Trends in financial planning among Gen Z and why adding insurance is a must-do! – The Financial Express

Unlike the previous generations, Gen Z is more aware of their expenditure, and their savings. Financial planning is an aspect that the majority of the Gen Z practice for a secured future.

According to a report, Indian millennials and the Gen Z audiences are more confident about the pandemic bringing about a positive change in the way people prioritize health. This in turn reflects on their ability to deal with future epidemics more effectively.

While today’s youth believe in savings but their approach is different from previous generations. Protecting one’s health and having financial security is of utmost importance. Hence, a health insurance policy not only secures an individual with medical benefits but also provides them with savings and guaranteed returns. Financial protection is the key reason why health insurance is important while one goes through life and all its uncertainties. It stands true for people of all ages, including the youth. 

Why Financial Planning is important for Gen Z?

Gen Z is considered as the next set of policyholders for insurance companies, a generation who takes life one step at a time and practices living in the moment. Their life goals are different from their parents as they seek quick results and better returns. The generation is changing the way industries function across sectors. 

Unlike the previous generations, Gen Z is more aware of their expenditure, and their savings. Financial planning is an aspect that the majority of the Gen Z practice for a secured future. One of the ways of having a secured financial future is opting for health insurance.

Why buy health insurance when young?

A health insurance policy is a beneficial investment for all ages. It is always advisable to opt for a policy at an early stage to get various advantages.

Possibility of lower premiums: Premiums are charged considering the current age of the policyholder, hence opting for a policy at an early age can help Gen Z avail of the lower premium benefit.

Pass the waiting period: Health insurance policies have the concept of a waiting period, during which the policyholder is restricted and cannot make claims for specific pre-existing diseases, procedures, and treatments. Every policy has a different waiting period ranging from two to four years typically. When a person buys health insurance in their 20s, it becomes easier for them to pass through the waiting period without it becoming a concern. This indicates that in future in case of any claim, they would have passed the waiting period already. 

Avail No Claim Bonus: In the absence of any claims in the preceding year of a policy term, most insurance companies provide a no claims bonus (NCB). The policyholder can get a cumulative bonus if they get a health insurance policy when they are young because they will most likely renew it every year. As a result, the bonus accumulated increases your coverage amount which is an advantage for later stages in life. It can be either a discount on their premium for the next policy period or an increase in the policy cover without increasing the premium

Tax Benefit: Purchasing health coverage at an early age allows a person to take advantage of tax benefits for a longer time as it can deduct the premium paid from the total income under Section 80D of the Income Tax Act of 1961.

What to look out for when buying health insurance?

In addition to the policy cover and premium amount, here are some things to look out for when one is purchasing a health insurance policy:

Exclusions under the policy – A list of standard exclusions are included in every health insurance policy and this can be referred to in the wordings document. Before making a purchase decision, it is critical to read and comprehend them.

The credibility of the brand- The credibility of the brand plays a crucial role in insurance and before purchasing a policy it is essential to trust the brand.

The benefits included – When purchasing health insurance coverage, certain crucial features to look for include cashless claims, a large network of hospitals, etc. are things to look for when buying a health insurance policy. 

By, Shreeraj Deshpande, Head – Health Businesses, SBI General Insurance

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