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Health insurance: What is it, Process, Criteria, Plans

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Health insurance: What is it, Process, Criteria, Plans

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A sedentary lifestyle, unhealthy eating, and irregular sleeping patterns tend to make us more prone to illness and diseases. And with the cost of healthcare ballooning,  purchasing health insurance seems to be the wisest option. It can help you avoid burning your savings during a medical emergency. Having a health insurance policy can thus help you against both financial and mental stress.

What is health insurance?

A health insurance policy is an annual contract where the insurance provider covers medical costs incurred while the policy is in effect. Hospitalisation costs related to illness, accidents, surgery, etc., are included in the medical expenses. By paying a fixed amount known as a premium, you can get cover for such expenses. These costs are covered by medical insurance coverage in the form of cashless treatment or reimbursement.

Why do you need health insurance?

Buying a health insurance policy is essential for a wide range of reasons. Let's take a look:

Protects against surging medical expenses

People buy health insurance plans to protect their money from ever-escalating medical expenses. Additionally, it covers pre and post-hospitalisation expenses as well and, in some cases, certain OPD expenses as well.

Provides critical illness cover

This is yet another essential cover to have in today's world of escalating lifestyle-related diseases. If you are diagnosed with any of the listed critical illnesses that are covered, you will receive a lump sum payment, which can make managing these illnesses easier.

Hassle-free claim process

Each health insurance company has partnerships with a large number of network hospitals that allow cashless claims. The insurer will cover the medical costs for all legitimate claims, leaving you to pay only the required deductibles and any non-covered fees.

You can enjoy tax benefits

The Income Tax Act of 1961, Section 80D allows for tax deductions for premiums paid for maintaining health insurance coverage. You may save up to INR 50,000 per year from your taxable income for a policy.

Who is eligible to buy a health insurance plan?

To be eligible for a health insurance plan, you will have to fulfil certain criteria-

Age

The minimum age to purchase a policy is 18, and the maximum age is 65. Children are eligible for health insurance from the age of 90 days to 18 years. Seniors over 65 can also enrol in plans, depending on the type of coverage.

Pre-existing Conditions

If you have any prevailing condition, then the pre-existing medical issues are typically not covered by health insurance companies till the waiting period is over.

Medical Tests

If you’re above the age of 45 and purchasing health insurance, then you may have to undergo certain medical tests before the insurance is approved. The different diagnostic tests offer them an understanding of the potential health dangers. If you do not have any medical conditions, you must submit a declaration of good health. Depending on your medical condition, the premium rates will differ accordingly.

Types of health insurance

Individual Health Insurance

An individual health insurance coverage pays for a single person's medical expenses. You, your parents, your spouse, and your kids are all eligible for this coverage; however, every family member receives a separate sum insured under this plan.

Family Floater Insurance

In such plans, the whole family is covered under a single sum insured under a single policy. This full amount may be paid out for one member's treatment or all of them.

Group Health Insurance

Group health insurance plans are purchased for a large number of people by a group/ firm/ company. While these plans are reasonably priced, they frequently only cover the most basic medical conditions.

Critical Health Insurance

You can either buy them separately or as an add-on or rider to your existing health insurance policy. After a critical condition is diagnosed, these policies frequently pay claim payouts as a single lump sum payment. It covers life-threatening illnesses like cancer and provides a comprehensive cover, and gives wide coverage but comes at a very high premium.

Tips for choosing a health insurance plan in India

With insurance companies offering a wide range of health plans, let’s discuss what to look for while purchasing.

The plan should offer wide coverage

Select a health plan that offers advantages like pre- and post-hospitalisation, childcare costs, transportation, coverage for diseases you may be more susceptible to based on your family's medical history, etc. and protects you against a wide range of medical issues. Take into account your needs, compare plans based on benefits and pricing, and exercise some due diligence to select a plan that meets your criteria.

Affordability is an important aspect

It is a smart move to purchase a health insurance plan that covers all major illnesses at an affordable rate at first to make sure you are comprehensively insured and the costs don't dig a hole in your pocket.

Make sure you pick a policy with more network hospitals

Always choose an insurance company with a bigger network as you would be able to get cashless treatment at an empanelled/ network hospital. A lot of insurance aggregators have tie-ups with tier-1 and tier-2 city hospitals, so ensure you thoroughly check the network hospitals they have under their belt.

Ensure that the company has a high claim settlement ratio

The percentage of claims settled by the insurance company relative to all claims received is known as the claim settlement ratio. Always pick an insurer with a high ratio of claim settlement. This ensures more trustworthiness and authenticity of the insurance provider.

Best Health Insurance plans in India

To help you decide on the best option, here are some of the best health insurance plans in India. Go through them all, and pick the one that best suits your healthcare needs and your budget:

Summing up

To protect oneself from unforeseen health risks is the aim of a health insurance policy. Changing health conditions, the standard of living and rising medical costs have opened the way for more health disorders, stressing the importance of having a health insurance policy. So, it’s important that you get a cover as soon as possible as these rainy days come without any warning.

FAQs

What is health insurance, and why do you need it?

Health insurance is a type of insurance protection that covers the insured's medical costs. Health insurance can either pay the healthcare provider directly or compensate the insured for costs related to illness or injury.

Who needs health insurance?

Health insurance is necessary for everyone if they don’t want to bear the cost of exorbitant medical treatments. It helps to manage the hospital bills and other medical expenses in times of medical emergencies.

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