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Health Insurance - An Overview

Health insurance (popularly known as Medical Insurance or Mediclaim) protects you and your dependents against any financial constraints arising on account of a medical emergency. It sometimes includes disability and long term medical needs. In Mediclaim, you pay a premium and in return the insurer commits to pay a predetermined sum of money to meet the claims. Health insurance is new in Indian context and is slowly catching up with the consumers. Consumers understand the objective of health insurance and it’s offering to cover the ever rising medical expenses.

Health insurance is available to both individual and groups. However, premium for individual policy is costlier than that of the group policy. An individual is the owner of his personal policy. Whereas in group plans, the sponsor is the owner of the policy and the registered members are covered by the policy. You can take advantage of group health insurance to overcome the shortage of your individual insurance. People with no policy or are uninsured due to one or the other reason can take good advantage of the group plans and be covered.

However, before buying a health insurance policy, plan your requirements carefully. It will save you from buying a policy which might not be appropriate for you and can also be expensive.

What is a Health Insurance Policy?

A health insurance policy is a contract between the policyholder and the insurance companies, where the insured person pays an annual premium. And in return of that premium amount, the insurer compensates for the medical treatment up to the specified limit till the tenure of the policy.

The Need for Health Insurance in India

It is rightly said that “Health is Wealth” but looking at the sedentary lifestyle staying in the pink of health seems to be a far off dream. Increasing the risk of lifestyle diseases, improper nutrition, and pollution are some of the prominent reasons. Health issues can knock anytime, regardless of your fitness regime and there arises the need for a health insurance policy. 

Based on a joint report by FICCI and KPMG, only 27% of the people have health insurance in India. And this number is comparatively as compared to our massive population. It is time that the remaining 73% should shed light on the importance of health insurance in India.

If you are still thinking, if you should get a health insurance policy or not, then quickly go through the benefits of buying a health insurance cover in India.

Major benefits of buying a medical insurance cover include an accidental cover, hospitalization cover, and emergency medical treatment cover.  The benefits can be extended to family members with a family floater plan. Here’s a quick rundown of the major benefits:

  • Pays off the Medical Expenses – Nowadays, both major and minor medical treatments can drain out anybody’s bank balance. With a health insurance policy in place, you will be able to meet medical emergencies in an effective manner. The insurance company will recompense the medical expenses and will help you in keeping your savings intact.
  • Best Medical Services - With a medical insurance policy in place, the middle-income group can avail some of the best medical facilities in India. Simply pick a network hospital that is registered with the insurer and get cashless treatment. You can also take treatment in a non-network, but it won’t offer cashless treatment. However, the insurer will reimburse the cost incurred.
  • Tax Exemption - In addition to medical benefits, a health insurance policy also offers tax exemption benefits to the policyholder. The limit is up to INR 25000 U/S 80D of the Indian Income-tax Act, 1961. The premium that you pay for self, spouse, and children is eligible for tax saving. If you are paying a premium for parents (senior citizens) then the limit is up to INR 50,000. As per the provisions under Section 80D of the Income Tax Act, the total expenses on medical treatment of the stipulated diseases of an individual as well as Hindu undivided family, a deduction up to Rs. 80000 is allowed for very senior citizens and Rs. 60000 for senior citizens. This deduction is subjected to various other conditions.
  • Composure - While everyone is juggling with their hectic schedule, medical emergencies come as emotional and financial trauma. But if you are covered under a health insurance policy, you can save yourself from the trouble of running from pillar to post. You can enjoy your peace of mind as you know your insurer has got you covered.
  • Handles Medical and Hospital Expenses Effectively- With the onset of a disease, the person suffering from it and his/her family members have to bear the loss of health, money, and comfort. Particularly, the skyrocketing medical bills and other hospital expenses usually bring the family members under high financial debt and stress.

However, a medical insurance policy will take off the financial burden from your head as it covers the hospitalization expenses ranging from medical bills, room rent, discharge formalities, and doctor fees among other expenses

  • Provides Better Treatment and Care to Patients- Taking medical treatment from a private and super-specialty hospital can be a costly affair and put anyone in a financial turmoil.

Moreover, it also brings a threat to the life of a patient as the lack of adequate money can deny a person appropriate treatment and medical assistance at the time of illness.

But all this can be a thing of past if you have adequate health coverage and can get the best treatment without causing financial stress on your family.

How Can You Obtain A Health Insurance Policy?   

Buying a health insurance policy can sometimes be confusing. There are various health insurance providers such as HDFC Ergo, Bajaj Allianz, Apollo Munich, Reliance, Religare etc. who are offering customized health insurance policies to its customers.

You can select the best health insurance policy based on your budget and health requirements by comparing different plans online. You can even calculate the cost of premium with the help of an online health insurance premium calculator.

Types of Health Insurance Plans

  1. Individual health insurance
  2. Family floater health insurance
  3. Senior citizen health insurance
  4. Group Health Insurance
  5. Critical Illness Insurance
  6. Top-Up Health Insurance Plans

Health Insurance Renewal

To make the most of your health insurance policy, it is important to renew it on time. In case, the policy premium is not paid on time, you will no longer be able to claim your cover.

Nowadays insurance companies also give reminder calls and send emails to their customers so that they do not miss out on the renewal.

Health Insurance Claim

Getting a health insurance policy is one thing, but utilizing its benefits and claiming it in the right manner is important if you do not want to end up getting a lesser claim amount. While you purchase another policy, the health insurance company’s ask you to fill a form, wherein you need to disclose if you have an existing health insurance policy in your name. Disclosure of the same is mandatory; violation can lead to a reduction in the amount of sum insured.

Tax Benefits of Health Insurance

A health insurance policy offers protection against health risks and tax exemption benefits U/S 80D of the IT Act. The cost of premium that you pay allows you to avail the tax benefits.

What are you waiting for now? Get a health insurance policy for yourself and your family members in order to avoid sleepless nights at the time of any illness or health complication.

In a Nutshell

Amid the sedentary lifestyle, it’s always a wise decision to buy a health insurance policy to cover maximum health risks. But, before you make the decision, it’s important to assess what all your policy covers and what all is excluded. If your knowledge beforehand, it makes it easier for you to do paperwork and shortens the claim process. Make sure you go through the insurer’s website and read all the clauses, terms and conditions. And also ensure to keep your documents and requirements in place before filing the claim.