In order to be prepared for emergencies, our parents often advise us to save money. In addition to investments such as fixed deposits and mutual funds, we are also asked to invest in health insurance policies or life insurance policies. However, we seem more concerned with things like binge-watching our favorite shows, working out at the gym, and other such things when we are young. We feel happy and fit when we are around them. A mantra of self-love and self-happiness guides us.
Saving a pension fund in your early twenties might seem bizarre, and you might think it’s unnecessary. The importance of health insurance and saving for a child’s education cannot be overstated. Managing your finances in this manner is the smartest move you can make. The power of health insurance lies in its ability to protect your savings.
Choosing a good health insurance policy
Despite age and income, health issues and emergencies can arise at any time. Today, we have a stressful work-life balance, which affects our health and daily lives. Medical facilities are improving rapidly with the help of science, technology, and money, but it is still hard to find a permanent cure for diseases like Covid-19.
Nevertheless, at a young age, we have a perception – “what is the need to have a health insurance policy at this age? I am fine.” Note that even young children are susceptible to critical illnesses. The importance of having a health insurance policy early in life cannot be overstated.
Need to build a good claim history
Ideally, you should purchase health insurance when you are at the peak of your health and your internal and external organs are functioning properly. When you are young and healthy, you have to pay less as a premium since there is less chance that you will incur a claim. In the end, you can use this as a blessing in disguise, as it will help shape your claim history for the future.
A no-claim bonus can be earned when there are no claims in a given year. Whenever there is no claim in a given year, a no-claim bonus (NCB) is paid. It is usually possible to get additional coverage for every year without a claim without paying extra. The insured amount for coverage increases over time, so you have higher health coverage consistently without stress as long as you stay healthy.
Critical Illness Insurance
Even young people suffer from life-threatening diseases like cancer, kidney failure, paralysis, etc. due to a sedentary lifestyle. Under Critical Illness Insurance, these extreme ailments can be covered. Multiple hospital visits, admission, doctor visits, chemotherapy, etc., are too expensive to treat such diseases over an extended period of time. A critical illness policy typically covers several costs associated with diagnosis and treatment, including hospitalization, chemotherapy, radiation, surgery, blood transfusions, nursing care, and prescribed medicines. On diagnosis of a severe illness that counts as an acute illness, a critical illness policy pays the sum assured at once. In order to protect one’s savings from being drained in the event of a medical emergency, it is necessary and always helpful to have a critical illness insurance plan or rider.
You automatically avoid waiting time related to previous diseases if you buy a health insurance policy at a young age. You are only covered for certain waiting periods if you have pre-existing conditions. The insurance period lasts between one and two years, and previously existing ailments are mostly covered after four years. As you age, most existing diseases are automatically covered under the insured sum if you buy a policy early in life.
Young people with a source of income should purchase health insurance when they are young. Income Tax Act, 1961, provides tax benefits of up to Rs 25,000 for paying premiums. In the event that your parents are dependent on you, the tax benefit can reach Rs 50,000 on the health insurance policy purchased for them.
Young people are less efficient at keeping their finances organized. We can manage our finances and maintain our savings with a health insurance plan. To protect long-term financial goals, enjoy lifetime access to quality health care, and live a healthier life, you should obtain health insurance.