Our parents often advise us to save money or have a backup in an emergency. We are asked to invest in health or life insurance policies and investments like term deposits, mutual funds, etc. But at a young age, things like watching our favorite shows, exercising at the gym, etc. seem more important to us. They make us happy and fit. We follow the mantra of self-love and self-happiness.
It might seem weird to save a pension fund in the early twenties, and you might think it isn’t necessary. But things like saving for a child’s education fund and having a health insurance plan is important. It’s the smartest approach you can take to managing your finances. A health insurance policy has the power to keep your savings intact.
Buy a good health insurance policy
Health problems and emergencies can occur at any time in life and are independent of age and income. Again, these days we have a stressful work-life balance, which takes away our health and our daily life. Although medical facilities are advancing rapidly with the help of science, technology and money, it is still becoming difficult to find a permanent solution to new diseases such as Covid-19.
But then, at a young age, we have a perception – “what is the need to buy a health insurance policy at this age? I am perfectly fine.” Note that even young people can be affected by serious illnesses at an early stage. Therefore, it is essential to have a health insurance policy early in life.
● Need to build a good complaint history: The right time to buy a health insurance policy is when you are at the peak of your health and the internal and external parts of your body are in good shape. You have to pay less premium when you are young and healthy because the possibility of loss is lower. You can think of this as a blessing in disguise, as it will help you establish a good claim history.
● Bonus without claim: You can qualify for a no-claim bonus when there are no claims in a given year. If there are no complaints in a year, you get a No-Claim Bonus (PNE). Typically, you can get additional coverage for each loss-free year at no additional cost. Over time, the insured amount for coverage increases and you enjoy higher face amount health coverage consistently, stress-free while staying healthy.
● Critical illness insurance: Due to a sedentary lifestyle, even young people suffer from fatal diseases such as cancer, kidney failure, paralysis, etc. These extreme conditions can be covered by the Critical illness insurance Politics. The expenses for treating these illnesses are too high, including multiple hospital visits, admissions, doctor’s visits, chemotherapy, etc., for a longer period. Usually, the critical illness insurance policy covers several costs associated with diagnosis and treatment, including hospitalization, chemotherapy, radiation therapy, surgery, blood transfusion, nursing care, and the cost of prescribed drugs, among others. Critical illness cover pays the sum insured upon diagnosis of a serious illness considered to be an acute illness, regardless of hospital costs. Therefore, it is essential and always useful to have critical illness coverage or rider to protect your savings from depletion in the event of a medical emergency.
● Pre-existing coverage: If you take out health insurance at a young age, you pay by default the waiting time related to any previous illnesses. But, there are only certain waiting periods that are covered for your pre-existing conditions. The period can be from one year to two years, and previous ailments are insured mainly after four years. The advantage of purchasing a policy early in your life is that most existing illnesses automatically fall below the sum insured as you get older.
● Tax benefit : When you are young and have a source of income, it pays to buy health insurance. If you pay a premium, you will enjoy tax benefits of up to Rs 25,000 under the Income Tax Act 1961. If your parents are dependent on you, the tax benefit can amount to Rs 50,000 on the health insurance plan taken out on behalf of your parents. .
As young people we are not that good at keeping our finances on track. Having a health insurance plan helps us manage our finances and keep our savings intact. Therefore, you need to have a health insurance plan to protect your long-term financial goals, enjoy lifelong access to quality health care, and lead a healthier life.