It is known to everyone that health insurance is crucial for managing personal finances and is a wise investment in one's overall financial well-being. It is very important to secure comprehensive health insurance coverage early in life, which can lead to significant long-term savings on premiums. This is due to the following reasons:
Health Insurance & Its Significance
While the expenses associated with healthcare can be substantial, not having insurance may result in a considerable financial burden. Health insurance offers financial protection from unexpected medical expenses and can aid in managing the cost of medical care, enabling you to access high-quality healthcare.
By investing in health insurance early on in life, you can obtain extensive coverage and enjoy long-term savings on premiums. According to experts, a person's age is a significant rating factor for all health insurance products. This is because the morbidity rates increase with the age of the person. Therefore, the health insurance premium increases as the person ages to align the premium rates with the incidence rates.
"After a certain age, the health complication may be such that cover to the person may not be offered by the insurance company. The policy may be rejected, or the pre-existing diseases may be excluded from the coverage for an unhealthy individual. The likelihood of a proposal getting rejected at a younger age is very low. Therefore, it is important to buy health insurance at a younger age. This not only helps to save the premium but also ensures that one continues to stay insured on each renewal," says Sunil Sharma, president, chief actuary and chief risk officer, Kotak Mahindra Life Insurance Company.
Here are the long-term benefits of investing in health insurance early in life:
Lower Premiums: Individuals who are younger and healthier usually pay less in premiums than those who are older. By investing in health insurance early, you can secure these lower premiums and potentially save a significant amount of money throughout your policy. "By purchasing health insurance at a younger age, individuals can lock in a lower premium rate, as insurers consider them to be less risky than older individuals with potential pre-existing health conditions. This means that the premium paid by an individual for a health plan purchased at a younger age is usually lower than the premium paid for the same coverage purchased at a later age," says Rakesh Goyal, Probus Insurance director Broker, an insuretech broking company.
"Moreover, if an individual invests in health insurance early and maintains the policy for a longer period, they may be able to take advantage of a 'no-claim bonus' offered by many insurers. This bonus reduces the premium amount for every claim-free year, which means an individual can save money on their premium in the long run," adds Goyal.
Better Coverage: By investing in health insurance early on, you can access extensive coverage encompassing preventive care, regular check-ups, and screenings. These vital services aid in maintaining good health and identifying potential health issues early on, which can result in improved health outcomes and reduced healthcare expenses.
Financial Protection: Having health insurance offers financial protection from unanticipated medical expenses. Investing in health insurance early on can safeguard you from the burden of significant medical bills and the possibility of bankruptcy. "Investing early also allows individuals to select a policy with comprehensive coverage, including coverage for pre-existing conditions, which may not be covered by a policy purchased at a later age. In short, early investments in health insurance can save individuals money on premiums and provide comprehensive coverage and financial security in the face of unexpected medical bills," says Goyal.
Health insurance early in life is a valuable investment in your overall financial well-being. It enables you to obtain extensive coverage, save on premiums over time, and guard against unexpected medical expenses. In addition, you can also enhance your health outcomes by prioritizing health insurance at an early stage.
