A Millennial's Guide to Health Insurance

The millennials are often criticised for their lifestyle, where they prioritise spending over saving for the future. It is also a general notion that millennials ignore buying insurance cover. However, a recent survey by one of the leading insurance companies in India suggests that a large portion of the millennials are aware of the importance of a robust health insurance policy and actively invest in it.

Modern youngsters understand the need for having financial backup during a medical emergency. With the COVID-19 pandemic, the youngsters have realised the need for a health insurance policy to cover the medical costs. Although many youngsters are willing to purchase a health insurance policy, most find it challenging to choose the right policy. They have no idea about the critical factors to consider.

So, to help the millennials get the best health cover, we list down a few vital tips.

• Know about the different types of plans

There are different types of health insurance plans. There are plans that not only cover the hospitalisation expenses but also help you avail of comprehensive coverage. Apart from the basic plans, you can also purchase critical illness plans specially meant to cover the treatment cost of life-threatening illnesses like cancer, etc.

Since 2020, with the COVID-19 pandemic, insurance companies offer COVID-19 specific health insurance plans to cover the treatment cost if you are infected by the virus. Knowing about the different types of health insurance plans available in the market will help you choose the right policy to suit your specific needs.

• Be aware of the sub-limits and deductibles

Many health insurance policies come with sub-limits and deductibles, which reduce your coverage. Make sure that you read the policy terms carefully to identify such limits and avoid buying such plans as you must pay a portion of the expenses from your pocket that are beyond the policy limits.

There may be limits on the room rent, ICU charges, ambulance cost, domiciliary treatment, etc.

• Choose riders to expand coverage

All health insurance companies offer a wide range of riders or add-ons to help you expand your coverage. You can pick any number of riders you want by paying an additional premium. Some of the popular riders include critical illness riders, accidental death riders, maternity cover, etc.

Riders allow you to get coverage against specific risks that are not covered under your regular health insurance policy. Choose the riders carefully and get additional coverage.

• Buy separate insurance for your parents

If you are buying a health insurance policy for you, your spouse, children, and your old-aged parents, it is better to purchase a different policy for your parents. There are two benefits of it.

1. Since your parents would be the eldest members, the insurance company will calculate the premium based on their age. This would increase the overall insurance cost.

2. If they have any illness and make frequent claims, you may not be able to accumulate NCB (no-claim bonus).

• Take advantage of the tax benefits

Apart from covering medical costs, health insurance is an excellent tax-saving instrument. You can avail of tax benefits up to Rs. 25,000 on the premium paid for the policy under Section 80D of the Indian Income Tax Act.

If you have purchased a policy for your senior citizen parents (aged more than 60), you can get an additional tax benefit of Rs. 25,000 in a financial year. Thus, with health insurance, you can reduce your annual tax liability by up to Rs. 50,000.

Final Word

Before you purchase a health insurance policy, take your time to understand the basics of health insurance and buy a suitable policy. You may be young and healthy now, but medical emergencies can occur at any time, and a health insurance policy helps you be prepared for such unexpected situations.