Health insurance and its types

Health insurance is insurance against the risk of incurring medical expenses.

Health Insurance or Mediclaim policy offers protection in case of unexpected medical emergencies. In case of a sudden illness or accident, the health insurance policy takes care of the hospitalization, medical and other costs incurred. Healthcare Insurance policies are extremely important to protect against huge medical expenditure when one is ill.

The average life span of an individual has increased considerably in India due to better health conditions, awareness about one’s well being and improved medical facilities. At the same time, the medical costs of treatment and surgery have increased a lot. Therefore, health insurance makes complete sense, especially where majority of the family members are dependent on one or two earning members, as is generally the case in an average Indian household.

According to recent news report health insurance continues to be the fastest growing segment with annual growth rate of 25%. The premium for the health policy has to Rs. 8100 crores in 2009-2010. As per the recent reports from various agencies the health sector has the potential to become a Rs. 30000-crore industry by 2015.

Health Insurance policies also offer a chance to save tax through the Section 80D of the prevailing Income Tax Act. And hence due to this immense benefits, the earlier you get a health Insurance policy in your name the better it is.

What are the types of Health Insurance?

There are various types of Health insurance plans, depending upon the need and requirement of the user. Almost all the insurance companies dealing with healthcare insurance, provide the following insurance plans:

Individual health insurance plan:

Individual insurance caters to the specific health insurance needs of an individual Health Insurance Policy is a standalone policy. To purchase individual insurance, a person must generally answer a health questionnaire and undergo a medical examination to provide evidence of insurability to the insurance company. An insurer may decline coverage on the basis of the applicant's personal habits, health, medical history, age, income or any other factors that bear on risk acceptance. Or the insurer may issue a policy with limitations on coverage.

Family Floater Plan:

A floater is a unique plan wherein one single policy covers the entire family. The family is covered under one single sum insured (coverage amount) and there is a single premium charged for the entire family. Basically, the sum insured amount floats over all the members covered.

Let say a family of three, consisting of husband, wife and child opts for the family floater plan, for a sum insured of 5 lakhs. Then this sum insured could be used up by any family member in case of hospitalization. If husband uses Rs.3 lac of coverage amount, then the remaining Rs.2 lac could be consumed by the wife or child if required.

Floater offers flexibility to a policyholder since any member of the family can use the sum insured amount. Moreover, the unutilized limit can be transferred to other members.

Individual policies are more expensive than the floater policies, so depending on the need, one can choose the option that suits his/her need the best

Group insurance:

Group medical insurance offers insurance cover to a group with a common trait – it may be employees of a company, members of a club or an association or members of a co-operative society etc. Many employers now provide medical insurance as a perquisite to their employees. Premium under group insurance is less than a stand-alone individual insurance policy. Group insurance is more flexible and provides more benefits. It is a quick and effective way to extend cover to a large chunk of population. Group insurance ensures that all the members of the group are insured regardless of their health. Thus, even those with health problems, who might not be eligible for individual insurance, can be covered.

Overseas Health Insurance Policy

An Overseas Health Insurance policy provides cover for medical expenses incurred abroad for treatment of illness and diseases contracted or injury sustained during the insured period of overseas travel.Anyone who is traveling abroad for business or pleasure or for educational purposes should have this policy.