Financial direction

Why including insurance in financial planning is a must for Gen Z

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HIGHLIGHTS

  • We are often unaware of skyrocketing health care costs and the possibility of more than one family member falling ill in the same year, this simple sum insured is not enough to protect us and our family.
  • We also tend to take risks in our careers when we are young. We change jobs more often than when in our 40s or 50s we take a break between jobs and sometimes we can lose jobs.
  • Each of these can have a significant impact on our health care protection. A Mediclaim policy is terminated when we change or lose jobs.

New Delhi: The coronavirus pandemic has been an eye opener for young adults who are otherwise assumed to be at low health risk. The pandemic has made us realize that a deadly virus can affect anyone at any time, regardless of age, and treatment costs can skyrocket. The younger generation is also increasingly falling prey to common health risks such as lifestyle diseases, climate change and pollution-related ailments.

While after the 2nd wave and primarily driven by health awareness, we have seen a significant growth in first-time insurance buyers between the ages of 25 and 35, it’s time for Gen Z to start considering buying health insurance as part of their financial planning to meet their current health care needs and cover future financial losses. Rakesh Jain, CEO of Reliance General Insurance, explained why including insurance in financial planning is a must for Gen Z.

Ensure protection at all times

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When it comes to health care, salaried people are usually content with only having a Mediclaim policy with a standard insured amount of Rs. 3-5 lakh offered by employers. What we often don’t know is that with soaring health care costs and the possibility of more than one family member falling ill in the same year, this simple sum assured is not enough to protect us. , us and our family.

We also tend to take risks in our careers when we are young. We often change jobs only when in our 40s or 50s we take a break between jobs and sometimes we can lose jobs. Each of these can have a significant impact on our health care protection. A Mediclaim policy is terminated when we change or lose our job. Therefore, we will not be financially protected against any type of healthcare related expenses during this time. Although it might seem like a far-fetched incident, if it happened, it would surely burn a hole in the pocket.

It is therefore imperative for employees to invest in individual/family health insurance that can serve as a safety net with additional coverage. Plus, your personal health care will always be active and provide protection regardless of your employment status.

If you are self-employed, such as a freelancer or business owner, having an individual/family health insurance policy is of paramount importance as you will be entirely dependent on this policy for financial protection against any costs. health care.

Benefits of starting early

Starting to invest in a health insurance policy at an early age has many other benefits. This will help you save lump sum money on future health care. Since insurance premiums are calculated taking into account the age of the policyholder, you will pay a lower premium if health insurance is taken out early in your life.

Health insurance as a tax saving tool

You can also save money by taking advantage of tax benefits. Under 80D, you can save up to Rs. 50,000 in tax to insure yourself, your parents (under 60), spouse and children. If your parents are elderly (i.e. they are over 60), you can get an additional tax benefit of Rs. 50,000.

Unfortunately, the average health risk is increasing at an alarming rate in India and, as we have seen recently, it is not sparing the young population. Therefore, investing in insurance early is not only crucial but necessary for young people to secure financial protection and quality hassle-free health care for themselves and their families.

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