in any year, one gets the benefit of no-claim bonus (NCB). As a policyholder, for every claim-free year, one gets an additional coverage at no extra cost! Over time, the amount of coverage keeps increasing. It’s the benefit of staying not only healthy but also running the policy consistently with the insurer.

Pre-existing coverage

The biggest advantage of buying a health insurance plan early-on at a young age is taking care of the waiting periods related to any pre-existing ailments. But, what are the waiting periods? In health insurance plans, there are certain waiting periods before certain or all existing diseases of the policyholder are covered. While certain ailments are covered after 12 or 24 months, the pre-existing diseases get covered mostly after 48 months. The benefit of buying a policy earlier is that pre-existing ailments automatically get covered as one ages.

Accidental coverage

As is commonly known, accidents are accidental and can occur anytime with anyone. Irrespective of age, one could have an unfortunate incident and find oneself hospitalised. Having a health insurance plan helps save on hospitalisation costs as accidents are covered from the first day of the policy.

Tax advantage

If you are young and earning, there’s a fringe benefit of buying a health insurance plan as well. The premium paid towards health insurance qualifies for tax benefits under the Income Tax Act, 1961 up to Rs 25,000. And, if the parents are dependent on their children, the tax benefit can go up to Rs 50,000 for the premium paid towards a health insurance plan purchased in the name of parents. Many employees are covered under a group health insurance plan provided by their employer, but remember, the coverage exists only during employment and not thereafter.

Keeps life goals on track

One of the other major benefits of buying a health insurance plan early is to ensure one’s financial goals remain on track. In the absence of a health insurance plan, one will have to redeem the existing investments to meet the hospitalisation cost. Most financial planners, therefore, suggest buying a health insurance plan even before starting to save for the long-term goals.

End Note

Importantly, a health insurance plan is not just for oneself but for the entire family. If you are young, married, there are Family Floater health insurance plans that fit the bill. Remember, buying health insurance is the first step you would be taking at a young age to get prepared against uncertain health risks. Work on your body, but at the same time purchase a health cover to get the peace of mind!

This article was originally posted here

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