When is the right time to buy health insurance?
Changing lifestyles and the current Covid-19 pandemic put the spotlight on our health. We are regularly faced with new challenges to our health. The health infrastructures are already overwhelmed in our country. Thus, we cannot ignore the importance of health insurance policies.
A famous Chinese proverb teaches us: “The best time to plant a tree was 20 years ago. The second best time is now. It means you need to act now and avoid delays in making critical decisions in your life.
You never know when a health emergency is going to hit us. Whether we are young or old, we can face health risks at any stage of our lives. It is advisable to take out good health insurance at the right time to protect yourself from financial difficulties due to these health emergencies. And the right time to do it is now. The day you start earning money or become financially independent, you must take out health insurance.
So, back to an important question: When is the right time for you to purchase health insurance?
Buy a health policy at an early age
Often people are under the impression that they are healthy, without medical conditions, and can buy health insurance later in life, but this is a big mistake. When you are in your twenties, you can buy a health insurance policy at a lower cost. Generally, you are less likely to suffer from a serious health problem when you are young. Therefore, you can get a health policy without any restrictions for pre-existing conditions. As people age, they become more susceptible to disease. When you are young, it is not necessary to pass a medical examination to prove that you are in good health. On the other hand, if you buy insurance when you get older, the insurance company may require you to pass several medical checks before issuing a health policy.
If you buy the health insurance policy at a young age, it will pay for expensive hospitalizations that you usually won’t have savings for if you’ve just started working.
There are other advantages. For example, suppose you purchased health insurance early and made no claims during the insurance year. In this case, the health insurance company grants you a non-claim bonus (NCB) by increasing the size of your coverage for each claim-free year at no additional cost. Thus, you can continue to accumulate the benefits of the PNE year after year and benefit from a much higher health coverage while paying the same premium.
Why should you buy now?
Having health coverage can help you do better financial planning and eliminate the risk of disruption in achieving your financial goals due to a health emergency. Another advantage is that paying health insurance premiums allows you to benefit from an 80D tax deduction. You can claim tax deductions up to Rs 25,000 during a financial year. If you buy a health insurance policy in your twenties, you can start getting the u/s 80D tax benefit from an early age. So you can save a lot of taxes in the long run.
What to do if you missed buying early
You can purchase a health insurance policy when you are in your 30s or even early 40s without undergoing a medical check-up. Most health insurers require health checks if the buyer’s age is over 45.
If you are over 45 and have no pre-existing medical conditions, you can purchase health insurance simply by undergoing a health check prescribed by the insurance company.
If you have a pre-existing condition, you must disclose it before purchasing a health insurance policy. You will still get the health policy but with a waiting period of around 2-4 years to get pre-existing condition coverage.
As you get older, it becomes more and more difficult to get a health policy due to deteriorating health. Once you pass the age of 60, your options for health insurance diminish. Few insurance companies would want to cover you, but a few may offer you a policy specifically designed for seniors, but at a high premium. They may limit the treatment of certain conditions or ask you to co-pay in the event of a claim.
Purchasing health insurance at an early age can enjoy low premiums and you can enjoy health coverage without any restrictions such as co-payments, caps, etc. Finally, once you have purchased health insurance at an early age, never fail to pay its renewal premium on time.
(The author is CEO, Bankbazaar.com)