Every person should take health insurance. It gives financial security to the person in case of any medical need or hospitalization. There are many advantages of taking health insurance early in life. One of the biggest advantages of this is that it helps in building a track record. Let us know what are the benefits of taking health insurance early and at a young age.
Taking life or health insurance early in life is a good thing, because you will clearly see its financial benefits. The premium is less for the youth, especially in the health insurance policy, it will give an advantage. The reason behind this is that the youth are less likely to be ill or suffer from serious illness and hence the premium for them has also been kept low. Health insurance premium increases with age. That’s why it is better to take this insurance policy at a young age.
No lock in
Unlike a life insurance policy where the policyholder can lock in the premium for the entire term, this is not possible in the case of health insurance. So, a person who takes a life insurance policy at the age of 25 or 30 can lock in the premium for the entire duration of the policy term.
At the same time, a person taking health insurance cannot do this, because health insurance policies are not long-term policies. These are for one or two years, which means they have to be renewed after that. Renewal is possible and the policy can be continued, but the new premium will be based on the age at the time of renewal. This will also increase the premium of the policyholder. Because the age of the policyholder will also increase, even if there is no claim on the policy.
Better track record
Short-term renewal of health insurance policy may make you feel that there is no benefit in taking the policy at a young age. Because the premium will increase in the coming years. However, this is not the case. There can be two major advantages of taking a policy at a young age. First, the coverage available in this will give financial help to the person for any emergency medical treatment. The second will give benefits in the long run. Your track record will be built by taking the policy and creating a no-claim record.
There is also a waiting period for pre-existing diseases in the health insurance policy, which can last from two to four years. So after a certain period has passed, the insurance company cannot reject the claim for any reason. This can be a big relief as you will not have to worry about whether the claim will be approved or not.
No claim bonus
Apart from this, the policyholder can also get benefit in the form of no claim bonus. Insurance companies have their own guidelines regarding no-claim bonus. It is calculated as a fixed percentage of the Sum Assured every month. This keeps on adding every year till it reaches a certain figure like 50%. This increases the amount of health insurance coverage at the same premium.