Buying Medical Insurance Cover in 40s is not a bad idea. 

Ideally, one must buy a medical cover early in life. How early?

Better to have a cover right from the day of birth. 

But if this was not possible, having a cover from early 20s is also great. 

But what about those people who are in 40s and still do not have a medical insurance cover?

For sure they are late, but not too late. 

Probably buying insurance cover in early 40s can still save one a hefty premium payments. 

It is still not too late…

You have entered 40s and might be wondering that opting for medical insurance at this age will prove costly. 

You are right, buying a health cover in 40s will not be as economical as buying it in 20s or 30s. 

But consider this, delaying another 5-6 years will make the matter worse.

Lot of people realise that having a medical cover in necessary, when they reach 50s. 

Though they can still get the cover, but at a very high cost. 

In most cases, people above 65 years of age will not get a health cover at all. 

So if you are in 40s, there is still time. Go for it without any afterthought. 

It is a necessity. 

Moreover, if you are lucky and is not pre-carrying any ailments, do it right away. Why? Because such health condition may not continue forever. 

There is another useful rider here. If you are someone who does regular gymming/jogging etc, then your health condition will be premium. 

For such a person, buying medical insurance cover in 40s can be a big advantage. How?

People who do regular workouts are, physically younger than their biological age. 

The benefit of this can be seen in the form of lower premium loading.

Buying medical insurance cover in 40s is a must, why?

There are people who think that, saving money is good enough. 

Why to pay premium? Save that amount, and when need comes use the accumulated savings.

It does not work this way. 

Lets take an example. Suppose Raj (age: 45) wants to buy a health cover of Rs.5.0 lakhs for his family. 

Annual Premium for this policy comes out to be Rs.20,000 per annum. 

Raj decides to save these Rs.20,000 each year to build a medical corpus by himself. 

How many years it will take Raj to build a corpus equivalent to the insurance cover (Rs.5.0 lakhs)? 14 years (@7% interest on deposits).

Suppose by grace of god, for next 14 years he and his family had no trouble. So his accumulated savings grew to Rs.5.0 lakhs.  

Right at this point of time he got hospitalised for a medical emergency.

The total cost of treatment came out to be approx 5.0 lakhs.

Though Raj was able to fund his hospitalisation expenses from his savings, but all savings was exhausted. 

He took 14 long years to build a savings of Rs.5.0 lakhs. All got consumed within matter of few weeks. 

Medical insurance cover, never gets exhausted. Even if one consumes it fully, the covers gets top-up by the beginning of next year. 

Moreover, insurance companies also provide the benefit of No Claim Bonus (NCB).

Using NCB, in 14 years time, the medical cover of Raj would have grown from Rs5.0 lakhs to Rs.7.5 lakhs (50% add-on to initial cover value).

The point is, for a common man, savings can never replace medical insurance cover. 

What should be the goal of buying a health cover?

I personally think that, the goal of buying a health cover should be long term. 

What I mean by long term?

Building sufficient cover for retired life. 

Insurance companies generally do not offer cover to retired, aged people. 

But there are companies which offer insurance even for aged. 

Typically a person in age bracket of 65-70, needing a health cover of Rs.10 lakhs will need to pay a premium of Rs.1.5 lakhs per annum. 

This is too costly. Buying medical insurance post 60s is very expensive. 

Moreover, medical insurance for senior citizens (bought after 60) are capped at 80.

Means, after 80 years of age there will be no cover. 

Hence it is better to pre-carry a medical insurance policy from a younger age.

Such policies will give protection through out the life. 

The real utility of medical insurance is at old age. 

But generally, people keep consuming their medical insurance policy regularly even in younger age.

They think that, if they are paying premium, why not take advantage of it.

So even for minor ailments, they opt for hospitalisations and claim insurance cover. 

I personally think that medical insurance should not be utilised like this. 

What should be the ideal way forward?

• Buy the medical cover. 
• Stay healthy.
• Minimise the claim (till 60).
• Maximise No Clim Bonus (50%).
• Utilise the cover fully after retirement. 

Why to wait till retirement? Two logical reasons:

• After retirement, income stops.
• Medical bills in old age is maximum. 

So how to manage ailments occurring before retirement?

For major ailments, use insurance cover for sure. But if the person is maintaining a healthy lifestyle, occurrence of major ailments can be avoided. 

For minor ailments, try to pay it from your emergency fund. 

Factors which makes health cover expensive in older age (early 50s)…

Buying medical insurance cover in early 40s is still ok. 

But after this age bracket, the insurance cover gets expensive.

What are the factors that makes it expensive? Following:

#1. Aged people are more likely to carry a pre-existing disease…

After 45 years of age, a typical Indian starts to develop the problems of obesity, blood pressure, blood sugar, joints problems etc. 

These common ailments ultimately leads to bigger medical issues like:

• Cardiovascular disease.
• Liver disease.
• Lung disease.
• Cataract.
• Arthritis. 
• Osteoporosis.
• Alzheimer’s.
• Etc. 

The point is, smaller issues begin to develop with age. 

As these smaller issues are cause for bigger health ailments, hence insurance companies take these “smaller issues” seriously. 

The risk involved to insure such a person is higher. Hence, to cover the risk, insurance premiums are inflated. 

This is called “premium loading”. The quantum of premium loading depends on:

• Age.
• Pre-existing disease. 

#2. At old age, bigger cover is necessary…

Suppose a person is in age group of 30s. 

A health cover of even Rs.1.5 lakhs might be sufficient. 

But for a person in late 60s early 70s, with medical conditions, even Rs.5.0 lakh cover may prove insufficient. 

We know that the bigger is the cover, higher will be the premium.

Hence younger people opt for lower covers to reduce their premium cost. 

But in old age, opting for lower cover is not an option. 

Typically in India, an aged person must have a cover of minimum Rs.5.0 lakhs (my guess). 

A cover of 5 lakhs, for an aged person will have a premium of around Rs.50,000 per annum or more. 

Whereas, a medical cover of Rs.5.0 lakhs bought at 40 years of age may cost close to Rs.10,000 per annum. 

#3. Even money cannot buy full cover…

If one opts to buy medical cover at old age (above 60), he/she must be ready to pay a hefty premium.

But even after paying it, chances of getting full cover is remote. Why?

Consider this, suppose a person is on Dialysis, which is going to continue for lifetime. 

If such a person approaches an insurance company for cover, there is a high chance that the cost of dialysis will not be considered in the cover. 

Insurance companies will exclude any pre-carried chronic disease of aged people. 

Even if the person is ready to pay a higher premium, but insurance company will still not consider it. 

Conclusion…

Buying medical insurance cover is a must. It shall not be avoided.

Like people buy life insurance, buying a health cover for family is as important. 

But what if the person could not buy the health insurance cover early in life?

Its ok. But a person in 40s still has a good chance of getting a medical cover at a reasonable price. 

If the person is healthy, striking a bargain price with the insurance company is possible. 

On an average, a Rs.5.0 lakh cover will cost a family close to Rs.20,000 per annum. 

Idea should be to buy a health cover in 40s, and carry it till retirement. 

The best utilisation of health cover is in the old age. 

Buy a medical insurance in 40s and make your retired life safer. 

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