What is the Right Age to Buy Health Insurance Policy?

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. 

Know more about:

• Individual Health Insurance
• Family Health Insurance

Your mid-twenties is the best time to opt for medical insurance policies. At this age, you are just starting out with your career, without any intense financial pressure.

You are still some ways off from settling down and availing a policy will not interfere with your financial goals in any way.

If you buy the policy at such a life stage, you can avail almost all of the benefits mentioned above. Moreover, affordable plans will encourage you to choose policies offering the best financial protection during medical emergencies.

Other advantages that make this the right age to buy health insurance are as follows:

• Lifetime renewal facility available for younger policyholders, along with extended coverage.
• In your twenties, you are still at risk of suffering from accidental injuries and illnesses. Therefore, such a policy also acts as a backup plan to deal with such emergency needs.

Further, if you are getting married in your mid-twenties, it is also better to start planning for your future right from the onset. If you want to start a family in the upcoming three-four years, it is best if you avail a maternity cover add-on with your health insurance plan.

That way, you can avail the benefits of the add-on after the completion of two years waiting period, when you decide to have a child. That way, you can tackle the substantial costs associated with childbirth.

The thirties is generally the age when people decide to settle down and start a family. Apart from looking out for yourself, you need to offer the same financial protection for your wife and child.

If you availed a standard insurance plan before, it no longer provides sufficient coverage for the rest of the members in your family.

According to a study reported in The Economic Times, the biggest claims raised by individuals belonging to the age group of 36 to 45 years are for:

• Injury, poisoning, external causes
• Diseases of eye and adnexa
• Pregnancy, childbirth, and related causes
• Diseases of the digestive system

Therefore, you need policies that extend the same coverage to your wife and children as well.

At this juncture of your life, some of the additional benefits you can avail from your health insurance policy include:

• Add-on covers to protect against heart or cardiac ailments that are known to develop during this stage of your life.
• If you want a single policy to offer financial assistance for all family members, you can opt for a family floater health insurance plan. Keep in mind that all members of the family share the sum insured in such a case.
• By this age, you are likely financially secured. Therefore, you can pick policies with advanced features even though they may be slightly pricier.

In some cases, you and your family may be covered under your employer’s health insurance plan, if you are a salaried employee.

Even so, consider whether such employer sanctioned insurance offers sufficient protection to you and your family. If it does not, avail additional plans.

This is the age when your financial responsibility is at its highest. Moreover, you are more likely to be afflicted with some diseases, such as hypertension, diabetes, heart disease or others.

At such a point in your life, even a standard health insurance policy may be quite costly and difficult to afford.

Therefore, at this juncture, it may be better to avail a family floater policy than an individual cover. At any rate, look for the following features in your policies at this age.

• Critical illness benefits where you can avail a higher sum insured for seeking treatment for critical illnesses.
• Restoration or refill of the sum insured if you manage to exhaust the same through previous claims.
• Bariatric surgery benefits where one needs to undergo surgery to alleviate organ issues due to obesity.
• Psychiatric treatment benefits where you have to be hospitalized for seeking psychiatric treatment due to trauma.
• Zone upgrade facility for the policy is important for those residing in Zone B and Zone C areas. It can help you save a part of your premium payment, and if you choose to avail treatment from a Zone A or Zone B city, you can do so by paying a marginally higher premium.

Moreover, this is the ideal time to plan for post-retirement savings. With attractive income tax deductions available on your health insurance premiums, you can easily save money to enjoy a secure life after retirement.

Health insurance is extremely important at this point of your life since you are more likely to suffer from severe ailments, requiring immediate hospitalization and treatment. However, most insurance policies will come bearing a substantial premium rate as well.

Rather than opting for a typical policy, choose special senior citizen health insurance plans on offer from insurance companies. These unique policies provide the following advantages.

• AYUSH treatment cover, including alternative forms of therapy, such as Unani, Ayurveda, Yoga, Homoeopathy and more.
• Domiciliary care benefits for policyholders seeking treatment at home, under the recommendation of their doctor.
• Any expense incurred in due course of organ donation.
• Higher sum insured.
• Cover for hospitalization, arising due to psychological illnesses.
• Income tax benefits of up to Rs. 50,000 under the Income Tax Act 1961.

As you can see, health insurance policies have something to offer to you, regardless of your age. However, if the question is when is the right age to buy a health insurance policy?

The answer is always “as soon as you can”. Choosing to do so will only benefit you without causing any harm to your financial condition.