The purpose of the health insurance is to cover the hospital bills and related expenses. Today, we will give you top reasons why you should buy health insurance today and should not depend only on health cover provided by the employer.
Employer health insurance – Group policy
Group insurance offered by employers is available only till the time you are associated with a company and it might not offer wide coverage. It is only a perquisite that is provided by the employer to its employee. The features in the policy are based on the budget your employer is willing to pay as premium. It may not suit your requirements and is not at all personalized.
It is better to have your risks covered than dipping into your long-term savings in times of emergencies. Most of us do not have high liquid savings and the employer insurance may not have sufficient health cover, one big hospital bill and we will be breaking the savings meant for other long-term goals.
It is very important to protect the nest egg we are saving for long term financial goals and health insurance is a must to protect that nest egg.
Lower rejection rate
It is highly recommended to take health cover as early as possible. The reason is simple: when you are fit and healthy, insurance companies will issue you health insurance without any loading (extra premium), permanent exclusion (exclusion of a pre-existing disease) or co-payment clause (where you need to pay a particular percentage of the bill).
We have observed that people want to buy health insurance after suffering from something serious. Health insurance companies are smarter than us, they want to issue the policies to healthy persons, as the chance of claim is low. So, the early starters have the advantage of a lower rejection rate from the company.
Best time to buy a health insurance policy is when you are healthy!
Apart from coverage, you also get deductions on your income through section 80 D of the income tax act if you have opted for the old regime taxation. You (as an individual or HUF) can claim a deduction of ₹25,000 under section 80D on insurance for self, spouse and dependent children.
An additional deduction for insurance of parents is available up to ₹25,000, if they are less than 60 years of age. If the parents are aged above 60, the deduction amount is ₹50,000.
In case, both taxpayer and parent(s) are 60 years or above, the maximum deduction available under this section is up to ₹1 lakh.
This is one of the most important reasons to buy health insurance as early as possible. So, all the health insurance policies come with a standard waiting period (generally 2 years) for treatments which can be planned – for example cataract surgery, gall bladder stones or kidney stones. Policy holders who have completed this waiting period and take the claim easily even for these treatments.
If you have a pre-existing condition, it is better to buy the policy today if the insurer is ready to insure you. You can use time to your advantage and complete the waiting period in case this condition could lead to any issues later.
Rise in lifestyle diseases
With increasing stress, anxiety, bad eating habits and lack of physical activity, the number of people getting affected by lifestyle diseases is on a rise. In a survey done by GOQii India Fit Report 2020, 62% of people are either at high or borderline risk for diseases like diabetes, thyroid & hypertension.
Once any of these diseases are diagnosed, the insurance company will either reject the issue of the policy or will demand a higher premium.
Free health check-ups
All insurance companies provide you with a health check-up facility. Hence, buying insurance today will not only provide you tax benefits, but also save your health check-up costs.
No claim bonus
You get the benefit of no claim bonus if you have held the policy for long periods. No claim bonus basically adds a percentage of the sum assured to the sum assured. For example, there are policies that will add 50% of the sum assured to the policy if you do not claim anything in a year. If your policy sum assured is 5 lakhs, and you do not claim, the new sum assured will be added to the policy and will be 7.5 lakhs now.
Nishant Batra CWM® is Chief Goal Planner of Holistic Prime Wealth.
Disclaimer: The views expressed in this article are of the author, not MintGenie.