Importance of health insurance in your retirement planning

Health insurance is largely tailored to tide you over in medical emergencies. However, incorporating it in your retirement planning becomes more critical as you negotiate inflation and the risks of health issues that may even be prolonged in your old age. It may well be that secret ingredient for a comfortable and stress free living through your golden years.

Medical emergencies

As mentioned, one of the most compelling reasons to prioritise health insurance is the unpredictability of medical emergencies. Medical treatments can be expensive, especially in major surgery or long-term hospitalisation. The medication costs of major chronic ailments also tend to shoot up over time, resulting in significant financial pressures.

Retirement stability

Another given is that prioritising health insurance coverage ensures that you are protected financially in these medical crises. It acts as a safety net, shielding retirement savings from being depleted due to hefty hospitalisation bills. 

Lower premiums

Generally, the younger you are when purchasing health insurance, the lower the premiums you pay. Starting early allows you to take advantage of the power of compounding as savings have more time to grow and accumulate. It can result in significantly larger retirement funds than those who start later.

Long term gains 

Health insurance companies tend to offer multiple benefits to long-term policyholders, including no-claim bonuses offered to those who don’t make claims during a specific period and cumulative bonuses that reward policyholders for maintaining continuous coverage, with increasing benefits and so on. Retirees can unlock these additional benefits by staying committed to a health insurance policy over the long term, bolstering their retirement planning. 

Gaining additional riders

As one grows older, additional riders become available such as critical illness riders and personal accident plan that can be added to the policy. They offer retirees comprehensive coverage tailored to their specific requirements and offer added financial protection, ensuring retirees do not face economic duress in case of any unforeseen health-related circumstances that may arise.

Playing it smart

Opting for a higher insurance cover, ideally up to Rs. 1 crore or more, will be a good start as a higher insurance cover protects retirees against inflationary pressures on medical treatment and procedures. Furthermore, combining a base insurance plan with a super top-up plan is helpful. It allows retirees to customise coverage to meet specific medical needs, which entails basic coverage for regular healthcare expenses while adding substantial coverage limits with a super top-up plan to address significant medical events. 

It is advisable to have a comprehensive health insurance plan that covers the policyholder and extends coverage to their loved ones. It provides complete healthcare protection for the family adding to your peace of mind. 

(The writer is Chief Distribution Officer, ManipalCigna Health Insurance)