Health Insurance Misconceptions Amongst Millennials
Millennials believe in the concept of living life to the fullest. This school of thought does not accommodate the idea of insuring oneself as it is normally considered redundant. If at all they do buy an insurance plan, it is largely, if not solely, for tax benefits. An ICICI Lombard study found that 75% of young adults (between 25-35 years of age) have health insurance. Of this, 46% bought the policy only to save tax under Section 80D of the Income Tax Act.
Why don’t millennials look at health insurance as a safety net? Are their decisions clouded by insurance misconceptions? Well, probably yes!
Here are some common health insurance myths among the young population.
Myth 1: Claims are often denied and the process is too lengthy
Most millennials assume that insurers often reject health insurance claims. Also, the insurance claim process is too cumbersome. But as a general rule, companies deny claims only in the case of exclusions, as specified in the policy, or when the policyholder misrepresents information while purchasing the plan. To ensure that the claim is honoured, one must ensure transparency while filling the application form and read the policy documents and the fine print carefully. Also, they can study the Claim Settlement Ratio (CSR) of the company, which is available on the IRDAI website. A CSR represents the proportion of claims paid by the insurer in a year.
Myth 2: Young people have fewer medical issues; so they don’t need health insurance
Generally, medical and health needs increase with age. But today’s unhealthy lifestyle, eating habits, sleeping cycles, stress and environmental conditions have proved that no age is free of medical risks. Novel diseases, illnesses and health issues are increasingly reported among the youth nowadays. Also, road accidents and other related cases can strike anyone at any point of time. The sooner one invests in a health insurance policy, the safer they are. Also, purchasing a health cover when young means lower premiums as compared to buying at a later age. Further, the waiting period clauses for most diseases and illnesses would pass before the need arises.
Myth 3: Single people do not need health insurance; only married ones do
Health insurance policy is important for everyone, irrespective of their marital status. Buying insurance is more like achieving a financial goal. Even when young and single, insurance plans can secure dependent parents. Health insurance minimises the monetary and emotional stress of taking care of aged parents. In the case of married couples, the plan can cover the spouse, children and other loved ones.
Myth 4: Most plans offer the same benefits but are packaged differently
At the core of it, all health insurance plans offer financial protection against health emergencies. But not all of them are the same. Some insurance policies have specific coverage, like diabetes plan, critical illness cover, senior citizen-specific policies, etc. COVID-19 insurance plans also have different benefits. There is no standard product to fit everyone’s needs. Each plan has a defined cover, specific terms, benefits, etc. Insurance policies can also be customised to one’s unique advantage.
Myth 5: With so many insurance plans, picking one is confusing
That is right, in a way. Multiple insurance companies are offering different plans. But millennials can easily find one that fits their needs. Some helpful tips are as under:
- Determine healthcare needs depending on age, gender, family medical history, work-life situation and also locality
- Select the insurer with a good reputation and a high claim settlement ratio. The ratio will determine how easily health policy claims are paid
- Take the policy with the minimum waiting period for pre-existing illness
- Select an insurer with a good hospital network for cashless claims
- Choose a provider with a cumulative bonus feature. Such a bonus provides annual growth in sum assured for every claim-free year, also called no claims bonus or NCB
- Opt for a plan that offers maximum age renewal
- Compare premiums of different plans
- Take affordable health policy with considerable coverage and maximum add-on riders
Myth 6: Health insurance from the employer is sufficient
Corporates provide health insurance only until one is employed. As soon as the employment contract ends, the insurance plan ceases. Also, these policies have restrictions on the sum assured and reimbursement caps. It is smart to buy separate health insurance when young to get lower premiums and more coverage like during the COVID-19 times. Such a policy will also offer protection in the case of a job change or even unemployment. Further, personal insurance policies can be customised to suit one’s needs. They are unlike standard insurance products offered by employers. Also the company insurance gives tax benefits to the corporate and only an individual policy or family floater can give you tax benefits under Section 80D of the Income Tax Act.
The last word
Postponing buying health insurance is not ideal for millennials, an age-group known for smart decisions. It is always wiser to invest in such a policy when young for lower premiums, better coverage, and a reliable asset to fall back upon in uncertain times.
To find the right health cover, you can get help from professional insurance agents.
