Why Buying Health Insurance Early in Life is a Smart Financial Move
If the world had to pick the worst year in the past decade, we’d most probably and collectively pick 2020. Riddled with deaths and health crises thanks to a pandemic, 2020 claimed countless lives. In many ways, that fateful year also became a teacher who taught us that we should not take our loved ones’ health, or indeed their lives, for granted. It emphasised the importance of investing in health insurance and doing so early in life. So, let’s take a look at the different types of health insurance plans you should get when you are young. But before that, let’s find out what health insurance entails.
As you age, you may take various investment decisions to grow your wealth. But a single medical condition can drain away all the wealth and savings accumulated over the years. The ever-rising hospital costs, surgeons’ fees, medical procedures, etc., can empty your bank accounts. Health insurance is the only solution that can prevent you from losing your life-long savings.
When you have health insurance, your insurer pays for most of your medical costs, up to an amount called a sum insured. Insurance enables you to concentrate on getting the necessary treatment while the insurer picks up the bill. To provide you with his coverage, the insurer charges an annual premium.
Let us now look at the types of health plans you need in your life and the benefits of investing early.
Did You Know: Buying Insurance in your 20s allows you to ride out the waiting period easily.
While the underlying concept of Health Insurance is essentially the same, health insurance policies can be of different types, designed to fulfil different objectives. Here’s a breakdown of the different types of health plans and when you should ideally buy them.
Policy Type
Coverage Terms
When to Buy
Individual Policies
Covers only one individual
In Your 20s, 30s or 40s
Family Floater Plan
Covers 4/6 members of a single family unit under one plan
Upon getting married, 20s or 30s
Critical Illness Policy
Covers the high costs of specific critical illnesses like cancer, heart disease, etc.
In your 30s, to ride out the high waiting period
Top-Up Plans
Enhancing your base policy’s sum insured
At any age, when you buy a health plan with a low sum insured
Group Health Plan
Medical costs of employees and their kin
Not Applicable as provided by the employer
Maternity Plan
Pregnancy, delivery and post-natal care-related costs
Personal Accident Plans
Costs of accident-related ramifications like loss of employment, limbs, or death
In your 20s, 30s or 40s
As the word individual suggests, such a plan covers only one person. The benefits or sum insured of this policy cannot be transferred to anyone else, including your immediate family members.
This type of health insurance plan covers 4 to 6 members of the same immediate family unit under one plan. The covered members must share the sum insured amount among themselves.
The cost of treating illnesses like cancer, heart disease, kidney ailments, etc., tends to be high. With a Critical illness cover, you can easily manage the costs of such illnesses due to the high sum insured.
If your base policy has a lower sum insured and you want to enhance it, you can go for a top-up health plan. Top-up plans are typically inexpensive and fairly easy to obtain.
If you’re employed with a good company, you may be covered under a group health insurance plan. But you must not rely on it alone, as your coverage expires the moment you quit your job.
Maternity plans are available as both standalone plans and add-on riders. This type of health insurance plan is ideal for couples planning to expand their family in the next 2-4 years.
This type of health plan protects you and your loved ones financially if an accident causes injuries or disabilities impacting your ability to financially provide for your family, or worse, leads to your death.
Did You Know? Your age, occupation, body mass index, policy type, and past medical history are some factors that influence the premium you pay when you buy health insurance.
If we’ve said it once, we’ve said it a thousand times – you must buy health insurance when you are young to reap its benefits when you are old. The trouble is that most people believe that they will need insurance only later on in life, when they are older and more likely to fall ill. While you may not need to encash your insurance policy until you are older, it does not mean you should wait until then to ensure your health.
So, let’s look at the many reasons why you should buy insurance in your 20s, 30s and 40s and why your age matters when it comes to buying insurance.
Factor
Buying in Your 20s
Buying in Your 30s
Buying in Your 40s
Premium costs
At the lowest
Slightly high, but not very high
Considerably high
Lifestyle affecting health conditions
At your healthiest due to fewer responsibilities
A little less healthy due to increased responsibilities
Health starts deteriorating due to responsibilities & other factors
Waiting period
Very easy to ride out the waiting period
Still easy to ride out the waiting period
It may be tough to ride out the waiting period
Chances of filing claims
Very low chances of filing claims due to good health
Chances of filing claims may increase with age
Chances of filing claims multiply with increasing age
No claims bonus to enhance the sum insured
High with a chance of getting the full no-claims bonus benefit
If no claims are filed, you may be eligible for partial or entire NCB Benefits
Reduced chances of getting the full no-claims bonus benefit
Pre-medical check-up
Insurers usually don’t ask for this
Insurers may or may not ask for this
Insurers generally ask for this
Application approval/ rejection
Insurers generally approve your application easily
Insurers may approve or reject your application
Your application for insurance may be rejected due to age
Let us now expand on the above points to understand them in a little more detail:
When you’re younger, you are typically healthy and less likely to file health insurance claims. But as you age, your chances of filing claims increase. This is why insurers charge lower premiums when you buy health plans in your 20s, slightly more in your 30s, and levy higher charges for insurance in your 40s.
Your 20s are your time to live your best life. But as you age, your responsibilities increase, which may lead to the onset of medical conditions. By your 30s, you may start experiencing stress, which can lead to more severe health conditions in your 40s. To cover these costs, you must buy insurance soon.
All types of health insurance plans come with a waiting period during which you cannot file any claims. Buying insurance in your 20s allows you to smoothly ride out the waiting period. But in your late 30s or your early 40s, you may need to file claims, so you must get insured early to ride it out quickly.
As we’ve already established, your chances of filing claims increase as you age. Diseases like diabetes, high blood pressure, etc., become common as you age, and getting insurance once you have these illnesses can be both difficult and expensive. This is why it is best not to wait till you're older to buy health plans.
With the no-claims bonus benefit, insurers increase your sum insured amount by almost 50% without charging higher premiums. But to get this reward, you must not file any claims for up to 5 years. You can easily accrue this benefit if you buy insurance as a young, healthy person in your 20s or early 30s.
One of the greatest advantages of buying health insurance when you are young is that insurers do not ask you to undergo any medical tests, especially if you do not have any history of illnesses. However, if you buy policies later in life, you may need to comply with this requirement from your insurer.
Since insurance involves significant compensation amounts, insurers may be picky while considering your application. Your best bet is to buy insurance when you are in your 20s or 30s to enhance your chances of being approved. Once you cross your 40s, insurers may reject your application.
Health insurance is very important in financial planning.The earlier you begin, the better the benefits you are unlocking- low premiums, better coverage and higher probabilities of passing an approval without medical examinations.When incorporated intelligently in your financial planning, health insurance is no longer a safety net but a source of financial stability and development.
The best reason to purchase health insurance early is to protect your hard-earned savings.A small medical operation can have a price tag of several lakhs because of increased treatment, diagnostic and hospital bills.
You are 20s or early 30s and probably are making a financial footprint- saving to buy a house, to start a business, to invest in retirement, or to think about what you want to achieve in the future.These goals may be interrupted by a sudden medical emergency that will cause you to:
Early purchase of health insurance will not cripple your financial plans in the event of an emergency situation.
Another advantage is the coverage you receive. At a younger age, you generally have:
This implies that your policy will act as a powerful barrier to medical inflation during your lifetime.
One of the biggest financial benefits of purchasing health insurance at a young age is the tax exemption that one obtains under Section 80D of the Income Tax Act.Premiums paid on health insurance are deductible up to:
Starting early means you enjoy these tax benefits for many more years, allowing you to save more while also protecting yourself.
Among young people in their first year of work or of an initial career, these tax savings add up to significant annual financial resources by assisting you:
Over time, these consistent annual tax savings accumulate into significant financial gains.
The compounding benefit of No-Claim Bonus(NCB) is one of the biggest benefits of purchasing health insurance at an early age.Each year that you do not claim, insurers give you an NCB, which is usually increased by 10-50 per cent every year, according to the policy.
Starting early maximises this benefit:
The younger you are when you buy insurance, the more years you accumulate the NCB, making your health cover significantly more valuable over time.
This compounded increase in coverage becomes extremely useful later in life when:
By then, you’re already holding a high-value policy at a relatively low premium.
Despite the benefits, many young adults delay buying health insurance due to misconceptions. Let’s debunk the most common myths.
This is one of the biggest misconceptions. While youth generally brings good health, it doesn’t eliminate risk. Today’s lifestyle trends- irregular sleep, long working hours, sedentary jobs, pollution, and stress- are making young individuals more prone to:
Many of these conditions, once diagnosed, are considered pre-existing, increasing premiums and waiting periods later.
Health insurance purchased early acts as future-proofing. Even if a condition develops later, your existing policy continues to cover you without extra loading or medical tests.
Employer-provided insurance may seem convenient, but it often comes with limitations:
A personal health insurance policy ensures uninterrupted protection even if you:
Your personal policy is your lifelong health cover- comprehensive, customisable, and independent of employment status.
Technically, yes- you can buy a policy at any age. But the later you buy, the higher the challenges:
Buying early lets you lock in low premiums permanently and enjoy smoother approval with fewer restrictions.
Buying health insurance early in life is more than a protective step- it’s a strategic financial decision. It ensures that as you grow, your health cover grows with you. Lower premiums, wider coverage, uninterrupted financial protection, tax benefits, and compounding NCBs make early purchase a smart move.
By starting young, you secure lifelong protection at minimal cost while safeguarding your financial future. With rising healthcare expenses, the best time to buy health insurance is not later- it’s right now.
The best age is as early as possible- ideally in your early 20s or early 30s. This ensures lower premiums, fewer medical checks, and better coverage eligibility.
Because you enjoy lower premiums, complete waiting period coverage early, accumulate No-Claim Bonuses, and secure protection before lifestyle diseases start appearing.
Yes. You can enhance coverage with top-up plans, super top-ups, or by upgrading your base policy. However, younger upgrades are easier and cheaper.
Absolutely. If you buy early- before any major diagnosis- you avoid long waiting periods, exclusions, and extra premium loading imposed for existing health issues.
Yes. Under Section 80D, you can claim deductions on premiums every year. Starting early means more cumulative tax savings through your working life.
