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Is It Too Early To Get Health Insurance

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20s is an exciting time. Job hopping, speed dating, creating travel diaries, first car, first iPhone and many more milestones are a part of one’s life during this time. However, millennials are smart and don’t ignore their financial responsibilities either. They live for the present yet plan for the future. Being financially savvy, they understand health insurance is an important part of financial planning but at the same time they may perceive it as a product which can be bought later in life.

However, there are several benefits of buying health insurance when one is younger. Here are 5 of them:

Premium is cheaper

The earlier one buys health insurance, the cheaper is the premium. For instance, a 25 year old can purchase a health insurance policy which offers a coverage of Rs 5 lakhs by paying a yearly premium of approximately Rs 5000. However, the yearly premium for acquiring the same coverage could be close to Rs 6000 for a 35 year old and Rs 7000 for a 45 year old.

Your coverage can be higher

Private healthcare expenses are becoming costlier. As per publically available data average cost of cancer treatment is Rs 10 lakhs, a kidney transplant could set you back by Rs 4 lakhs and a valve treatment could make you poorer by Rs 3.5 lakhs. We haven’t even included the cost of medicines. As a 25 year old, you could purchase a coverage of Rs 10 lakhs for Rs 7000 to Rs 12000. But for a 45 year old, health insurance plans offering coverage of Rs 10 lakhs would vary between Rs 9000 to 15000 per year depending on the insurer. Therefore if you purchase health insurance in your 20s, you can easily go for a higher coverage at a lower premium.

Tax benefits

Who doesn’t like to save tax? Section 80D of the Income Tax Act, 1961 enables one to claim tax deduction on annual income which would be equivalent to the annual premium paid for health insurance cover. So if you have paid a premium of Rs 5,500 for a cover of Rs 5 lakhs for the financial year 2018-19, you can claim a tax deduction of Rs 5,500 while calculating income tax. The earlier one buys health insurance, the longer one can save taxes. Imagine you have purchased health insurance for the first time at the age of 35, this means you lost the opportunity to claim tax deduction for the last 10 years.

You are healthy (Pre-existing conditions)

When one is above the age of 40 and starts exploring health insurance plans, one will discover that most policies command higher premiums but offer lower benefits. For customers above a certain age, insurers would exclude certain pre-existing conditions which would defeat the purpose of getting a health insurance policy.

No claim bonus

If the insured doesn’t make any claim during the preceding year of a policy term, the insurer offers a no claim bonus to the insured. If you buy health insurance in your 20s, you would have accumulated a decent amount as ‘no claim bonus’ while renewing your health insurance policy assuming that you wouldn’t have claimed the payouts. This accumulated bonus amount increases your coverage which would prove extremely beneficial when you are older and need a higher coverage. In most cases, no claim bonus ranges from 5% to 100% of sum insured.

If you are in your 20s and haven’t purchased health insurance yet, what are you waiting for? Go ahead and right swipe for health insurance with Bharti AXA.

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