According to NITI Aayog, India has about 42 crore people that are devoid of any Health Insurance. After being introduced in 1986 in India, as of Sep 2020, merely 5% of the Indian population hold retail Health Insurance. With the rise in medical inflation and awareness, the need for Health Insurance is also rising exponentially. With the increase in demand comes an increase in confusion. Are you too perplexed about the right time to buy Health Insurance? Don’t worry, all your doubts would be cleared by the end of this article.
When is the right time to buy Health Insurance?
There is no fixed or magical number to this question. It is advisable to buy Health Insurance at a young age as soon as you have a stable income. This is because the human mortality rate is much lower at a younger age and hence the cost of your insurance would be lower.
To understand this better, let us look at an illustration of Mr. Yadav
| Age (Years) | Comorbidities | Cover (₹) | Avg Annual Premium (₹) |
| 25 | None | 5 Lakhs | 6,500 |
| 35 | None | 5 Lakhs | 7,200 |
| 50 | None* | 5 Lakhs | 15,300 |
*Considering 0 comorbidities even at the age of 50 for easy calculations and better understanding
Merits of Buying a Health Insurance at an early age:
- The cost of insurance is low.
- The chances of getting coverage for all diseases are significantly higher.
- Exhaustive benefits from the accumulated No Claim Bonuses.
- The chances of rejection are almost nil.
- Low chances of loading of premium.
- The elapsed waiting period gives the financial security against age-prone diseases.
- Tax rebates under Section 80D of Income Tax Act.
- Financial freedom
How much cover is sufficient?
There is a general rule of thumb to buying an adequate Health Insurance cover-
For a single person at a young age:
A minimum cover of ₹3 Lakhs is advisable which can be increased with the increasing age.
For a standard family of 2 Adults & 2 Children:
A minimum cover of ₹7-10 Lakhs is advisable or 50% of your annual income.
For a standard family with old parents:
It is advisable to purchase two separate policies, one for your parents and the other, for yourself (including spouse and children). This is because the mortality rate increases with the increase in age and the chances of exhaustion of the sum insured become high.
I hope we have cleared all your doubts. So as they say, ‘It’s never too late to buy Health Insurance’, get yours now! Our trained and certified advisors will help you select the best health insurance plan.
