Even the healthiest of individuals can fall sick without warning and require expensive medical treatments. In such a scenario, being financially unprepared to tackle the costs of the necessary medical procedures is not an option. This is where comprehensive health insurance plans come into play, to ensure the financial comfort of your family and you. Here is an in-depth look at this handy financial tool that has helped many individuals heave a sigh of relief in their hour of need.
What are health insurance plans?
Health insurance plans reimburse insured customers for their medical expenses, including treatments, surgeries, hospitalisation and the like which arise from injuries/illnesses or directly pay out a certain pre-determined sum to the customer. A health insurance policy offers coverage for any future medical expenses of the customer.
This is an agreement between the insurance company and the customer where the former agrees to guarantee payment/compensation for medical costs if the latter is injured/ill in the future, leading to hospitalisation. In most cases, insurance companies have tie-ups with a network of hospitals, thereby ensuring cashless treatment for patients there.
What is the need for health insurance?
Here is why you need health insurance:
- Health insurance covers future illnesses/medical treatments without depleting your savings or negatively impacting your family’s financial future
- Medical costs are increasing rapidly and for those with insufficient savings, affording medical care becomes a problem during emergencies
- Cashless treatment is possible within network hospitals, while reimbursements are given by insurance companies in other cases
- Health insurance plans offer coverage against several types of ailments and surgeries, along with other aspects of medical treatment
- Health insurance keeps you and your family worry-free; you only have to pay an affordable premium for the same
- In many cases, you also get coverage against hospitalisation costs, ambulance costs, consultations, medicines, tests and post-hospitalisation expenditure
What are the kinds of health insurance plans available?
There are several kinds of health insurance plans. Here are the main ones:
- Individual plans are basic health insurance plans, covering the hospitalisation costs of the person insured
- Family plans are health insurance plans where all family members can be included in a single coverage model. In this case, a fixed sum assured is provided to any family member who falls ill
- Senior citizen plans are special insurance policies designed to meet the needs of senior citizens who are above 60 years of age
- Critical illness insurance plans these plans cover specific critical illnesses such as kidney ailments, heart attacks and so on. Cancer insurance and other plans are included in this section as well.
- Personal accident insurance these plans offer coverage for hospitalisation in case of any motor accident
- Maternity plans these policies offer coverage for pre and postnatal medical care and delivery expenditure. They also offer coverage for the new-born for a certain duration along with ambulance costs
- Unit-linked health insurance plans these plans offer health insurance coverage while also helping build savings to meet those costs which do not have coverage under the policy. These are insurance-cum-investment plans that help you accumulate a corpus
How to choose the right kind of Health Insurance for yourself?
- Right Coverage: Make sure your health plan covers a wide range of medical problems and can help you avail of various pre and post-hospitalisation benefits. If the health insurance you have bought is for your family, it is necessary to make sure that it covers the needs of all the family members
- Suits Your budget as much as the health plan must meet your needs, it is equally important that it also suits your budget. As your income increases, and the size of your family, as well as requirements, change over time, the plan can further be reviewed accordingly
- Individual Plans Or Family Plans: According to your status, select an individual or family health plan. If you have a family who needs your support, opts for a family health plan to reap maximum benefits at a comparatively low cost
- Lifetime Renewability: It is important to know the term for which the policy would cover you. After all, one is more likely to require medical facilities at a later stage in life, as we approach old age. Therefore, a plan which offers lifetime renewability would be more beneficial
- Preferred Hospital coverage is always better to choose an insurance provider that has a wide network of hospitals included in its list. One should also check if the hospitals one prefers are included in the list or not
- High Claim Settlement Ratio: It is advisable to choose an insurance provider with a higher claim settlement ratio. The claim settlement ratio is the number of claims settled by the insurance provider over the total number of claims received
Key Benefits of Health Insurance Plans
There are several benefits offered by health insurance plans, including the following:
- Coverage for pre and post hospitalisation expenses insurance policies usually offer coverage for expenses both before and after hospitalisation up to pre-specified durations/limits
- The cashless facility you are getting treated at a network hospital, you can get hassle-free cashless treatment under your insurance plan
- Ambulance and transportation cost ambulance charges and other transportation costs of the person insured are also covered under health insurance policies
- No-Claim Bonuses These bonuses are earned by the person insured if no claims are filed for treatments in a particular year
- Room rent coverage Room expenses are also covered by insurance policies and this is dependent on the premium paid by the customer
- Medical check-ups Insurance policies also offer coverage for periodic health check-ups. Some companies even offer free check-ups based on earlier no-claim bonuses
- For tax benefits, you can get a deduction of up to Rs. 25,000 from taxable income of health insurance premiums paid under Section 80D of the Income Tax Act. The maximum deduction limit for senior citizens is Rs. 50,000.
Why should you buy Fixed Benefit Health Insurance plans?
- Lumpsum Payout- Fixed benefit health insurance plans pay out a lump sum# amount upon diagnosis of any disease/ailment covered under the same. This helps you take care of treatment and other costs right from the outset without financial worries. Payouts are made irrespective of the cost of treatment
- No Worries of Sub Limits- Many health insurance plans come with sublimity in terms of room rent, hospitalisation expenses and so on. With fixed benefit health insurance plans, you receive a lump sum payout upon diagnosis of a particular illness without bothering about sub-limits and so on
- No Hospital Bills Required- Unlike other health insurance plans, fixed benefit health insurance plans pay upon diagnosis of the illness without the hassle of submitting hospital bills
- Get treated anywhere in the world- Since you get a lump sum payout upon diagnosis, you need not be admitted to a network hospital for cashless treatment. You can opt for treatment anywhere in the world as per your preferences and convenience
- Affordable and fixed premiums- You can get higher coverage for affordable premiums. Premium amounts also remain fixed for the entire duration of the policy.
- Tax Benefits- You can avail of tax benefits* under Section 80D of the IT Act on the premiums you pay on these policies. The maximum amount of deduction from taxable income is Rs. 25,000 for you and your family (children and spouse) if you are less than 60 years old. If you are all more than 60 years old, the maximum deduction can increase to Rs. 50,000. The same is applicable for premiums that you pay for your parents, i.e. a maximum deduction of Rs. 25,000 if they are below 60 years of age and Rs. 50,000 if they are above 60 years of age.
Why should you buy Health Insurance online?
- safety insurance companies have made all the information available online. One can easily compile the same under one platform. It is always better than the policyholder selects. As well as compares all the plans so that they can select the one that best suits their needs
- Affordability Online health insurance plans are more cost-efficient than offline ones. This is because of the no-involvement of agents and the policyholder can directly connect with the insurance company to buy the insurance
- Flexibility Online channels offer more flexibility to policyholders than offline channels when it comes to buying insurance plans. Sitting in the comfort of our homes, one can compare and select different policies that suit one’s needs.
Why Buy a Health Insurance Plan at an Early Age?
- One can avail of lower premiums as the premium amount is usually determined based on the current age. As well as the health status of the policyholder, by insurance providers
- Moreover, One can enjoy tax* benefits for a longer duration. One can claim the premium deducted from the income under Section 80D of the Income Tax Act, 1961
- Insurance providers exclude pre-existing conditions. As you grow older, you are more likely to have such conditions. Moreover, if you buy a policy then, it won’t cover them
- As a young person, there are lesser health problems at the onset. This reduces the chances of the health insurance policy getting rejected
- Along with better coverage, buying insurance at a young age helps in better financial planning. If the health aspect is taken care of, one can think of making other financial investments as well
- We are trapped into sedentary lifestyles from a very young age, which lay the foundation of many critical illnesses. In such times, it becomes more important than ever to have a health insurance policy to keep one covered.