1. What is Health Insurance?
Health insurance is an agreement whereby insurance company agrees to undertake a guarantee of compensation for medical expenses in case the insured falls ill or meets with an accident which leads to hospitalization of the insured. Generally, insurance companies have tie-ups with the leading hospitals so as to provide cashless treatment to the insured. In case the insurance company has no tie-ups with the hospital, they reimburse the cost of expenses incurred by the insured. The government also promotes health insurance by providing a deduction from income tax.
2. Importance of Health Insurance
Buying a health insurance policy for yourself and your family is important because medical care is expensive, especially in the private sector. Hospitalisation can burn a hole in your pocket and derail your finances. It will become even tough, if the person who brings in the money, is now in a hospital bed. All this can be avoided by just paying a small annual premium which would lessen your stress in case of medical emergencies.
A good health insurance policy would usually cover expenses made towards doctor consultation fees, costs towards medical tests, ambulance charges, hospitalization costs and even post-hospitalization recovery costs to a certain extent.
3. Benefits of having a Health insurance Policy
1. Cashless Treatment: If you are insured, you can get cashless treatments as your insurance company would work in collaboration with various hospital networks.
2. Pre and post hospitalization cost coverage: Insurance policy also covers pre and post hospitalization charges up to the period of 60 days, depending on the insurance plans purchased.
3. Transportation Charges: Insurance policy also covers the amount paid to ambulance towards the transportation of insured.
4. No Claim Bonus (NCB): This is the bonus element which is paid to the insured if the insured does not file a claim for any treatment in the previous year.
5. Medical Checkup: Insurance policy also provide options for health checkups. Free health checkup is also provided by some insurers based on your previous NCBs.
6. Room Rent: Insurance policy also covers room expenses depending on the premium being paid by the insured.
7. Tax Benefit: Premium paid on Health insurance is tax deductible under section 80D of the Income Tax Act.
4. How to Select the Right Insurance Policy
It’s difficult to select the best insurance policies as all insurance company provides a similar type of insurance plan. Hence some of the important points that any Person should look before purchasing any plans are:
1. Sum Assured
2. Minimum Entry Age and renewability clause
3. Room Rent Capping
4. Inclusion and Exclusion
5. No Claim Bonus
6. Other Benefits
5. Eligibility Criteria
In India, people under 45 years of age are not required to undergo a mandatory health checkup when obtaining a health insurance policy. They are, however, required to disclose any pre-existing conditions such as diabetes or hypertension. It is, therefore usually advised that one should get a health insurance when young so that the premium would be less.
