Buying health insurance is one of those rare win-win choices where you always benefit, whether you use it or not. If you need it, it’s a financial lifesaver; if you don’t, you can be comforted that it is there. You should hope you never need it, but you’ll be glad to have it if you do.
As published in Livemint, medical inflation in India is rising at an alarming rate of 14% (2023) compared to the inflation rate of 5.49% (September 2024). It shows that healthcare costs are rising faster than everyday expenses.
While peace of mind can’t be purchased, health insurance assures you have one less thing to worry about in an emergency.
So, when is the right time to buy health insurance? The answer is simple: today, but after proper research, at least on YouTube.
Should youth consider?
Health insurance is essential for everyone, but this article focuses on youngsters, especially those just beginning their careers or marriage.
Traditional marketing around it is generally focused on getting older people to enrol. But buying health insurance at a young age offers many benefits.
Premiums are much lower when you are younger. The policy gets easily accepted without any check-ups and with simple documentation. It covers lifestyle diseases that are becoming more common among younger people. You can buy a plan that suits your requirements. It allows you to complete waiting periods for pre-existing conditions early on, making it easier to claim later if required.
Most health plans provide free health check-ups and discounts on premiums for maintaining a fit lifestyle. It can help you take care of your well-being from an early age. For a young person, a sum insured of Rs 5-10 lakhs is usually enough to start with.
It can provide coverage for most medical emergencies while the premium remains affordable.
Many believe that they will buy the policy when necessary, but it simply doesn’t work that way. Health insurance companies assess risk, and having coverage for a longer duration reduces the likelihood of claims being rejected.
As per the regulator IRDAI, if you renew health insurance for 8 years, the insurer cannot reject claims except in cases of fraud or clearly stated policy exclusions.
Corporate & Govt plans
Relying solely on health insurance provided by your employer is not enough, since it is often tied to your job and you lose coverage if you change company. Government insurance schemes, such as the Deen Dayal Swasthya Seva Yojana (DDSSY) in Goa, can provide coverage at a minimal cost.
For example, families with three or fewer members can get coverage for just Rs 200 per year, while larger families pay Rs 300.
Since they are almost free, it is good to have either or both, but they have many limitations and are uncertain about the future. Therefore, it’s wise to purchase a personal health insurance policy that will remain with you forever.
How to Buy?
When choosing a plan, do your homework. Look at the claim settlement ratio, incurred claim ratio, and cashless network hospitals offered by the insurer. The higher the number, the better, as this indicates that the insurer is likely to honour claims. A 0% co-pay clause is preferable as the insurer will cover 100% of the claim amount.
No cap on room rent further adds to your flexibility. Also, consider the waiting period for pre-existing conditions; 24-36 months is normally reasonable.
If you are married, consider a floater plan, which covers multiple family members under a single policy. Such plans are more affordable and make it easy to add a spouse, parents or children.
The process of buying health insurance is relatively simple, but you must be honest when providing information.
Don’t hide any medical history or lifestyle habits like smoking or drinking, as this could lead to claim rejections later.
Once you buy, renewing it on time every year is important. If you miss it once, you will lose all advantages such as booster benefits or coverage for pre-existing conditions. Saving for emergencies may take long-term discipline, but health insurance offers instant protection.
Accidents are covered right away, while new illnesses are covered from the second month onwards.
Zerodha co-founder Nithin Kamath once famously said most Indians are just one hospitalisation away from bankruptcy. Empirical research backs Kamath’s statement that it is a global phenomenon.
If we apply Epictetus’ Dichotomy of Control logic to this, we can say that while we have control over the decision to buy insurance, we do not control when or if emergencies will occur.
[ The writer is an assistant professor and a former business journalist]
