Importance of Health Insurance and Its Benefits

What is Health Insurance? Why Does Health Insurance Matter?

A health insurance plan is an agreement between the insurance company and the insured, wherein the former promises to provide financial safety for planned or unplanned medical treatments in exchange for a fixed premium amount paid by the latter.

A standard medical insurance provides coverage for in-patient hospitalization, pre- and post-hospitalization, ambulance charges, day care procedures and modern treatments. Other benefits of a health insurance plan include maternity coverage, personal accident coverage, bariatric surgery expenses, hospital cash benefit and preventive health check-ups, among others.

Buying health insurance is important in India because medical expenses can quickly burn a hole in your pocket, causing you to lose your hard-earned money. By paying a small premium amount monthly or yearly, you can save big on the medical expenses and keep your finances intact.

Why Do We Need Health Insurance Today?

If you are still wondering why we need health insurance, the answer is that it has now become a necessary financial tool to manage medical requirements. With the rising medical costs in India, the need for health insurance cannot be dismissed.

The impact of not having a health insurance plan is much more than the premium that you pay for it. In situations involving prolonged or expensive medical treatment, the costs incurred are substantial. If you do not have a mediclaim policy, you will have to pay all the expenses out of your own pocket. On the other hand, a health plan allows you to get financial coverage with no or only a portion of expenses to be actually paid by you.

For instance, you need to undergo a bypass surgery, which costs around ₹2 lakh. Now, if you have a health insurance plan, the insurer will cover the surgery cost per the policy's terms and conditions. However, if you do not have health insurance, the full amount of ₹2 lakh has to be paid by you. This shows why health insurance is very important.

The role of health insurance has expanded from providing financial protection to serving as a preventive care measure. It includes annual health check-ups, wellness benefits, etc., to encourage the insured to adopt a healthy lifestyle.

Benefits of Health Insurance

Here are the key benefits of buying health insurance in India:

1. Financial Protection

   Health insurance provides financial coverage for medical expenses incurred on hospitalization, surgeries, doctor's fees, ambulance services, medications, etc. It helps you protect your financial savings and stay debt-free in cases where there are heavy medical bills.

2. Access to Quality Healthcare

   With a network of various hospitals, insurers offer convenient medical care to the insured. In case of sudden illnesses or accidents, it allows the insured to access to quality healthcare without worrying much about the financial burden.

3. Cashless Treatment

   Most health insurance plans in India offer cashless services for in-patient hospitalization and treatments at network hospitals. Many hospitals now offer cashless treatment even at non-network hospitals through the ‘Cashless Everywhere' facility.

4. Protection Against Medical Inflation

   Healthcare costs in India are skyrocketing, pushing medical facilities farther away from the reach of the common man. The best health insurance plans help combat the rising medical costs, ensuring financial stability in times of planned and unplanned medical needs.

5. Tax Benefits

   The policyholder can claim tax deductions under Section 80D of the Income Tax Act on the health insurance premium amount paid.

6. Peace of Mind

   A mediclaim policy enables the insured to focus on recovery and healing, rather than worrying about the financial burden during a health crisis. It is especially true in cases of cashless hospitalization where the insurer directly settles the medical bill with the hospital.

   Now that you know why health cover is important, you must ensure to buy a medical plan that fits your health requirements and budget.

Why Buying Health Insurance at an Early Age Is Beneficial?

The modern, fast-paced life with little physical activity, unhealthy diet, stress and pollution is making even the young people prone to chronic or critical illnesses at an early age. This is more dangerous as young people often think they are healthy and may be unprepared for any medical emergency that may arise. Buying health insurance at a young age can bring various early age health insurance benefits.

Benefits of Buying Health Insurance at an Early Age

Health insurance premiums are generally lower at a younger age. This is because the chances of a young person developing a critical or prolonged illness are low, thus decreasing their likelihood of raising a claim. Another benefit is that young people can easily serve the health insurance waiting periods without falling ill or needing a claim. More claim-free years also mean more accumulation of no-claim bonus (NCB). Thus, the importance of early health insurance cannot be overlooked.

Common Myths About Health Insurance

Although the need for health insurance in India is undeniable, many false beliefs also circulate among people, which raises questions about the importance of health insurance. Here are some health insurance myths that you must not believe:

1. Myth: Health insurance is too expensive.

   Fact: The premium you pay for health insurance is way less than the medical costs you may have to incur in case of a medical treatment.

   For instance, your annual health insurance premium is ₹15,000. You continued your policy but did not make any claim for five years. You may feel that you are paying the amount in vain. But in the sixth year, a need for knee replacement surgery arises, which costs approximately ₹4 lakh. Since it is covered under your health insurance plan, you may be required to pay only a portion or no amount at all. So, in contrast to the medical expense of ₹4 lakh, the premium amount of ₹75,000 (₹15,000*5) is quite low.

2. Myth: I am young, I don't need health insurance.

   Fact: Even if you are young, medical emergencies can occur at any time. Moreover, unhealthy eating habits, sedentary lifestyle and stress are leading to early chronic illnesses in young people. Hence, the importance of medical insurance for young people is the same as for those in middle age (and more prone to health problems).

3. Myth: Employer-provided insurance is enough.

   Fact: A group medical insurance or corporate health insurance provides limited coverage and becomes inactive when you quit your job. The sum insured may not be sufficient for critical illnesses or if you also want to cover your family.

4. Myth: Only people with illnesses need health insurance.

   Fact: Insurance is not only for people who are ill or prone to illnesses. People who are healthy may also face unexpected health problems, such as seasonal illnesses or unforeseen accidents. Health insurance is not just for present medical costs, but a financial cover to protect from future unforeseen expenses.

5. Myth: Medical insurance covers only hospitalization expenses.

   Fact: Health insurance is about much more than just hospitalization coverage. It also includes day care procedures, modern treatments, critical illness coverage, and ambulance service charges. Some plans cover bariatric surgery, annual health check-ups, childbirth-related expenses, vaccination costs, road accidents, etc. Some plans also come with global coverage, allowing the insured to receive planned or unplanned medical treatments outside India.