4 min read

Financial Planning: Why Should You Buy Health Insurance As Soon As You Get Your First Job?

Get smarter, and enjoy a bouquet of benefits on purchasing health insurance early in life

For those who are ready to take control of their present and future financial and healthcare situation, getting a solid health insurance plan, life insurance, or term-life insurance could be helpful. A good financial and healthcare plan enables you to realise your future goals and chart out a comprehensive insurance plan.

Having said that, it’s not sufficient to just know that you need a healthcare plan. It’s critical to buy one as soon as you become financially independent or even land your first job. Here’s why…

If a 30-year-old individual and a 40-year-old individual were to buy the exact same retail health insurance policy, their insurance premiums wouldn’t look similar. That’s because insurance companies follow one simple rule – “The greater the risk, the greater the premium!”

Different premiums paid by people at different ages of their life are interlinked with the risk associated with age, lifestyle, and several other healthcare-related exposures. For instance, a health insurance policy with a sum-insured of Rs 10 lakh would have an average premium of Rs 5,000/- per year, if you are around 30 years old at the time of purchasing the plan. However, the same health insurance policy premium will cost anywhere between Rs 8,000/- to Rs 10,000/- for a 40+ year old individual, and far higher if the person seeking insurance has existing conditions or co-morbidities. Thus, it is highly recommended to opt for a health insurance plan as soon as you start your first job. This enables you to gain coverage at a younger age and enjoy affordable premium rates with maximum benefits.

Buying health insurance early means better financial planning

Without health insurance coverage, a serious accident or a health issue that results in emergency care or an expensive treatment plan can result in a poor credit score, severe debt or even bankruptcy.

What is the right age to buy health insurance?

Young policyholders are less likely to suffer from health issues and are less likely to seek any medical help. The right age to buy a health insurance policy is in your mid-twenties and early thirties. At this age, you are most likely be in your best health and will be free of any major financial responsibilities of your family. People in their twenties and thirties are also known to have fewer diagnosed and undiagnosed conditions than older people, and so, most young people have to pay substantially lower premiums.

The top 5 reasons why you should sign up for health insurance as soon as you get your first job, include –

  • You get access to emergency services such as hospitalisation, surgery, and ambulance services
  • Pregnancy, maternity, and newborn care are covered under health insurance policies
  • Mental health and substance use disorders can be taken of
  • Prescription drugs can be reimbursed under health insurance policies
  • You can avail lab services for pre and post hospitalisations, among other conditions

While the above services can be availed through your health insurance policy at any given point of time in your life, there are additional benefits to getting health insurance as soon as you have you your first job.

Additional benefits on getting health insurance early in life:

Get tax benefits: You can claim a deduction for the health insurance premium and expense incurred towards preventive health checkups for yourself, your spouse, dependent children and parents. Section 80D of the Income Tax Act, 1961, allows individuals and Hindu Undivided Family (HUF) to avail health insurance tax benefits on the premium paid. If your annual income is eligible for tax liability, you can buy a health insurance plan and claim tax deductions for the premium you pay.

Enjoy lower premiums: If you buy a health insurance plan at an early age, you can get a much higher cover at a low premium. Generally, health insurance companies impose exclusions for all the diseases you've suffered from or diseases that are prone to occur in future to keep the risk rate low. For instance, people suffering from diabetes, asthma, blood pressure conditions, are likely to pay much higher premiums.

Lifestyle changes: Youth-related incidences of diseases are rising. People in their twenties are seeing rising cases of diabetes, hypertension, obesity, and heart ailments, among others. So, it’s a myth that diseases won’t strike you because you are young and healthy. People in their twenties are now at an equal chance of contracting any ailment because of their current lifestyle.

Your lifestyle choices have a significant impact on your insurance premium prices. Insurers reward consumers who live a healthy lifestyle with lower premiums, and even ensure added benefits for staying healthy. People suffering from eating disorders, obesity or other lifestyle-related disorders are more likely to become ill. This is reflected in the cost of the health insurance coverage they purchase. It is essential to avoid excessive consumption of alcohol or other substances that are likely to raise medical risks. Insurance companies across the world pay keen attention to lifestyle and career choices when an individual applies for health insurance. Thus, positive lifestyle changes can not only help you live a better life, but they can also help you save money and keep yourself secured.

To know more about purchasing health insurance, opting for super top-ups, added parental coverage or term life coverage from Nova Benefits, you can schedule a call here.

No waiting period: If you suffer from any condition, infection or ailment at the time of buying your health insurance policy, any complication arising out of that condition is not covered within the first few years of your insurance policy. This is called a waiting period, and every plan has one. If you are young at the time of purchase, there is a tiny probability that you suffer from a pre-existing ailment. You can easily sail through the waiting period in your early years, and be prepared for when the chances of any medical contingency arrive.

High inflation: Medical costs are sky-rocketing. A rise in diseases is associated with rising costs and solutions to treating such diseases. The high cost of treatments and medicines demand a healthcare policy that would meet such expenditures whenever a medical emergency comes knocking. Since you have just landed your first job or are still establishing long-term career goals for yourself, you wouldn’t be in the position to shell out a whole lot of money for medical emergencies. In such times of need, a solid health insurance plan can be your go-to solution.

Financial planning goes a long way!

Irrespective of how sound your financial plan is, getting treated for a major disease or disorder can cause a major dent in your savings. On the other hand, landing your first job is a magical moment. You are now financially independent (well, almost?), and able to shoulder financial responsibilities alongside other working members of your family. Your first salary also holds sentimental value. So, how about ensuring the health and safety of your family and all of your finances with a well-planned health insurance policy? A gift to yourself – one that will stay by your side for life.

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