Right age to buy Health Insurance
Health Insurance is necessary for every individual, keeping in mind the rising medical costs and spurt of lifestyle diseases amongst Indians. A medical emergency can attack anyone, anytime and impact an individual emotionally and financially. Financial advisors therefore suggest that it is prudent if you to buy a health plan early in life.
It is a common belief that when you are young and healthy, there is no need to avail of health insurance coverage. However, today life is fast-paced and erratic with unhealthy eating habits and irregular or lack of exercise. As a result, there is an increase in lifestyle-related illnesses striking at a young age.
Ideally, the 22- to 23-year-old graduate purchases a life insurance policy to cover the debt assumed. However, most individuals under age 25 are more concerned with paying current bills than acquiring additional ones.
While the optimal age to purchase life insurance is under 35, Millennials are the least likely to purchase a policy. In 2015, individuals between 18 and 35 overestimated the cost of a policy by 213%.
The Indian laws allow a person as young as 18 years to avail of health insurance. A child age less than 18 years may be covered under health insurance policies availed by the parents.
Some of the factors that determine the premium on health plans are as below:
- The sum assured
- Co-payment and deductible chosen
- Insured’s age and total individuals covered under the plan
- Additional riders
- Pre-existing medical conditions, if any
One of the factors that determine the health insurance premium is your age. Therefore, it is beneficial to buy health insurance at an early age.
Reasons for opting Health Insurance
1) Waiting Period
Some pre-existing diseases are not covered under your health insurance from day one. There is a waiting period of generally 4 years before which you shall not get them covered. So starting early is a better option.
2) Higher Premium
The later you get a health plan, the higher your premium will be. Hence, there is a direct relation between your age and health insurance premium. Now you know what to do.
3) Cover Cess
Most insurers have a minimum age entry for health insurance policies. If you cross that age you won’t be able to enjoy the benefits of health insurance plans.
4) Medical Checkup
If you get a health insurance at an early age, insurers usually don’t enforce a medical checkup as compared to older people.
5) Comprehensive Plan
If you get health insurance earlier in life you get to avail a lot of benefits from your comprehensive plan at a lower premium.
6) Lower Coverage Cost
Coverage costs increase with your age. When you are younger the possibility of having had surgery or any medical condition like diabetes or hypertension is lower. This helps in decreasing your coverage cost. On the contrary, if you decide to get a health plan when you already have a medical history, your premium increases.
7) Chances of Rejection are Less
The Insurance Regulatory and Development Authority of India (IRDAI) states that health insurance companies cannot deny a policy renewal even if the insured person is very ill. If you have already purchased a health insurance policy, you have all rights to seek a renewal each year. However, an insurance company has the full right to reject a new application for a person with pre-existing conditions.
And if the insurance company does not reject the policy, it can impose restrictions and exclusions on the insurance policy. This can limit the benefits you avail when it matters. You can avoid this issue by obtaining a health plan when you are young and healthy. This ensures you get a more comprehensive deal. And any diseases that are diagnosed at a later date can get covered automatically under your health insurance plan.
Benefits of Investing Early in a Health Plan
1. Affordable Premium
When you are young, you are healthy with no serious medical conditions. Therefore, the insurers perceive you as a low-risk policyholder, who has a lower probability of filing a claim under the health plan. Therefore, you are able to procure higher coverage like critical illness insurance for an affordable premium.
2. Availability of Options
At an early age, you have the liberty to compare different health plans offered by the various insurers, thereby allowing you to make an informed decision. Moreover, there is a lower probability of non-acceptance of your proposal. As you grow older, insurers may not offer coverage for all types of ailments, thereby reducing the number of available options.
3. No Requirement of Medical Tests
If you are old, the insurance companies may make it mandatory to undergo several medical tests and check-ups. The results are analyzed by the underwriters, which in turn determine whether the policy will be issued to you or not. Most health insurance companies do not require you to undergo medical tests when you are young and healthy.
4. Waiting Period
Almost every health plan has a certain waiting period during which coverage for pre-existing conditions is not available. Therefore, if you have a medical condition, it is not immediately covered under the policy. Investing at an early age ensures the waiting period is over in case you are diagnosed with any ailment in the future and coverage for the same commences immediately.
5. Lifelong Renewal
Insurers may offer lifelong renewal if you purchase the health policy at an early age. This secures your financial stability in case of hospitalization at a later age. However, it is crucial that you renew the policy on or before its due date to ensure continued coverage.
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