NRIs usually settle abroad for lucrative work-related opportunities. However, as old age and retirement draw near, they often think of returning to their roots and settling down in India. Proximity to family and reduced cost of living, among other factors, drive NRIs to retire in India.
Are you too thinking about the same?
If you are, there are a few provisions that you should have in place for a comfortable retired life. One such provision is a health insurance plan.
The need for health insurance when retiring
Here are some reasons why you need a health insurance plan in your financial portfolio when you are thinking of retiring in India –
Medical costs are expensive
Medical costs in India might not be as high as in the country that you are living in but they are considerable, especially when you retire with a limited corpus at your disposal. Moreover, with a steady rise in medical inflation at 14% in 2021, medical costs are rising constantly. By the time you retire, the costs would be considered that might put a considerable dent in your retirement fund in the case of a medical emergency.
If you have an existing health plan abroad, chances are it would not extend coverage in India. That is why you need an independent health insurance plan in India to cover the medical costs that you incur post-retirement. With an adequate sum insured, the plan would tackle the medical costs so that your retirement corpus does not take a hit.
Old age = increased probability of illnesses
As you age, your body becomes frail, weak and more prone to illnesses and injuries. Lifestyle diseases set in and you might require frequent medical attention. As stated earlier, this attention might prove costly.
So, a health insurance plan becomes essential to protect against the increased incidence of illnesses and their corresponding medical bills.
With a health insurance plan in place, you can have retirement with the knowledge that your finances would be secured even in a medical emergency. The health plan would take care of the bills and you can use your retirement corpus to fulfil your bucket list or to live out your retirement with peace of mind.
Let’s not forget the tax angle too. Health insurance plans help you save tax under Section 80D of the Income Tax Act, 1961. You can claim a deduction of up to Rs.25,000 if you are below 60 or Rs.50,000 if you are a senior citizen. This deduction can help you save up to Rs. 15,000 in taxes if you fall in the highest bracket of 30%. So, you can reduce your tax liability and increase the income that originates in India.
Things to consider when buying health insurance
While the benefits of buying the policy make it a quintessential requirement in your financial portfolio, here are some important aspects that you should consider –
- If you are buying health insurance at a later age, say in your late 40s, early 50s or later, you might develop some pre-existing illnesses, like diabetes or hypertension. Such illnesses would not be covered in a health plan during the first few years. So, if you have a pre-existing condition, check for the policy with the lowest waiting period. Also, buy the policy early on so that you can wait out the period and avail of comprehensive coverage later on.
- If you are a senior citizen, you can explore senior citizen health plans that specifically provide coverage for older individuals.
- Buy the health plan when you plan to settle in India. The plan might not allow international coverage. Even if they do, there might be a restriction on the coverage amount and/or a co-payment. As such, buying it when you are still living abroad is not feasible. So, but when your shifting to India is imminent.
- Check for coverage restrictions and exclusions. Choose a plan that offers the maximum possible coverage. You can compare different plans and then make the right choice.
- Health plans in India provide lifelong coverage. Ensure you renew the coverage regularly to enjoy uninterrupted coverage lifelong.
Retiring in India can be a wonderful experience as you come back to your roots. When planning your retirement, include a health insurance policy in your portfolio so that your retirement proves peaceful and financially secured.