Know all about Health Insurance here
One of the biggest non-budgeted spends an individual or a family makes are medical expenses. These spends cannot be predicted, since medical problems and emergencies can arise at any time. With the rising cost of good quality medical treatment, an increased outgo on hospitalization and medicines dent pockets and deplete savings. However, it is completely possible to reduce or eliminate this savings depletion, and that is by investing in Health Insurance.
The Health Insurance penetration in India is low, and it is not hard to see why. For most people, the knowledge of Health Insurance and how it works is low.
What is Health Insurance?
Health Insurance is a type of insurance that covers the cost of medical treatment. The extent of coverage, inclusions, and exclusions differ based on the policy. But a typical Health Insurance policy covers:
- Hospitalisation costs
- Pre-hospitalisation costs up to a number of days before the hospitalisation
- Post-hospitalisation costs up to a number of days after the hospitalisation
- Hospital cash for the days of hospitalisation
- Diagnosis costs for critical illnesses
- Daycare procedures, e. operations that do not require hospitalisation
- Ambulance costs
Some specialised Health Insurance policies cover maternity costs, cost of caesareans, medical treatment for the mother and child. There are even cancer specific Health Insurance policies.
Health Insurance policies settle medical expenses based on the amount of coverage offered.
The premium on the Health Insurance policy depends on the age of the person covered, the gender, whether the person smokes, any history of prior illnesses. Most insurance companies include a complementary and comprehensive medical test so that they can correctly determine the premium.
There are two types of Health Insurance policies based on the settlement of claims:
In a reimbursement policy, the insurance company reimburses the cost of treatment after it has been paid. These type of policies are usually administered by Third Party Administrators (TPA) who manage the reimbursement procedures on behalf of the insurance company.
In a cashless policy, the insurance company directly settles the hospital bill. This means the insured does not have to incur any expense on medical treatment.
Types of Health Insurance policies based on the number of people covered:
- Individual insurance policy
- Family floater policy
A family floater can work out to be cost effective depending on the number of people to be covered. By taking a family floater policy, it is possible to get a higher cover for a lesser premium.
Other features of a Health Insurance policy
Health Insurance policy not only offers coverage against medical treatment expenses, but it also offers a tax benefit under Section 80D of the Income Tax Act. Insurance premium paid for self, spouse, dependent children, and parents are allowed as a deduction. This deduction is given to provide an impetus to buy Health Insurance policies. Insurance premium up to Rs. 30,000 is allowed for self, spouse and dependent children. If the parents are not senior citizens, premium deduction of Rs. 30,000 is allowed. If parents are senior citizens, this deduction goes up to Rs. 50,000.
As per IRDA regulations insured can port policy at the time of renewal by giving prior notice to insurer to avail high level services & benefits. Its possible to change your health insurer service provider without losing benefits such as no claim bonus & waiting period.
Every Health Insurance policy has a waiting period, which means if any claim is made within this period, the insurance company will not settle it. This is done to avoid frivolous claims.
Most insurance companies do not cover pre-existing diseases. Sometimes, to cover pre-existing diseases, the insurance company may charge an extra premium.
Now that you know the Health Insurance meaning, you should look into getting yourself and your family covered and protected against costs of medical treatment.
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Know more about purchasing Health Insurance here.
*Terms and Conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action.