Indians can purchase health insurance when they turn 18 years. Before adulthood, family health insurance plans can serve as healthcare policies for underage members in a family.
But 18 years is too early to buy health insurance, right? Wrong!
If you can afford such a policy when you turn 18, go for it. Here are some benefits you can expect from such an early purchase:
Cheaper Policies for Younger Policyholders
Health insurance providers consider several factors when determining a policy premium. These aspects are:
- Deductible and co-payment clause in the plan.
- The sum insured amount you pick.
- Coverage for pre-existing medical conditions.
- Any add-on covers.
However, another factor that plays a considerable role in determining your premium is your age.
An insurance company cannot predict whether someone is at risk from diseases or conditions. The policyholder’s age is the only clue regarding their physical well-being.
Therefore, providers assume that older policyholders are high-risk candidates who may claim against the policy frequently when compared to younger policyholders.
Therefore, if you are in your 40s or 50s and avail insurance, you will pay more for a similar cover than you will if you avail the policy when you are in your 20s.
Easier to get over the Waiting Period
Health insurance policies come with a waiting period of 30 days before the completion of which policyholders cannot raise claims (except for accidental hospitalisation).
A younger individual is relatively free from any serious health condition. Thus, those in their twenties are less likely to require the benefits of the health insurance policy right after purchasing it, and thus can pass the waiting period easily without raising claims.
On the other hand, as individuals grow older, they are at a higher risk of being exposed to medical issues.
As a result, if one avails the insurance policy at an older age, he/she might need to make a claim before the waiting period is over and subsequently have their claim rejected.
No Requirement for Medical Tests
If you purchase an insurance cover in your old age, you will be required to undergo a series of medical tests before you are deemed eligible to avail it. The insurance cover is then issued based on the results of such medical examinations.
If you avail an insurance cover when you are young, you will most likely not be subjected to undergo these tests.
Greater Likelihood to Accumulate Cumulative Bonus
Policyholders are liable to receive a cumulative bonus for every claim-free year they experience during the policy tenure.
Younger people are more likely to remain fit, making health insurance policy claims unnecessary for them. They can easily accumulate increased cumulative bonus with each passing year.
The CB leads to an increase in the sum insured for your plan, leading to enhanced coverage for medical conditions. Greater CBs may also provide additional benefits.
Income Tax Exemptions ranging up to Rs. 25,000 per year
If you pay premiums for a health insurance plan, you can enjoy income tax deductions of up to Rs. 25,000 per year, according to Section 80D of the Income Tax Act, 1961.
If you avail the insurance at 21 years, you can save this amount in taxes for every year of healthcare cover.
While the same benefit is available when you opt for the policy later, buying health insurance early leads to better net tax savings throughout your career. Refer to the following table to understand the tax-saving potential for health insurance policyholders.
Tax Deductions available under Section 80D
For self and family (spouse and unmarried children) - Upto Rs. 25,000
For self and family + parents below 60 years of age - Rs. 25,000 (for self) + Rs. 25,000 (for parents)
For self and family (where eldest member is below 60 years of age) + parents above 60 years of age - Rs. 25,000 (for self) + Rs. 50,000 (for parents)
For self and family (where the eldest family member is above 60 years of age) + parents above 60 years of age - Rs. 50,000 (for self) + Rs. 50,000 (for parents)
As the table suggests, you can avail substantial tax benefits by paying health insurance premiums. Buy the policy at a young age and keep saving taxes for a long time.
Are you still unsure about buying health insurance?
Let’s break down your financial responsibilities and liabilities, based on your age to make matters clearer.
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