Q. I am 25 years old and have recently started earning. I want to buy a health insurance policy for myself, but I am not sure if I am at a correct stage to do so, and if I should postpone this for later. Could you please guide me on this? Gaurav Mishra
A. Everyone should have health coverage from the moment they’re born, because being uninsured has huge health and financial risks. Since you’ve just become financially independent, you may not be eligible to be on your parents’ insurance, and so the next best time to buy coverage is as soon as you start earning. Term insurance and health insurance plans thus should be on your financial agenda at the beginning of your career. A term insurance plan will help financially protect your family by working as an income replacement tool in the event of your untimely demise.
With a spurt in lifestyle-related disease, health insurance will help you deal with rising medical costs. Therefore, it’s a good idea to buy a health insurance plan right away. Here are a few pointers that may help you decide.
-Employers provide group health insurance cover to their employees. Do a comparison of the current medical and hospital costs and the group insurance cover provide by your organization to assess its sufficiency. If you feel the medical costs are beyond the company’s cover, it makes sense to buy a health insurance plan with adequate cover for current and later needs.
-Buying a health insurance policy at an early stage would cost you less in terms of premium as compared to a later stage, assuming you are not suffering from any disease.
-A sedentary lifestyle and other environmental risks have given way to many lifestyle diseases today. So it makes sense to buy a health insurance plan, which will protect you financially in case of a medical emergency. Many health insurance companies also provide annual health check-ups as part of the package that makes managing your health easier.
-In case of a health emergency, medical insurance will protect your finances and help you remain committed to your financial goals.
-Besides all this, it will also provide tax benefits under Section 80D of the Income-tax Act. Section 80D of the I-T Act allows an individual to claim a deduction for premium paid for a health insurance policy for an amount up to Rs. 25,000 per financial year for those under the age of 60.
-At an early age, there is lower likelihood of a pre-existing disease, so bagging a good health insurance deal is easier. In case a disease crops up later, the health insurance coverage will cover it automatically.
While buying a health insurance plan, do assess your family needs to get adequate coverage. Do a comparison of the health policy features provided by different insurance providers so that you choose the best plan for yourself. If you are single, this is the best time to buy a health insurance plan as your financial commitments are low and you have more money in hand to invest for your future.
Have a question on personal finance? Ping me on Twitter at @adhilshetty with the hashtag #AskAdhil. The writer is CEO, BankBazaar.com, an online marketplace for loans and credit cards.