Health Insurance. Shall I rush into it now itself?

POSTED BY SK ON August 19, 2012 8:10 am COMMENTS (8)

My details- self-40, spouse-38, children- 10 and 2 yr old.

My employer-provided health cover will stop after I retire. I will need individual Health Insurance Coverage for me and family only after retirement.

If I decide to buy the policy at the age of 60, I will be charged a  premium corresponding to the age-slab (which I know it will be higher than for a person of age 40).

However, if I buy a family Floater now, although I may start at a lower premium (as per the age-slab 36-44), yet by the time I turn 60, the premium would eventually increase to a figure appropriate for a person of age 60. If so, then what do I gain by starting early?

If I have to pay the same high premium at 60, irrespective of whetehr I started at 40 or at 60, then the very purpose of starting early is defeated. Whereas starting early in term life plans esnures that you pay a considerably lower premium throughout the life than the person who started late.

Plesae advsie me if I have any advantage (other than eliminating the risk of my company withdrawing cover, my leaving the job etc.etc..) in rushing-in and getting a cover now itself. (I am thinking strictly in terms of premium to be paid at the age 60).

Thanks for your time.

8 replies on this article “Health Insurance. Shall I rush into it now itself?”

  1. SK says:

    Thanks Ashal for your interest and time. I like the idea of creating a corpus for footing future premiums.

  2. SK says:

    Thanks Ashal. You have a point. By not buying now, I definitely run the risk of being ineligible for a cover at 60. However, the questions which dog me are-

    i) Will the insurer maintain the affordability of premium for me at the age of 60? Honouring the long-standing relationship of 20 yrs? Its good 20 years away and the insurer’s policies and health insurance business can undergo big changes in the period. Do not know whta will be the health-insurance senario then.

    So, will we end up being friends (and transacting premiums) in my good health and will they ‘Unfriend’ me in my sickness or old-age? (Its an yeraly contract they say. Don’t they?)

    (By Unfriending’, I mean increase in the premiums so much that it becomes unaffordanble for me at the age 60-plus- when I may need it most .)

    ii) Lack of guarantee about (future) premiums defeats the very purpose of insurance. Does it not? And the policy of loading of future premiums on account of past claims is something which adds to my belief that the insurers do friend you in your helath and ‘Unfriend’ in your sickness.

    Your valuabale opinion will be apprecitated.

    1. Dear SK, I do agree with the points raised by you. How to move ahead?

      Well first of all invest in your health itself – Health is wealth. Try to remain healthy.

      Next is to create a corpus for medical needs. Not a big corpus to pay for your medical needs but a corpus which can take care of future increased prem. of your health insurance.

      Hope it helps.

      Thanks

      Ashal

  3. Sachin says:

    Dear Ashal, Don’t think as I am arguing but Will 3-5L cover will be sufficient for a illness which can’t be included at later stage, I mean if someone got a illness which is not normal he has to work for the increase for this 3-5L and he might get the same issue with his existing policy too? I am asking this for my knowledge as I read somewhere it can also be the case with existing policy and they might not cover some illness which are not normal.

    1. Dear Sachin, we are discussing to educate each other, not arguing. 🙂

      Regarding the cover amount of 3-5L Rs. it’s a starting cover & based upon your actual needs, you may go for increase later on.

      Thanks

      ashal

  4. Sachin says:

    I also have the same question, I work for a good company and my company provided cover is good enough for me and my family, I am also in the same situation that should I start my personnel health insurance now or 2-3 years before retirement, that way I could get the pre existing deceases also covered. also I more question which I got this post, I was in a impression that if I buy a health insurance your premium will be fixed for entire life, same as term insurance, but I think this is not the case. Please confirm. and if premium is not fixed then I don’t think it makes more sense to buy this at early stage. please suggest.

    1. Dear Sachin, do you want to continue with the risk of health on you? What ‘ll happen if in between you are diagnosed with a typical illness that ‘ll remain excluded from health plan.

      Do you really feel, paying 5-8K Prem. for a 3-5L Rs. health plan is a sheer waste of money? Please confirm.

      Thanks

      ashal

  5. Dear SK, what about your the then pre-existing deceases which ‘ll not be covered @ age 60 for next 3-4 years? Please do not look for the prem. in isolation. Please check the whole picture.

    Thanks

    Ashal

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