By: Pankaj Verma
Being in your 20s can be an exciting phase of one’s life. When they start their career, there are many aspirations, targets, goals, and liabilities that vie a piece of the salary-pie. On one hand, there could be impulse spending, while on the other hand, there may be student loans that are yet to be written off. This is a phase which thereby calls for financial planning. While the youngsters are aware that they should be putting their money aside in monthly savings, it is important to shed light on the importance and benefits of covering themselves and their families’ health through a comprehensive health insurance plan.
Youngsters often overlook Health Insurance due to multiple misconceptions or beliefs.
Youngsters are not faced with health complications, hence the requirement for insurance takes a back-seat – While it is true that medical complications increase with age, it cannot be assumed that youngsters are immune to health-related issues. The pace of modern life and lifestyle is changing which brings its own set of stresses and challenges. One can no longer correlate diseases and age. Also, people of any age can be affected by certain events like accidents and health insurance policies cover such eventualities as well. It also makes sense to take insurance when you are young and healthy because as you grow older and beset by health-related problems, it becomes difficult to get insurance cover and even if available, it might come in a restricted form.
Often the youth believe that they are single and young, so health insurance is not a priority for them – Health insurance is important irrespective of one’s marital status. This is because most insurance plans are scalable, and one can alter the cover as per the changing requirements through their lifecycle. Not to forget, a family floater also covers your dependent parents.
Corporates also provide insurance so the youth do not feel the need to get an additional personal health insurance plan – Corporate insurance covers you only as long as you are in employment with a particular company and it will cease once you leave the organisation. It also has certain restrictions in terms of limited sum insured and sometimes cappings. In such a situation, it makes sense to have a separate health insurance policy for self and family which will provide continuous coverage even at the time of change in employment. Not to forget that individual health plans can be purchased after evaluating the specific requirement of the individual and their family whereas corporate policies are usually standard across the organization/grades.
Buying Health Insurance also comes with a key benefit that will help one save tax under section 80D of the Income Tax law.
Ample of options are available ranging from a Sum Insured of Rs. 50,000 to Rs. 30,00,000 and tenure of 1 to 2 years.
Things to keep in mind:
- Firstly, evaluate your family’s risk factors since they vary from one individual to another depending on age, gender, history of family illnesses, work-life and even geography.Hence the requirement has to be assessed and an adequate cover must be taken.
- One must look for a policy which offers a cumulative bonus. Cumulative bonus leads to annual increasing addition in sum insured for not claiming in the policy.
- It is also important to understand Sub Limits. If the policy has sub-limits, then the Claim cover will be up to the sub limited amount only. Any amount on top will be paid from one’s own pocket.
- It is extremely significant to bear medical inflation in mind. Health insurance is taken for ensuring a safer future with medical expenses covered. It is smart to keep a 7-10% medical inflation rate in mind while deciding policy coverage.
An adequate and comprehensive health insurance cover will provide us with assurance and peace of mind. (The writer is the Head -Underwriting & Reinsurance at SBI General Insurance)