6 Best Reasons for Millennials to Purchase Health Insurance
Millennials, also known as Generation Y, are living in a world that is vastly different from the world that the previous generation, the Generation X or ‘boomers’, grew up in. With everything around them – from food to property – getting more expensive than ever before, it has become extremely easy to overlook wise financial decisions that come to fruition years, or even decades, from now. Millennials, who are still young and hopeful of a fulfilling life, tend to forgo investing in a well-thought-out health insurance plan. Unlike their parents, who invested their hard-earned money into long term insurance plans, millennials choose to spend on things that provide short term gratification; like clothes, vacations, and gadgets.
Though there are more than just six reasons for a millennial to buy health insurance, let’s start with these first to convince you, a millennial, to buy a health insurance plan.
- Manage Your Rising Medical Costs
It’s no secret that medical and healthcare costs are rising all over the world. In India, medical inflation outpaces overall inflation; the figure in the healthcare space being as high as 15 per cent a year compared to the overall inflation of 6-7 per cent. For instance, India’s average retail inflation was below 4 per cent – 3.4 per cent in 2018-19 to be exact – while healthcare inflation was 7.14 per cent for 2018-19; a sharp increase from 4.39 per cent in the previous fiscal year.
Under such circumstances, it only makes sense to plan accordingly when it comes to managing medical costs. An unforeseeable expense, health insurance helps you in getting the best clinical treatment by taking care of the financial expenditure incurred during the process; both pre and post-hospitalization. Health insurance takes care of expenses incurred during daycare treatments, and even ambulance charges! As a result, you can concentrate on a speedy recovery rather than worrying about your expenses.
- Protect Your Savings
It has already been established that millennials are doing things very differently than the previous generations. Savings, too, falls in this category. According to the YouGov-Mint Millennial Survey, a millennial earning more than ₹75,000 per month saves more than 20 per cent of the salary. Those earning ₹30,000 and under, on the other hand, were able to save less than a tenth of their salary, according to the survey. Financially secure millennials with degrees like MBA, MD, and Ph.D. were saving more than the others. But, how do you protect your savings?
While there are multiple investment vehicles to utilize your savings in a proper manner, millennials should also look at health insurance as a measure to safeguard their savings. Having health insurance takes away worries associated with an unsure financial burden that may occur due to medical contingency. It also helps you focus on other monetary-based objectives like education, retirement, and recreational expenditures.
- Extra Protection Than Employer Cover
According to a study carried out by healthcare giant Cigna Corporation, about 82% of Indian millennials are stressed on account of work, health, and finance-related concerns while the one-in-two plan to fund their medical expenses in old age from their savings, followed by insurance. The report also states that Indian millennials are seeking much more than just high pay, flexibility, and designation from their employers. Millennials now want long-term financial security and health benefits.
But, even though corporations provide health coverage to employees, it’s wise to incorporate extended protection for yourself and your loved ones by purchasing external health insurance. Abstaining from investing in external health insurance because you’re covered by your employer is an unwise decision. Millennials should consider scenarios where they might have to switch jobs and, and a result, lose their health benefits. Having health insurance is a post-retirement necessity and, thus, it is advisable to have separate health insurance. The younger you invest in a health insurance policy, the better it would be for you.
- Plan Your Retirement
There’s a stark difference across generations when it comes to the reasons for saving. 57 per cent of pre-millennials, according to the YouGov-Mint Millennial Survey, save for retirement while only 40 per cent of millennials are doing the same. The survey also showed that millennials are much more likely to save for buying assets such as apartments and cars, or to purchase white goods and electronic gadgets, than any other age group. So, amidst all this, where does planning your retirement fit in?
In your post-retirement days, income inflow is usually on the lower side while the cost of well-being is on the higher side due to a steady increase in healthcare costs. Buying health insurance makes it certain that the cost of your well-being is secured leaving you free to spend on things you desire. There are various options under different health covers that provide lifelong renewability which, ultimately, depletes the weight of your medical expenses.
- Avail Tax Benefit
This, perhaps, is the most useful feature of purchasing health insurance; the tax benefits you can avail. Every individual can claim deduction under Section 80D by purchasing a health plan. The best part is that the deductions claimed are over and above section 80C/CCC/CCD. An individual, for instance, can claim a deduction of up to Rs 25,000 for the insurance. Also, payments made towards preventive health check-ups entitle the taxpayer to a deduction of up to Rs 5,000 which is within the overall limit. Since 2018, a deduction with regards to single premium health insurance policies has also been introduced. Hence, health insurance cover reduces the weight of additional expenses, such as income tax, on your pocket.
- Deal With Various Medical Conditions
The COVID-19 pandemic has made it clear that medical expenses are something none of us can guess or foresee. Walking into the hospital, even if you’re not ill, is heavy on your pocket at a time when the world is undergoing a pandemic. Not to mention rising mental health conditions and the proclivity of millennials to visit mental health professionals. Most recently, on 30 September 2019, IRDAI issued guidelines that barred the exclusion of “mental illnesses, stress or physiological disorders, behavioral and neurodevelopmental disorders” from health insurance plans. Under such circumstances, where people are dealing with various types of conditions, health insurance becomes mandatory; especially for millennials.
It is vital for millennials to understand that investment in health cover is definitely not a one-time bargain. Timely renewals are required to reap the benefits. Having a legitimate health cover helps you throughout your life, even after your retirement. Keep in mind that your age plays a vital role in determining the cost of the plan that you opt for. Therefore, start to invest in a health insurance plan as early as you can.