Health Insurance For Different Tax Brackets Under Section 80D

One elderly, and one young. One nearing retirement, one in the prime of his life. It makes sense for the older person to buy health insurance right now because he is more likely to have a major sickness or even suffer an accident- we all know that bones get more brittle as we grow older and our internal systems become weaker. For the younger person, a major illness might be years away, and his active schedule may help to keep him in shape.

Or so you may believe!

The truth is, health insurance is the one thing that protects your hard-earned money from getting wiped out in case you find yourself seriously ill, as a victim of an accident, or need emergency surgery. While some of these situations can be avoided if you live a healthy life, going to the gym regularly and controlling your diet, many of these are completely unpredictable, especially for hereditary conditions.

Here are 9 reasons to buy health insurance early that you may not have considered:

Rising costs

Healthcare inflation is increasing at double the rate of overall inflation in India. The cost of hospital and nursing charges, contraceptive devices, doctor’s consultation fees, and spectacles have been known to rise by up to 15% annually[1]. The inflation in the cost of medicines doubled from 3.78% in 2017-18 to 7.2% in 2018-19[2], which can greatly increase your monthly medical expenses.

No time

Millennials (those born between 1981 and 1996) start to become unhealthy at the age of 27- this number is expected to decrease to 24 in a few years.[3] An even more startling fact is that up to 40% of people between the age of 21 and 27 today are obese, and diseases related to lungs and hearts are increasing rapidly. These numbers mean that the chances of ending up in the hospital before you turn 30 are higher now than ever.

Wrong time

Your health insurance cover does not start from the day that you purchase your policy. Different diseases come with different waiting periods ranging between 30-90 days. It is only after this period that your coverage begins. So, if you are hospitalized during your waiting period, it will be as good as not having a policy. This applies to a variety of conditions such as cataract, maternity, knee replacements, urinary stones and more.

Lower premium

The earlier you get health insurance, the healthier you are. Thus, you risk your insurance premiums getting more expensive every year because the risk of you falling ill become higher. A health insurance policy with Rs. 10 lakh coverage will cost you much less as a 25-year-old than if you buy it as a 35-year-old, or even as a 28-year-old, for that matter. Though medical tests are not usually mandatory at such a young age, they will be when you grow older, and there are higher chances of your medical history has kicked in for hereditary conditions such as hypertension, cholesterol and diabetes.

Pre-existing conditions

If you already have a medical condition when you are purchasing a health insurance policy, you may have to pay a higher premium or miss out some important features and benefits. If you take a policy at a young age, you have a wider range of comprehensive policies to choose from.

Discounts

Much like car insurance, there is a concept of No Claim Bonus on health insurance. This means for every year that you do not make a health insurance claim, you get a discount the next time you renew. This bonus adds up year after year and the cumulative bonus can help you save money.

Returns on investment

The longer you stay invested in a financial product, the higher the returns- this applies to both debt and equity investments. That is why it is recommended to start investing early, before your obligations kick in when you start a family. But if you spend all of your savings on a sudden financial emergency, you will not be able to invest the money you manage to not spend, which can completely derail your financial plans.

Insufficient cover

In case you are wondering why you need to get an individual health insurance policy when you already have a group insurance policy from your employer, consider this: according to a survey conducted by Willis Towers Watson, only 11.5%[4] of the surveyed companies consider the benefit of employees while providing a health care plan. Group health plans do not let you customize your coverage, stop when you are unemployed, and usually do not cover major expenses like hospital room rent, since the cover is split among you and your co-workers, so you cannot depend on this policy alone to protect your finances.

Tax benefits

In your early years as a professional, every rupee truly counts. Health insurance is a great way to save tax and it is an investment that will definitely pay off, because every one of us ends up in the hospital at some point or another, even if it is just for a routine checkup. As a salaried professional, you can get tax benefits of between Rs. 25,000 to Rs 60,000 under section 80D of the Income Tax Act. To know more, read Facts About Health Insurance Tax Benefits You Should Know About.

Make sure you invest in health insurance for yourself as early on as possible to make sure you are insured against all kinds of health risks. #ThinkAhead and opt for Tata AIG health insurance to secure yours and your family’s future.