Health Insurance

When is the Right Time to Buy Health Insurance?


Reports suggest that most Indians still pay for medical expenses on their own. A medical insurance plan may not cover every medical expense. NITI Aayog reports that India has about 42 crore people who don’t have any such plan. Hence, most people still don’t have access to quality healthcare, which they either can’t afford or aren’t insured for.

In recent years, though, India has made a name for providing modern and affordable healthcare. However, medical costs are on the rise (medical inflation), which means you must buy a medical insurance plan at the right time and age to avoid spending a fortune from your savings during a health emergency. Continue reading to learn more about when it is the right time to buy a health insurance plan.

What is a Health Insurance Plan? 

A health insurance plan consists of policies that provide medical protection. It is a sort of contract between you and the insurer that binds the latter to pay for your treatment or surgery when you are ill or injured. It covers some or all of your healthcare costs. You have to pay a monthly or yearly premium to get insured. These plans work in two main ways: They either pay you the costs incurred as insurance or pay the doctor or hospital directly. 

Why Do You Need Medical Insurance Plans?

Covid-19 was an eye-opener for the whole world. It made people realise that an emergency never knocks on the door. Our general lifestyle has also changed a lot. Hectic work schedules, bad eating and sleeping habits, etc. are affecting health negatively. For instance, it would not be surprising to find young people who have heart-related problems. 

According to a report by Motilal Oswal Financial Services Limited (MOFSL), among other Asian economies, India witnessed the highest medical inflation rate of 14%. This is reflected in another finding by the same org: Prevailing High Demand for Health Insurance in FY2022. 

Hence, rising healthcare costs, coupled with a sedentary and stressful lifestyle means having a plan to rely on during times of medical emergency is critical. A medical insurance plan is your financial security against sudden health problems. Buying such a plan is an important aspect of financial planning and independence. 

What Does a Great Medical Insurance Policy Offer?

Your quest to know about the best medical insurance plans won’t end until you know what to expect from them. There are a ton of different medical insurance plans in the market, all designed to meet the unique needs of individuals, depending on age, sex and lifestyle.

Since all medical insurance policies don’t cover every aspect of a medical emergency, it is critical to choose plans that do cover the maximum possible area of expenses or at least those required by you.

Here are some of the basic features of a great health plan:

  1. The policy should cover hospital expenses. For individuals, a sum of five lacs is the minimum. Group policy amounts should be up to 20 lacs. 
  2. Pre and post-hospital admission charges must also be a part of it.  
  3. The policy must also provide cover for the treatment of mental illness.
  4. Choose a policy with no room-rent limit. It will ensure that you get the best possible room facility. 
  5. It should cover daycare procedures like surgery, dialysis, etc. 
  6. The policy must also provide for a cap on ICU room charges.
  7. No-claim bonus is another important feature. It helps if you didn’t claim insurance in a year. You will pay a lower premium next year, or the insurer might extend your coverage time. You might also get a higher cap depending on the vendor.
  8. Choose a plan that does not force a co-payment option. It means you will not have to pay part of the medical costs. The insurer will cover everything. This way, you need to only focus on recovery.
  9. Refill benefits must also be a part of the policy. It means that you can use your sum more than once a year. This is especially useful during pandemics like COVID-19. 
  10. Zone upgrade is another big benefit. You might be in Zone B or C city. The policy must provide an upgrade. This way, you can get treatment in a great hospital. 

When is the Right Time to Choose a Health Insurance Plan?

There is no fixed answer to this question. You can buy a medical insurance policy after turning 18 in India. Your family can include an underage person in a group policy. Senior citizens can also avail of medical insurance plans for themselves. However, the premium that you have to pay depends on your age—the lesser the age the lesser the premiums you pay. It also depends on your financial status. 

Hence, you can follow this piece of general advice: You should buy a medical insurance policy when you become financially stable. Most corporates provide such policies to young professionals. This practice is now a common part of corporate wellness programmes. 

The Benefits of Buying a Medical Insurance Plan Before You Turn 30 

Insurance providers cannot predict your risk of disease or illness. So, they use your age as the main factor to determine risk. Generally, you are at a higher risk in your 40s and 50s. So, in your 20s, you will pay a lower premium. If you are over 60, the premium is very high. It is almost four times that for a 25-year-old. The math is simple. 

Moreover, these policies also come with a 30-day waiting period. It means that you cannot claim until 30 days. It is more possible for a young adult to pass through this period without any potential complications.

Furthermore, if you are young, you do not need to undergo a medical test. Insurance providers do a test for older people. They do this to point out specific health conditions. The amount of your cover is then decided on that basis. 

You also get tax rebates under Section 80D of the Income Tax Act. This happens if you can show proof of a premium. If you are young, it will increase your savings. 

These policies also provide general healthcare check-ups every year. It is a crucial step in trying to live a healthy lifestyle. Regular checkups can help in the timely diagnosis of a severe problem. 

You must ensure that your policy includes a no-claim bonus. This is because, if you are young, you will not fall ill every year and can pay a lower premium next year. In some cases, you can also get a higher claim amount. 

Most young people are suffering from work-related stress. You can avail of therapy and medication using your healthcare policy. Most insurers provide coverage for this.