Why Buy Health Insurance When Young?

 - Sakshi Post

Financial planning trends among Generation ‘Z’, and why purchasing insurance is a need!

Gen Z and millennials are outpacing the older generations in almost all aspects when it comes to ensuring safety and secured future. They have a more optimistic approach about the pandemic causing a beneficial shift in people's health priorities. As a result, they will be better prepared to deal with future epidemics.

Financial planning and insurance have also improved and evolved as a result of the present generation's changing perspective. Everything is better and easier since Gen Z is solely concerned with the ease of preparation and execution. Because, let's face it, no one likes waiting in long lines or dealing with mountains of paperwork.

While today's youth prioritize saving, they approach it differently than earlier generations. It is critical to protect both one's health and one's financial well-being. As a result, health insurance protects a person's health while simultaneously allowing them to save money and earn guaranteed returns. As one navigates life's numerous obstacles, health insurance is critical for financial security. It applies to people of all ages, including children.

 Why Financial Planning is important for Gen Z?

Gen Z are considered as the next set of policyholders for insurance companies, a generation who takes life one step at a time and practices living in moment. Their life goals are different than their parents as they seek quick results and better returns. The generation is changing the way industries functions across sectors. 

Unlike the previous generations, Gen Z is more aware of their expenditure, and moreover their savings. Financial planning is an aspect that majority of the Gen Z practice for a secured future. One of the ways of having a secured financial future is opting of health insurance.

Why buy health insurance when young?

Health insurance policy is a beneficial investment for all ages. It is always advisable to opt for a policy at an early stage to get various advantages.

Possibility of lower premiums

Premiums are charged considering the current age of the policyholder, hence opting for a policy at an early age can help Gen Z avail lower premium benefit.

Pass the waiting period 

Health insurance policies have the concept of a waiting period, during which the policyholder is restricted and cannot make claims for specific pre-existing diseases, procedures, and treatments. Every policy has a different waiting period ranging from two to four years typically. When a person buys health insurance in their 20s, it becomes easier for them to pass through the waiting period without it becoming a concern. This indicates that in future in case of any claim, they would have passed the waiting period already. 

Avail No Claim Bonus 

In the absence of any claims in the preceding year of a policy term, most insurance companies provide a no claims bonus (NCB). The policyholder can get a cumulative bonus if they get a health insurance policy when they are young because they will most likely renew it every year. As a result, the bonus accumulated increases your coverage amount which is an advantage for later stages in life. It can be either a discount on their premium for the next policy period or an increase in the policy cover without increasing the premium

Tax Benefit 

Purchasing a health coverage at an early age allows a person to take advantage of tax benefits for a longer time as it can deduct the premium paid from the total income under Section 80D of the Income Tax Act of 1961.

What to look out for when buying health insurance?

In addition to the policy cover and premium amount, here are some things to look out for when one is purchasing a health insurance policy:

Exclusions under the policy

A list of standard exclusions is included in every health insurance policy and this can be referred to in the wordings document. Before making a purchase decision, it is critical to read and comprehend them.

Credibility of the brand

The credibility of the brand plays a crucial role in insurance and before purchasing a policy it is essential to trust the brand.

The benefits included

When purchasing a health insurance coverage, certain crucial features to look for include cashless claims, a large network of hospitals, etc. are things to look for when buying a health insurance policy. 

Source Report: Deloitte 

-Article Authored by Shreeraj Deshpande, Head – Health Businesses, SBI General Insurance

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