When is the right time to buy a health insurance policy?

Evolving lifestyles and the ongoing Covid-19 pandemic bring our health into focus. We regularly face new challenges to our health. The health infrastructure is already overwhelmed in our country. So, we cannot ignore the importance of health insurance policies.

A famous Chinese proverb teaches us, “The best time to plant a tree was 20 years ago. The second best time is now.” It means you should act now and avoid delays in taking critical decisions in your life.

We never know when a health emergency will strike us. Whether we are young or old, we might face health risks at any stage of our lives. It is advisable to purchase a good health insurance policy at the right time to protect ourselves from getting into financial difficulties because of these health emergencies. And the right time to do so is now. The day you start earning money or become financially independent, you must get health insurance coverage. 

So, let’s come back to an important question: When is the right time for you to buy a health insurance policy?

Buy A Health Policy At An Early Age 

Often people feel that they are healthy with no medical conditions, and they can buy health insurance at a later stage of their lives, but this is a big mistake. When you are in your 20s, you can buy a health policy at a lower cost. Typically, you are less likely to suffer from any serious health condition when you are young. Therefore, you can get a health policy without any restrictions for pre-existing ailments. As people get older, they become more susceptible to diseases. When you are young, there is no requirement for a medical test to prove you are healthy. In contrast, if you buy insurance when you grow older, the insurance company may ask you to go through several medical checks before issuing a health policy.

If you buy the health policy at a young age, it will pay for expensive hospitalisations for which you may not usually have any savings if you have just started working. 

There are other benefits. For example, suppose you have purchased health insurance early and don’t make any claim during the policy year. In that case, the health insurance company gives you a No Claim Bonus (NCB) by increasing your cover size for every such claim-free year without any extra charges. So, you can continue to accumulate NCB benefits year after year and enjoy much higher health cover while paying the same premium. 

Why Should You Buy Now?

Having health coverage can help you do better financial planning and eliminate the risk of disruption in achieving your financial goals due to a health emergency. Another benefit is that payment of premiums towards health insurance allows you the benefit of tax deduction u/s 80D. You can claim tax deductions up to Rs 25,000 in a financial year. If you buy a health policy in your 20s, you can start getting the tax benefit u/s 80D from an early age. Thus you can save a lot of taxes in the long term. 

What To Do If You Missed Buying Early 

You can buy a health insurance policy when you are in your 30s or even early 40s without undergoing a medical check-up. Most health insurance companies require health check-ups if the buyer’s age is above 45 years. 

If you are above the age of 45 and don’t have any pre-existing health ailment, you can buy a health policy by simply undergoing a health check-up prescribed by the insurance company. 

If you have some pre-existing disease, you must disclose the same before purchasing a health policy. You will still get the health policy but with a waiting period of around 2 to 4 years for getting a cover against the pre-existing disease. 

As you grow older, it becomes more and more challenging to get a health policy due to deteriorating health. Once you cross the age of 60s, your health insurance options shrink. Few insurance companies would want to cover you though a few may offer you a policy specifically designed for senior citizens but at a high premium. They may cap the treatment of specific ailments or ask you to co-pay when there is a claim.

Buying health insurance at an early age can benefit from low premiums, and you can enjoy health cover without any restrictions such as co-payment, capping, etc. Last but not least, once you have bought a health policy at an early age, never fail to pay its renewal premium on time.

(The author is CEO, Bankbazaar.com)