The recommended age to secure health insurance is under 35, particularly since you can only remain on your parent’s insurance until 21. Despite this, only a handful of consumers in that age bracket can say they have done so.
From an early age, we take steps to ensure we have the best quality of life possible, but there is one part of the puzzle that is often missing until later: investing in the right health insurance policy.
In America, half of the consumers with policies are 45 years and older. Meanwhile, in Australia, the generation Z and millennial age groups have seen the largest decline in private hospital cover.
Besides the added protection, opting to choose a policy earlier on in life could be doing you much more of a favor than you realize.
As The Years Tick Upwards, So Do Your Annual And Overall Costs
When asked why they prefer to delay securing private health insurance, most consumers mention that they end up paying more in premiums when they claim at a younger age. Therefore, they prefer to delay paying for a policy until an age they will actually make use of its benefits. This is seen in Australia, where the older generation receives the highest private benefits. At an average cost of $1,711 annually, this way of thinking is understandable. As a result, incentives like a 10 percent discount on health insurance for under 30s from April 2019 have come into effect to encourage younger consumers to invest in their health again.
However, as you age, premiums tend to rise. With age, the likelihood of needing to access the benefits of coverage rises, thereby increasing the risk factor in the eyes of your insurer. With a higher annual premium, you could end up paying the same lifetime cost over a shorter period of time.
Securing a policy earlier means you are covered for longer for the same, or even less, than the original lifetime costs. You can also opt to combine private insurance with public care in the best way possible for your needs. Hospital insurance policies will cover your hospital stay as a private patient, while coverage for extras will cover services outside, such as outpatient treatment (dental, physiotherapy, etc).
Bypass Potential Ceilings And Screenings
As you age, there are certain preconditions and screening tests that you need to satisfy to be insured and to determine your premium. Doing so later in life may mean that certain health conditions are excluded, or that your chances of being rejected are higher. Not only are you gaining more benefits for longer, but the chances are, you will also be able to choose from multiple insurers and deals, allowing you to get the policy more suited for your needs.
Nailing Down A Key Part Of Financial Planning Earlier
Securing health, income and long term coverage is a key recommendation when it comes to solid financial planning. It is intended to protect you, your family and your assets from the unpredictability of the future, including health-related issues. Getting sick not only costs money, but it also impacts your family dynamics and your ability to work. Having a health insurance policy at a younger age means there is a reduced chance of medical costs dipping into your savings, driving you to build high medical debts and eventually affecting your achievement of lifelong goals, such as being prepared for retirement.
Forgoing health insurance at a young age could be as detrimental as neglecting to plan and save for your retirement. Not only are you ensuring your financial security in the future, but you are also constructing a solid foundation for you and your loved ones in the present. As they say, failure to plan is planning to fail.