How much health insurance should you buy and when — an age-wise breakup
CNBC 11/04/2023
The amount of insurance one needs
depends on several factors, including age, income, expenses, debts,
dependents, location, current health status, lifestyle habits and
financial budget.
Here are some general guidelines on how much insurance one may need based on different ages:
Insurance in 20s
In
their 20s, people are energetic and in the prime of health, which may
be the reason why they ignore the importance of investments, including
insurance.
According
to Aniruddha Sen, Co-Founder at Kenko Health, getting insurance at a
younger age comes with fewer premium costs due to no old-age ailments
and related risks being involved.
"It
is best to get insurance as soon as one is eligible because premiums
are a lot more affordable. People in their 20s can take basic insurance
first and add on coverage later in life when required. This will have
many long-term benefits since they would be able to save more
progressively," Sen told CNBC-TV18.com.
Insurance in 30s
The
30s comes with increased responsibilities towards work, family,
finances, and dependents. Now it's the time to evaluate financial
ability and health and get insurance accordingly.
"If
one has a cover, then he/she can increase its amount after every
significant event in life, such as marriage or home purchase. He/she
must also plan for comprehensive health cover for family that covers not
only expenses on critical healthcare in case of unforeseen events but
also out-of-pocket expenses on doctor consultation, diagnostics,
medicines etc. This will also ensure a good financial health," Sen said.
Insurance in 40s and 50s
The
cost of insurance sees a surge as one ages, and it is always wise to
estimate any health problems that one might encounter at this time. When
people are in their 60s, it becomes a far more expensive proposition.
During this time in life, one should start thinking about retirement and
looking through good plans for the same.
"It
is also crucial that one should review the insurance coverage annually.
If possible, make it a practice to increase it by 10-15 percent
post-30s to avoid paying a higher premium at a later stage. Planning is
crucial whether it is wealth or health. Therefore, think wisely and
invest in plans that offer comprehensive coverage as far as health is
concerned," Sen told CNBC-TV18.com.
Insurance in 60s and above
As
individuals approach this age, they may be more prone to chronic
lifestyle diseases such as hypertension, diabetes, and arthritis. They
may require more frequent medical attention, which may increase
healthcare expenses.
According
to Sharad Mathur, Managing Director & Chief Executive Officer at
Universal Sompo General Insurance, a health insurance plan that offers
comprehensive coverage for preventive health care, chronic disease
management, and hospital stays may be suitable for needs.
"In view of this, people in early 60s should have minimum Rs 31-50 lakh of insurance coverage," Mathur told CNBC-TV18.com.
For
people above 65, healthcare needs may become more complex, and they may
require more frequent medical attention, including need for knee
replacement and other orthopaedic surgeries.
"A
health insurance plan that offers comprehensive coverage for preventive
health care including outpatient treatment covering doctors visit,
investigation and prescription drugs, chronic disease management, and
hospital stays may be suitable for needs. It is recommended to have
minimum Rs 51 lakh to Rs 1 crore of insurance coverage," Mathur said.