Mumbai, India, August 2010. Pranav and Pooja are a happily married young couple in their early thirties. They live with their two year old son and Pranav’s parents in India. Pranav is highly qualified and works with a pharmaceutical company. The company provides a health insurance cover for the entire family. Pranav’s family is in good health except for his father who has regular medicines for high blood pressure.
One day, Pranav visited his chartered accountant to discuss various long term investment plans. During their discussion, the financial advisor suggested that he should meet an agent and buy a personal health insurance policy. He explained the various benefits of medical insurance policy. However,Pranav was not very convinced to buy a personal health insurance policy as he felt he was satisfied with the corporate insurance policy that covered his complete family. He argued that even if he changed his job, his new company would take care of the health insurance needs of his family. He felt it was worthless to block funds for something that he already possessed.
What do you think about Pranav’s approach? Should he consider the advice of his financial advisor?
Team Medimanage suggests:
Pranav should consider buying a personal health insurance policy, even if his immediate needs are covered by the company. It is important to think of long term benefits while buying a health insurance at an early age.
The advantages of buying a personal Health Insurance policy in early life are:
- Buying a medical cover in early life would ensure that the cover is comprehensive while he is employed and continues when he chooses to retire.
- Buying a personal Health Insurance policy when he is young and free from medical complications would be a cost efficient option. The premium would be lower and would offer comprehensive coverage in contrast to a policy purchased at later stage.
- As an individual ages, the cost of the cover increases and if he develops health issues, the health insurance company tends to exclude pre existing conditions which defeats the whole purpose of buying a health insurance.
- Most health insurance companies have an upper age limit for the policies, which means he would have limited options after his retirement.
- He can enjoy the benefits of cumulative bonus if he continuously renews the policy without any claims.
- The cherry on the cake is the health insurance tax benefit. The proposer of the policy can claim the premium paid as deduction from the total income u/s 80D of the Income Tax Act.
So, now you would agree that it is important for Pranav to buy a health insurance cover in his early life even when he is covered under the corporate plan. It is necessary to be futuristic and weigh all the future benefits that you can avail by buying a personal health insurance / mediclaim policy early in your life.