Wealth Protection is an area often neglected in lieu of
Wealth Creation. Without an iota of doubt, Wealth Creation by doing smart
investments is definitely important. But what use is it if there is an imminent
risk of losing all that you created over your life time - in a span of, say, a
few months?
Health Insurance is one such aspect of Wealth Protection -
where most of us feel that either we are already protected enough by our
company group insurance policy, or God will always be too kind on us and
nothing is going to happen to us while we are in our prime age. Can we be
further away from truth? And all of us see and hear enough examples around us
everyday, which contradict this basic assumption of ours. Just closing our eyes
is not going to make the risk vanish. A smart wealth creator, like a smart project
manager, manages the risk of health by 'adequately' covering this risk
associated with it. Cover your risk before it is too late.
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Hope for the best, but prepare for the worst - that is how
we used to plan our projects. that is how exactly you ought to deal with your
life. I sincerely hope you lead a healthy and prosperous life, but I earnestly
urge you to be prepared in case of any such eventuality -for it is a definitely
reality in our so called developed world.
Here are 8 strong reasons you must buy your own health
insurance policy at the earliest, irrespective of your age or your existing
cover:
1) Avoid stringent tests
If you think, you will save some money and take a health
insurance cover only when you cross the age of 50, then please be aware that
after 50, almost all health insurance companies subject buyers to a slew of
medical tests before selling them a health plan. And once you undergo a battery
of tests at that age, it is quite likely that you will be discovered with some
minor, if not severe, anomaly. Each such anomaly is going to load your premium,
apart from the physical pain of undergoing all the tests. You can avoid all
these tests if you buy your health insurance policy earlier. Any pre-existing
diseases are automatically covered in such a case. Any diseases diagnosed later
will be covered - without any additional premiums.
2) Pay lower premium
Health insurance premiums are quite low when the age is
less. The lower the age group, the lower the premium. And premiums go up only
if you move across age groups. At 25, a plan with Rs 5 lakh coverage would cost
you around Rs 8000, at 35 you'll have to shell out around Rs 11000 and at 45
the cost rises to Rs 18000. So buy it as early as possible to book the policy
at the lowest possible premium.
3) Accumulate no-claim benefits
Even if you remain healthy - which we should all hope for -
with every such no-claim year, the extent of your medical cover increases.
Buying early means you are likely to have more no-claim years, allowing you to
accumulate the benefits over time.
4) Get access to cheaper and hassle free online buying
At a young age, you can buy a decent enough health insurance
policy online. The online policies are cheaper. Many insurers are not willing
to sell online if the buyer is above 50. You will not be able to avail of the
ease of online purchase if you wait too long.
5) Your employer cover is just not sufficient
With exponential increase in healthcare costs, the need for
health insurance cannot be overstated. Check the cost of a week's hospitalized
for a regular illness and then compare it with your company's coverage. Most
likely you'll be persuaded to buy a cover immediately. Still not sure? Think
about when you grow older and might need more frequent medical attention. What
about if you are asked to leave the company - a harsh reality today? What about
the period in between two jobs? You ought to cover all these risks to protect
your portfolio.
6) Avail Sec 80D Tax benefits over and above Sec 80C
benefits
Buying your health insurance early also means better
financial planning. You save tax for paying the premium. Under section 80D, you
can potentially save taxes upto Rs.40,000 annually. If you take these tax
benefits into account, the cost of a health insurance policy is not prohibitive
considering the protection you enjoy.
7) Overcome the Waiting Period
When I quit IBM and took financial freedom, I bought a
private health insurance policy - just to realise that I have to undergo a
waiting period of 2 years for specific treatments. And, as fate would have it,
my wife had to be operated for one such disease during this 2 year period. Who
paid? I did. Do not do the same mistake that I did. Do not wait to buy a health
insurance policy till it becomes a definite necessity.
When you buy a health plan, you have to serve several
waiting periods-for certain surgeries, special treatments, pre-existing illness
coverage, etc. If you buy it now, when do not need it immediately, it would
mean you would have served the requisite waiting periods and be able to claim
all full benefits later.
8) Cover your 'to be born'
Today's health insurance policies covers much more than just
hospitalization. New health plans cover you for day care procedures and OPD,
not just serious hospitalization. Even vector borne diseases are covered. Most
plans also have maternity benefits, which may be relevant at this stage of
life. Also, your new born will be covered from birth without any additional
premiums.
As with wealth creation, taking action early works with
wealth protection too.