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About Health Insurance

What is Health Insurance?

Health Insurance provides financial cover to an individual or family in the event of medical conditions which require treatment in a hospital or as defined/permitted under the terms of a specific health insurance policy

Why should I buy health insurance?

It is very important to cover for unexpected ailments, injuries or health conditions which require medical attention since these unexpected and unavoidable expenses can cause significant strain on your financial budget. It has been observed that at times individuals or households end up spending all of their savings on a sudden medical condition. Health insurance allows you and your family to relax in such events by providing financial assistance when it is needed the most Medical costs are rising year on year. Inflation in medicare is higher than inflation in food and other articles. While inflation in food and clothing is in single digits, medicare costs have been rising at double digits. For eg, the cost of heart surgery today could vary in the region of Rs 1.5 lakhs to Rs 3 lakhs.

Estimates reveal that a heart surgery performed today @ Rs 2 lakhs will cost over Rs 3.22 lakhs after 5 years. After 10 years it will be Rs 5.19 and Rs 8.35 lakhs after 15 years.

Also, other high risk and critical diseases like cancer etc  require very expensive treatment for long durations. The person affected is also not able to work in many such cases and hence the double impact of losing ability to earn and having to spend on medical care destroys the entire financial health of an individual and also families

One way to provide for health-related / medical emergencies is by taking health insurance. Health insurance offers considerable flexibility in terms of disease / ailment coverage. For instance, certain health insurance plans cover top critical illnesses and over 100 surgical procedures. The insurance plan disburses the payment towards surgery/illness regardless of actual medical expenses. The policy continues even after the benefit payment on selected illnesses.

With health insurance, you are assured of a secure future both health-wise and money-wise. This makes health insurance critical for individuals, especially if they are responsible for the financial well-being of the family.

Types of Health Insurance plans

1. Mediclaim Plan

Mediclaim or hospitalisation plans are the most basic type of health insurance available. They cover the cost of treatment upon hospitalization. The payout is made on actual expenses incurred in the hospital by submitting original bills. Most of these plans cover entire family up to a certain limit in case of plans which cover the entire family- Family Floater Health Insurance. The payout can also be made without having to pay out of pocket and reimburse later by availing Cashless claims in hospitals which are part of the network for an insurance company.

2. Critical Illness Insurance Plans

Critical Illness Insurance Plans cover a set of specific life threatening diseases.  Since these diseases could require prolonged treatment or even change an individual’s lifestyle, payout is made upon diagnosis of a Critical illness itself commensurate to the policy cover. This allows  flexibility to use the monies for changing lifestyle, medicines and as substitute for income for the time you could not resume work due to illness. 

What to consider when buying a Health Insurance plan?

Health Insurance plans should be selected carefully since the actual benefits offered under the plan should satisfy all needs of a customer.

Some of the important aspects to consider are the following:-

  • Whether to buy Individual or Family covers-  When buying for yourself alone, the cover provides facilities basis an individual’s profile and hence may look more attractive. However, in a family a Family floater cover which offers the same amount of coverage to all members also works very well. It also comes at a lower cost as compared to individual plans. Eg, a family of 4, if buys individual plans will spend more as compared to buying a family floater for all 4 together.
  • Start early- One should always have a health cover. Buying early ensures that you make a history which can allow you to get discounts on premium in future
  • Check diseases covered- This is one policy that you should actually read very carefully. Most health insurance policies have a set of covered and not covered set of diseases. One mist ensure that you choose the one which offers maximum coverage at optimum cost
  • Cashless network- It is important to evaluate the network of hospitals which an insurer offers so as to ensure maximum possible cashless coverage
  • Waiting period- Some policies have clearly defined waiting periods for specific diseases, one must note the same to avoid confusion in future
  • Fine print like Room rent, Co-payment clauses- Most policies define minimum Co-payment (the one that one needs to pay in case of a claim) and caps of room rent etc. One must look at them carefully.

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