Embark on a worry-free retirement journey by mastering healthcare and insurance planning. Navigate the path to a secure future with our comprehensive guide.
When someone asks, ‘How do you imagine your retirement life?’The first image that comes to your mind is leisurely days, travel, and pursuing passions. People meticulously plan their early retirement by saving as much as possible, investing in profitable opportunities with the dream of living a peaceful life ahead.
But, amidst the excitement of this fulfilling your dream, one crucial aspect often gets overlooked: healthcare and insurance coverage.
While financial plans are carefully crafted, the significance of safeguarding your health and ensuring adequate insurance often remains in the background. But, we would not let you miss anything in your early retirement journey, which brings us to our topic of discussion today – healthcare and insurance considerations for early retirement and the importance of proactive planning.
Let’s begin.
Why is Insurance Important?
Everyone would accept that we don’t like imagining our lives when we would be old and weak, especially during our healthy days. But life comes with surprises, and hence insurance planning is essential.
As individuals enter the early retirement stage, they may encounter several challenges concerning their health and insurance coverage. With rising medical costs and no employer-sponsored coverage, a normal illness can also burn a big hole in your pockets.
The second and most common issue is the potential gap in health coverage. People who retire early often lose their employer-sponsored insurance plan before becoming eligible for government schemes like Pradhan Mantri Vaya Vandana Yojana (PMVVY) or Varishtha Pension Bima Yojana.
This gap poses a considerable risk, especially considering the increasing cost of healthcare in India. The consequence of this oversight can lead to unexpected financial burdens, derailing the very essence of a peaceful retirement.
Solutions for Planning Insurance for Early Retirement
Now, if you are retiring early and wish to have decent insurance coverage, then you can just buy one. But that can be costly. So, what are the alternatives that you have?
Coverage From Your Spouses’ Job
Each individual has a different plan for their career and their retirement. Some people wish to reach the peak of their career before getting retired. At the same time, some choose to accumulate a certain amount of corpus and then pursue their dreams.
If one spouse continues to work and has employer-sponsored health insurance, exploring the option of being covered under their plan can provide a cost-effective solution for the early retiree. This ensures that both partners are covered and reduces the financial strain of individual insurance.
Tailored Retirement Plans
Some companies offer retirement health insurance plans at a reduced cost, or you can convert an employer’s group insurance policy to a policy of your own. These plans can offer more comprehensive coverage compared to individual plans. So, check if your company offers such benefits and save some money.
Private Health Insurance
Investing in a private health insurance policy that covers major medical expenses can provide you with the financial security you need. This can be costly if you are above a certain age.
Suppose option number one and two does not work for you. In that case, you can opt for a plan that includes coverage for critical illnesses and offers cashless hospitalisation facilities, allowing you to focus on your health instead of worrying about bills.
Long-Term Care Insurance
With advancing age, the need for long-term care might arise. Long-term care insurance covers expenses related to assisted living, nursing homes, and home healthcare services. By investing in this coverage, you can ensure that your future needs are adequately met.
Benefits of Planning Insurance Early
1. Save on Taxes
Planning insurance early brings significant tax benefits. You can lower your tax liability by deducting your life insurance premium from your total income, as per Section 80C of the Income Tax Act, up to 1.5 lakh. This means if you pay Rs 1 lakh in premium annually, you can deduct the total amount from your income, reducing your taxes. So, starting insurance young minimises taxes significantly.
2. Affordable Premiums and Benefits
Getting life insurance young means paying less in the long term. Insurers factor in age and health to set premiums. You are healthier in your twenties or thirties, leading to lower premiums than older individuals. Moreover, some insurances also offer free health checkups and other benefits which can be availed. To benefit from this, consider investing in life insurance early.
In conclusion, procrastinating on health insurance and delaying retirement planning is a risk that can have lasting consequences. Embracing early retirement and recognising the substantial advantages of timely preparation paves the way for a timely and well-protected retirement.
Your proactive steps today promise a brighter and more secure tomorrow.
*The article is for information only. This is not an investment advice.
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