In this fast-paced world, we barely get time to look after our own health. Changes in lifestyle and sedentary modes are making it a very unhealthy era for us. Now, most of us try and plan well by spending judiciously, making personal budgets and saving. Another major way in which we plan and try to keep our future security is with the help of Insurance. Even if we never end up using or claiming the Insurance, we still believe in our future and to be on the safe side continue with such plans like Religare Health Insurance.
Now, what happens if you plan to retire early? Will your plans be different? Do you need to do things differently? Well, it is a known fact that as you age healthcare costs also rise accordingly. Medical science itself is becoming more expensive due to the new medical innovations and technologies creeping in every other day. Inflation is another factor one needs to figure into their plans. Even if you do not face hospitalization, there will be certain check-ups, consultations, expenses on regular or prescription medicines. And hence, it is a must to factor in these additional expenses especially into your retiring plans. You need to make a completely separate plan for your medical expenses so that your retirement plans go without a hitch.
Some countries have the benefit of long-term health care systems in place or have a social security system. Unfortunately, in India, we are not a part of such plans. Hence, unless you work in the public sector or are planning to work lifelong, you need to plan well ahead. Mind you, and group insurances tend to cease the moment you retire.
This being said, you could also ask your employer if it would be possible that once you retire the group cover can be changed into an individual one. It will be extremely beneficial as you will receive the same benefits as before and the waiting period waivers apply too.
How much should you save so that you can retire early?
In order to be able to know how much health or related medical expenses you might have after you retire, you need first to take a careful look at how much you spend at resent. Look at your costs for the last three to five years and take an average of it. Then add at least 10 to 15% to that for each year. Other than that you need to also think about longevity. It is always safer for you if you give yourself the benefit of more funds than lesser. Look at your lifestyle and your family histories to evaluate what kind of diseases or disorders you might expect in the future. In all this, you will obviously need to add in your spouse and family.
You need to get yourself health insurance maybe like Religare Health Insurance which can be renewed easily and also it needs to be comprehensive. It is best to go in for insurance as early as possible. Else the premiums get higher with age. Also with age, the sum insured is limited, and co-payments become higher. It is said that it is best to plan for medical insurance plans like Religare Health Insurance the moment you touch your 30’s.
If you have no-claim years, you benefit as your medical cover increases. But this will be advantageous only if you get your health insurance really early as only then can you reap the benefits.
If you plan to retire in the next 5 years or so, it is also a great idea to go in for health insurance. Once your employer’s insurance ceases, this would cover you comfortably and even for pre-existing diseases. Also, think about critical illness plans or top-up covers. This gives you more cover but keeps the premiums minimum.
We cannot reiterate enough that you need to get Health insurance early. The later you do, the tests related to the insurance plans get more stringent. Also the longer you wait it may not be possible to get insurance covers online. Most companies do not allow it above the age of 50.
Now, if you think about it carefully, health insurance plans may not cover you top to bottom. Hence your savings need to be more judicious and you need to invest carefully so that you can have a separate fund set aside for such purposes. You need to commit aside a certain sum for each month. There are several instruments which can help you in your savings like mutual funds, equity, public provident fund and so on. It is also a good idea not to get into any new loans before your retirement.
You also have unit linked health plans which give you health insurance as well as investment in debt or equity market.
It is always advisable to be a smart spender and bring down your medical bills accordingly. There are some hospitals also like Apollo or Wockhardt that bring in their own health plans or packages which give you a massive discount on treatments.
Since we have spoken about health insurance; one more important part that we need to talk about it life insurance. These days there are several reliable companies that offer you a life cover like Religare Health Insurance. Death is something that can never be predicted and to ensure that your family stays secure financially, life insurance is an absolute must. This is not something that you think only after you reach your 30’s or 40’s. A term insurance plan is best taken as early as possible. But with so many insurers in this industry, it is advisable that you look at all products, compare and only go with the one that you think suits your needs. Look at your annual income and take a policy wherein the sum assured is at least 10 times of that. Only then will your family be comfortable with all expenses in your absence.