Why health insurance is important for the youth?
Young individuals frequently decline to purchase health insurance, believing there is no or very little chance of being ill, and hence there is no use in wasting money on premiums. Young people’s participation in insurance pools, on the other hand, is critical for the Health Insurance Industry since, with a lower risk of becoming ill, their participation would lower the average claim ratio and load on the insurance pool, resulting in lower premiums.
Furthermore, health insurance not only gives tax benefits and aids in financial planning, but it can also be considered a kind of charity because the premium paid is used partly to pay for another insured person’s hospital bill, indirectly assisting them in times of need.
“Health insurance has become an important aspect of financial planning, particularly for the younger generation, as more than half of India’s population is under the age of 25, and more than 65 per cent is under the age of 35.” Young people have developed lifestyle ailments due to their fast-paced lives, including unbalanced food and an erratic sleep pattern. Furthermore, stressful schedules due to long working hours are harming not only their mental well-being but also their physical health,” stated Anuradha Sriram, Aditya Birla Health Insurance’s Chief Actuary Officer.
Types of Health Insurance in India
1. Individual Health Insurance
Individual health insurance covers a single person’s treatment costs. You, your parents, your partner, and your children are all covered under this policy.
Under this plan, each family member receives a separate sum insured. Like, if your plan sum insured is Rs 10 lakhs, each family member is authorised to spend up to Rs 10 lakhs during the policy’s term, i.e. if you acquire an individual plan for three family members, the total sum insured is Rs 30 lakhs.
Due to the separate sum insured amount, if something happened to all/some of your family members at the same time, this health insurance policy would cover them all.
2. Family Floater Health Insurance
A single sum insured is accessible for all individuals under one policy under such programmes. This entire money can be disbursed for the treatment of a single person, after which no further claims will be reimbursed in the event of a medical emergency.
As their medical demands are more complicated, senior citizens are not eligible for family floater policies.
3. Senior Citizen Health Insurance
Only people over the age of 60 are eligible for such plans, which are tailored to fit all of the elderly’s medical expenses.
4. Group Health Insurance
Employers provide similar programmes to their workers. The premium is paid by the employer, and measures are in place to ensure that the insured funds are renewed. Employee retention is aided by such group health insurance programmes, which are cost-effective.
Keep in mind, however, that this insurance coverage is only provided while you are employed at the company. You won’t be able to access the benefits of the insurance if you’ve been fired or quit your work.
4. Health Insurance with Maternity Insurance
Prenatal and postnatal care costs are covered by maternity insurance throughout pregnancy. For the first three months, medical expenses for a newborn are also covered. But, there is a two-year waiting period for such insurance.
5. Critical Illness
Because large medical bills accompany life-threatening disorders, proper treatment is needed. A critical illness insurance policy covers these circumstances, providing financial security for the best possible treatment and recovery for a patient.
However, remember that the set sum covered under this policy is only available if the insured individual lives for at least 30 days after being diagnosed.
6. Top-Up Health Insurance
Even if your sum insured remains the same, treatment costs can rise over time, even if you estimate them when you get a health insurance policy.
Rather than purchasing a separate policy, you may choose a top-up to your existing coverage in such instances. This add-on policy supplements your existing insurance coverage and can be used in an emergency.
However, to receive the top-up, you must first select a deductible amount. For example, suppose you choose Rs. 3 lakh top-up plan with Rs. 50,000 deductible.
Then, when it’s time to file a claim, you’ll have to pay the Rs—50,000 out of pocket. The insurance provider will step in and cover the remaining expenditures up to a maximum of 3 lakhs once the deductible has been reached.
These insurance plans are purchased to cover all of a person’s healthcare bills throughout their life. It is different from life insurance policies in that the latter offers cash protection regardless of whether the covered individual lives or dies.
Why should people buy health insurance at a young age?
“The fundamental goal of young people between the ages of 25 and 30 is to make considerable progress in life. Unfortunately, their health suffers as a result of their poor lifestyle, which eventually leads to health problems. “Young people must prioritise their health and prepare financially for the future,” Sriram added.
“Investing in comprehensive health insurance safeguards against financial irregularities while allowing the policyholder to create a healthy fitness regimen. Today’s health insurance options reward policyholders for leading healthy lifestyles and allow them to set fitness objectives,” she continued.
The following are some of the advantages of purchasing insurance at a young age:
1. Low premium at a young age
It is recommended to begin planning, saving, and investing as soon as feasible. The same may be said about health insurance. Early in life, one should invest in a health insurance plan because the possibilities of developing medical complications are smaller, and thus the health insurance premium is lower. Several items offer early age reductions that can be really beneficial in the long run.
2. Waiting time
It is the period of time during which you are not permitted to make health claims for pre-existing conditions, surgeries, or special treatments. If a person decides to get health insurance at a young age, such waiting periods will not affect him or her.
3. A health safeguard for your life
Health insurance, like any other commodity that requires protection from the elements, protects the insured against the financial ramifications of medical emergencies. While health emergencies are uncommon at a young age, it is still necessary to be prepared. Furthermore, the pandemic has proved that many health issues are beyond one’s control and can result in severe financial hardship.
4. Duration of your health cover
When purchasing health insurance, there is usually an age restriction that must be met. Compared to people who purchase health insurance at the age of 40-50, those who purchase health insurance at a young age are protected for a longer period. In addition, if the insured is of advanced age and/or has a poor health condition, insurers may reject the application or charge an additional premium.
5. It brings financial stability to your life
One of the most significant advantages of purchasing health insurance is that it provides financial security to the insured. One can protect themselves from financial irregularities coming from unforeseen medical bills by paying a little premium.
6. No Claim Bonus
No claim bonus is money that is added to the total insured for each year without a claim. Because there are fewer risks of significant disease and health-related difficulties at a young age, policyholders can benefit from a no-claim bonus for longer, giving inflation protection for future medical bills.
7. Tax Benefits
A health insurance policy’s premium is tax-deductible under section 80D of the Internal Revenue Code. As a result, you can claim an additional tax benefit (subject to change according to the tax laws)
8. Additional Benefits
Insurers have offered a range of supplementary benefits attached to health insurance plans known as health riders to shield policyholders from health-related charges. Health riders allow an existing policy to be tailored to the needs of the insured at a very minimal cost.
9. Mental health consultations
Working people must look after both their physical and emotional health. Having the desire to succeed in their workplace can provide a number of difficulties. One of the difficulties they face is balancing their personal and work lives. Insurers have responded by offering mental health consultations with experienced psychologists/psychiatrists as an add-on benefit, allowing policyholders to protect their mental health as well.
“The epidemic has shifted people’s perspectives by emphasising the significance of health insurance.” “Investing in a comprehensive health insurance solution not only provides security to the insured, but it also encourages them to live a healthy lifestyle by regularly monitoring their health and allowing them to take corrective measures to enhance it,” Sriram concluded.
Edited by Prakriti Arora