Health insurance is an essential aspect of personal finance that is often overlooked by young adults. Many young people believe that they are healthy and don’t need health insurance, but this is a dangerous assumption. Health insurance is a crucial investment that can protect you from financial ruin in the event of a medical emergency. In this article, we will discuss the importance of health insurance at a young age.
Lower Premiums
One of the most significant advantages of purchasing health insurance at a young age is that the premiums are lower. The premiums are calculated based on the risk factor, and young adults are considered low-risk due to their age and overall good health. The younger you are, the lower your premiums will be, making it an affordable option.
Waiting out the pre-existing waiting period
When you are young, chances are that you don’t have pre-existing illnesses. As such, when you buy a health insurance policy, you can easily wait out the applicable waiting period for pre-existing illnesses. Then, when you actually suffer from any illness in later years, you can avail instant coverage since the waiting period is already over.
Earning no claim bonus
Under a health insurance plan, every year that you don’t make a claim, your sum insured increases by a specific percentage through no claim bonus. This helps you in increasing the sum insured by 50% or 100% of the original amount and gives higher coverage at the same premium with NCB. When you are young, you are less likely to make claims thereby accumulating the no claim bonus which would give you a wider coverage under the plan. Now a days there are plans like Niva Bupa’s ReAssure 2.0 which keeps your yearly premium unchanged until you make your first claim. So effectively when you buy the plan at the age of say 25 years you will be paying premium for the 25-year-old for next several years.
Tax benefits on the policy
Let’s not forget the tax advantage which your health insurance policy would provide. The premium that you pay for the health insurance policy would allow you a deduction on your taxable income up to INR 25, 000 under Section 80D of the Income Tax Act, 1961. Thus, the policy would not only provide coverage against sudden illnesses or injuries, it would also help you save taxes.
Financial security
Another major reason why health insurance plans make sense is the financial security that they provide. With a health insurance policy, you can be secured that any medical contingency, however unforeseen, would not impact your finances. Given that you are young and might have limited savings, a health plan gives you the necessary financial security against medical emergencies. You can, then, plan for other financial goals and ensure that planning for such goals does not get impacted in a medical emergency.
Access to Preventive Care
Health insurance policies often cover preventive care such as annual check-ups, vaccinations, and screenings. These services can help you identify health issues early on, and with early intervention, you can prevent the problem from becoming more severe.
Peace of Mind
Lastly, having health insurance at a young age can provide you with peace of mind. You can rest easy knowing that you are protected in case of a medical emergency. This peace of mind can help you focus on other aspects of your life without worrying about the financial burden of a medical emergency.
In conclusion, purchasing health insurance at a young age is a smart investment that can protect you from financial ruin in the event of a medical emergency. It provides access to preventive care, covers pre-existing conditions, and offers financial protection. It also ensures that you have peace of mind and can focus on other aspects of your life without worrying about medical expenses.
