Health Insurance

What is Health Insurance?

Health Insurance is a contract between the policyholder and the insurer where the health insurance company provides financial coverage to the insured up to the sum insured limit. It offers medical coverage for healthcare expenses incurred during an emergency or planned hospitalization. It also provides tax savings on the premium paid to the insurance company under Section 80D of the Income Tax, 1961.

Top Reasons to Buy a Health Insurance Plan

Medical inflation is on the rise making treatments expensive. If you get hospitalized for a critical illness or lifestyle disease, you may end up losing all your savings. The only way to afford quality medical treatment during a health emergency is by buying a health insurance policy. Take a look at some of the top reasons to buy a health insurance plan below:

• Beat Medical Inflation - A health insurance policy can help you pay your medical bills, including pre and post-hospitalization expenses, today as well as in future despite the rising medical costs.
• Afford Quality Medical Treatment - It helps you to afford the best quality medical treatment and care so that you can focus only on getting cured.

• Fight Lifestyle Diseases - It allows you to pay for the long-term treatment of lifestyle diseases like cancer, heart ailments, etc., that have been on the rise with the changing lifestyles.
• Protect Your Savings - It helps you to protect your hard-earned savings by covering your medical expenses so that you can avail the required treatment without any financial worries.
• Avail Cashless Hospitalization Facility - It allows you to obtain a cashless hospitalization facility at any of the network hospitals of your insurance provider by raising a cashless claim.
• Get Tax Benefits - It enables you to save tax on the health insurance premium that you’ve paid under section 80D of the Income Tax Act for better financial planning.
• Ensure Peace of Mind - It allows you to obtain medical treatment with peace of mind as you do not have to worry about paying hefty hospital bills.

What is the Ideal Coverage for Health Insurance?

A general rule of thumb says people should buy health insurance plans with a sum insured of at least half of their annual income. Considering medical inflation, experts suggest buying a medical insurance policy of at least ₹10 lakh. But it’s not that simple.

Health insurance coverage should be tailored to the medical needs and circumstances of the people. Broadly, the ideal coverage amount for medical insurance depends on three factors:

1. City of residence (i.e. tier-1, tier-2 or tier-3 cities)
2. Age or life stage of the insured
3. Cost of hospitalization expenses in future (while considering medical inflation)

A low sum insured of ₹5 lakh may be sufficient for a young person living in a tier-3 city with no pre-existing disease. However, an older person with pre-existing diseases or someone living in a tier-1 will have to opt for a higher sum insured of at least ₹10-20 lakh to cover their medical expenses adequately.

Key Benefits of Health Insurance Plans in India

Health insurance plans offer a variety of health benefits to the insured, depending on the plan. Following are the key benefits of buying a health insurance plan in India:

• Hospitalization Expenses - A health insurance plan covers the medical expenses incurred on getting admitted to a hospital for more than 24 hours. It includes room rent, doctor’s fee, medicine costs, diagnostic test fees, etc.
• Pre & Post Hospitalization Expenses - It covers the medical expenses that you may have incurred on an illness before getting hospitalized as well as follow-up treatment expenses incurred after getting discharged. The pre-hospitalization and post-hospitalization expenses are covered up to a fixed number of days as specified in the policy document.

• ICU Charges - A health insurance plan also covers the cost of availing treatment in an ICU or Intensive Care Unit during hospitalization.
• Ambulance Cost - It covers the cost of ambulance services availed to reach the nearest hospital during a medical emergency.
• Cashless Treatments - All health insurance providers in India offer cashless treatment facilities at their network hospitals. You do not have to worry about arranging money to pay the hospital bills if you get admitted to a network hospital, as it will be settled by your insurer under cashless claims.
• Day Care Procedures - It also covers the cost of availing day care treatments that require hospitalization of less than 24 hours.
• Pre-existing Diseases - The best health insurance policy also provides coverage for pre-existing diseases after you have completed the waiting period. Usually, pre-existing diseases are covered after a waiting period of 2 to 4 years.
• AYUSH Treatment - It covers the cost of availing medical treatment through the AYUSH system of medicines that includes Ayurveda, Unani, Homeopathy, Siddha and Yoga.
• Medical Check-ups - Most health insurance companies in India offer free preventive health check-up facilities to the insured at regular intervals depending on the policy terms and conditions.