The consequences of delaying health insurance: Why waiting can hurt you?

Health insurance is something that every Indian should buy, keeping in mind the growth in medical costs and an increase in diseases due to lifestyle changes, especially in younger people. As per the World Health Organization (WHO) statistics, 70% of Indians spend their entire income on healthcare related expenses and purchasing medicines. In addition to that, people had to borrow money or sell their assets to pay for 47% rural and 31% urban hospital admissions. Shockingly, WHO predicts that 3.2% of Indians are vulnerable to high out of pocket healthcare expenses and will fall below the poverty line.

Keeping these numbers in mind, it is hard to make a case against buying medical insurance. However, for a wide variety of reasons, a lot of people have a habit of procrastination when it comes to buying a health insurance policy.

One of the reasons for this behavior is that people often think they’ll buy insurance when they are older and when they would really need it. However, the real world doesn’t work that way and a lot of people have to endure high medical costs for their treatment which they wouldn’t have to if they were covered by a health insurance policy.

Age-triggered diseases

There are some diseases which do not become apparent until the person crosses a certain age. For example, conditions like ulcerative colitis are diagnosed mostly when the patients are in their mid-30s. Or take for example Autosomal Dominant Polycystic Kidney Disease (ADPKD), a congenital kidney disorder that rarely causes any noticeable issues in children but becomes apparent between 30 and 40 years of age.

If a person is not covered by insurance when age-triggered conditions or diseases strike, they become ineligible to buy medical insurance to cover the costs of even more dangerous diseases which can affect them later.

Procrastination leads to delay in buying a health policy and people keep considering the different options when it comes to choosing a policy. A lot of people think they’ll buy a policy at a certain age when they really need it. However, serious conditions like cancer can show up at any age and then the person has to pay a significant price for the medical costs out of their own pockets as they’ll not be eligible for medical insurance once they are diagnosed with such conditions.

Why buying a good health cover helps when you are young

Health insurance is much cheaper for young people as compared to old people and buying it when you are young allows you to purchase the policy at the lowest cost possible. These days, due to a lack of an active life, young people are more vulnerable to diseases such as cancer, stroke, and diseases which affect the heart and the lungs.

Modern insurance policies are also a lot more comprehensive and cover many things other than just serious hospitalization, such as day care procedures and out-patient treatments. Not just that, buying health insurance when you are young is also good financial planning as it helps to alleviate large premiums later down the years as you can enjoy benefits like loyalty points from your insurance company.

Young people often think they should pay a low premium and buy a small health cover which they plan to increase as they get older. However, this may never end up happening as they might face eligibility issues when they’re older or due to the onset of some unexpected disease or some accident.

Even though buying medical insurance at any age is a good idea, there are factors which one might consider when buying a policy in order to be cost-effective, especially if they are young. Examples of such factors include no-claim bonuses and restoration benefit.

No claim bonus

Most medical insurance policies include a no-claim bonus. No-claim bonus refers to the additional coverage an insurance policy provides (mostly around 5%-10% of sum insured) at no extra cost to the customer for every year the insured person doesn’t file a claim.

This way, the total coverage of the policy keeps expanding with every passing year where the policyholder makes no claims on their policy which can ultimately extend their coverage to twice the sum insured over the years without paying anything additional.

Restoration benefit

Many health insurance policies provide a clause called a restoration benefit. In the unlikely event of someone exhausting their entire coverage in a year on the treatment of a particular disease, the insurance company will restore or refill the amount insured if the person undergoes treatment for another disease in the same year, without charging anything additional to the customer.

Restoration benefit means that even though one might use up the entire sum insured because he/she has to undergo an expensive treatment, they can still benefit from the insurance policy if they have to undergo treatment for another serious diagnosis in the same year.

Conclusion

The importance of having a medical insurance policy at any age cannot be stressed enough. In a country where medical costs can literally bankrupt people and where diseases can spread rampantly and affect people from all walks of life, having a health insurance policy lets individuals have peace of mind that they would be covered in case any unexpected disease strikes them. Buying health policy at a young age should be a priority every individual must have to protect themselves from unforeseen and unplanned medical expenses.