Personal Finance: Understanding the importance of buying health insurance at a young age 

Young age seems to be an exciting, happy and fit phase of one’s life. Like most young adults, you're probably just starting your career and there are many things that you aspire to achieve but there may be an education loan that needs to be eventually written off. Hence, this is a phase that requires great financial planning. It is one of the significant aspects of our future planning and this includes a carefully devised plan to take care of possible medical expenses in the future. Hence, it is crucial to understand the importance of planning your finances for the future and why you must include health insurance in it.

Health insurance should no longer be considered as an option but a necessity in the current times as medical emergencies can arise anytime. Also, healthcare costs have gone up over the past few years and any health emergency can take a toll on one’s long-term financial goals. The recent pandemic has brought to fore unforeseen health concerns and has made it imperative for individuals to have adequate health insurance cover in the first place, irrespective of one’s age. Therefore, before you turn a little older, opting for a comprehensive health plan should be the foremost priority to secure your health and finances in the future.

Let us look at some factors that will help youngsters to understand the significance of including health insurance in their finance portfolio as an essential measure to wave off the stress stemming from rising healthcare costs.

Health risks: Lifestyle diseases are on the rise, and the subsequent treatment cost of these diseases is unmanageably expensive. A comprehensive health insurance policy covers numerous ailments such as diabetes, cardiovascular ailments, kidney failure, and more. To pay for this unforeseen emergency, we must have health insurance, lest it affects our prolonged savings. When you buy a health insurance policy early in life, it enables the insured to afford necessary medical treatment. 

Tax exemption: When you are young and have a source of income, it is beneficial for you to buy a health insurance plan. If you pay a premium, you will get tax exemption up to Rs 25,000 on the premiums bought on health policies covering yourself, your spouse and children under section 80D of the Income Tax Act. If your parents are dependent on you the tax benefit can rise to Rs 50,000 on the health insurance plan bought in the name of your parents.

No-claim bonus: You can get the advantage of a no-claim bonus when there are zero claims in a given year. If there is no claim in any year, one gets the benefit of a no-claim bonus (NCB). Usually, you can get additional coverage for every claim-free year without any extra cost. With time, the insured amount for coverage increases, and you get the benefit of having higher sum insured health cover consistently without stress alongside staying healthy. 

Waiting period: The advantage of buying a policy at a young age is that most of the existing diseases fall automatically under the insured sum as you grow older. Many health insurance plans have a waiting period on several pre-existing ailments before they can be covered under insurance. The waiting period can range from a month to four years. When a health insurance policy is bought at a young age, one can easily pass the waiting period without worrying about a medical emergency.

Wellness benefits: Diagnosis is the precursor to seeking treatment and it involves lots of tests that cost money. Paying for yearly health check-ups may hurt your savings and investment plans. Replace this with a health insurance plan that only requires you to pay moderate premiums and takes care of your entire medical annual check-up budget. Some insurers also provide a complimentary wellness programme, where the insured can earn points for participating in these programs that enable them to stay healthy and also reduce their health insurance premiums.

With the rising cost of medical care and rapidly changing lifestyles, planning your finances for the future is a must towards ensuring a healthy and secure future. Hence, opting for a comprehensive and adaptable health insurance plan is an investment for the youth in the current and foreseeable future to take care of the medical expenses. What’s more, buying a health insurance policy at an early stage means more cover at low premium charges along with better chances of navigating the waiting period seamlessly.

Always remember a little planning can go a long way in weathering a health emergency successfully. So, make sure to include health insurance in your financial portfolio and ensure timely premium payments and renewals to ensure its continuity. Having a comprehensive health insurance plan not only gives you access to quality health care but also keeps your savings intact.

(The writer is Chief Distribution Officer, ManipalCigna Health Insurance Company Limited)