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All About Health Insurance

Health Insurance:

Health insurance covers cost of an insured individual’s medical and surgical expenses. Subject to the terms of insurance coverage, either the insured pays costs out-of-pocket and is subsequently reimbursed or the insurance company reimburses costs directly.

TYPES OF HEALTH INSURANCE PLANS:

 💡 Reimbursement (Indemnity) based health insurance plans

The most popular form of health insurance in the market, reimbursement based health insurance plans more commonly known as “mediclaim”. These plans reimburse you for any expenses incurred in the event of hospitalisation and also cover expenses associated with diagnostic or screening requirements before hospitalisation or post hospitalisation treatments. 

a. Individual Health Insurance Plan – Individual health insurance covers a single person; it is usually a person who is paying the premium. Under this, the chosen sum insured covers only one individual insured under the plan against various disease and illnesses.

Moreover, one can also enrol family member(s) for coverage by choosing different sum insured to be applicable to each individual insured member. 

b. Family Floater Insurance Plan: Tailor made for families, it acts as an umbrella to give coverage against the health risks.

Under this, a fixed sum insured is available for any or all the members insured for one or more claims during the tenure of the policy. Thus, if one of the insured member falls sick and needs hospitalization, the (total) sum insured of the policy can be utilised by him/her.

A family may include individual, spouse, dependent children and in some cases, parents and parents-in-law. 

💡 Fixed benefit hospitalisation plans

A new breed of health insurance plan first offered by Life Insurance companies and later offered by all insurance companies, these plans offer fixed benefit pay-outs on the occurrence of some well-defined diseases/illnesses or hospitalisation occurring. These plans not only attempt to partly cover costs associated with hospitalizations but also in some cases act as an income substitute.

Critical illness plans:These plans offer a fixed lump sum benefit in case of a critical illness occurring, the critical illness or disease covered would be as the list defined under the plan. Today critical illness plans covering 6 t0 39 critical illnesses depending upon the product offering them. The lump sum benefit offered by this plan covers not only cost but also acts as an income supplement or takes care of out of hospital treatment. 

Hospital Cash/Surgical benefit plans:These plans offer fixed pay-outs in case of defined hospitalization events which may include admittance to the hospital, daily stay- recuperating benefit in case of prolonged stay and also lump sum pay-outs for a listed surgery. As the pay-out is a defined pay-out depending upon the listed event occurring the plan accepts copies of bills. 

Why you should buy health insurance?

  1. Increase in the incidence of lifestyle-related illnesses

Life expectancy has increased. Thanks to advancement in medicines, the average man is likely to live for around 84 years by 2040. And so has stress due to sedentary lifestyle.

This has also given rise to the early onset of chronic diseases like cancer, lung conditions and stroke, claiming younger lives. Health insurance mitigates the financial risk that may befall a person irrespective of age.

  1. Health insurance coverage is more than just hospitalization

Most/Many health insurance plans give coverage for day care procedures and OPD, other than the treatments that involve serious hospitalization. There are also health plans that cover vector borne diseases like dengue.

  1. Increase in out-of-pocket expenses

with the healthcare industry in India witnessing double-digit inflation, it is getting extremely expensive to treat common ailments in India. As a result, this has put a dent in an individual’s pocket.

Buying health insurance can double up as your emergency financial fund while preparing you for the troubled times.

  1. Your group health cover may not be sufficient

A group health plan may or may not cover all your family members. The sum insured limit in a group plan is also less, which may not be enough to meet all the medical expenses incurred.

And then as you’ll grow older, you might need frequent medical attention. Before that you may not want to put yourself at the risk of being under-insured.

Key factors to consider for Health Insurance:

Here are few factors that can help you decide how to select the best health insurance plan-

1. Buy health insurance when young and healthy

Health risks increase with growing age.

Younger you are, lesser will be the amount of premium- An individual’s age is the major deciding factor for the calculation of health insurance premium.

2. Take advantage of the waiting period

Nearly all health insurance policies has a waiting period for 2-3 years for certain pre-existing diseases.

When you buy a health insurance cover early in life, you can easily take advantage of the waiting period rather than serving it at a later stage when your health risks may have increased substantially. 

3. Understand limits and exclusions

Sub-limits: Most health plans have sub-limits on room rent, surgeries, ICU charges, operating charges and other medical procedures. Opt for policy without sub-limits; it may have a higher premium; it is much better option in a long run.

Co-payment: Under co-payment, the policyholder bears a pre-defined percentage of the claim amount while the rest will be settled by the insurance company. While you may find the insurance plan to be quite cheap, it may not offer you compete coverage.

4. Choose a policy with no sub-limits

When you opt for a health insurance plan, you should be sure that the plan has no disease specific or expenditure specific sub-limit. In few cases, you may find such plans to be expensive but they will help you to evade greater financial risks as well as provide you with the freedom to opt for efficient medical treatment, that too at the best health care provider. A policy with no sub-limits will help you avoid unpleasant situations at the time of claims.

5. Choose adequate sum insured

Consider all your personal priorities and liabilities, before you buy a health insurance policy to make an informed choice.

Choose the policy that is in line to your by giving due consideration to factors like your age, age of all your family members, increased health care costs, etc.

6. Fill up the proposal form yourself

Most questions asked in a proposal form personal in nature. Thus, in order to give the right piece of information, one should fill up the proposal form first-hand.

Furthermore, for the insurer to be able to underwrite the policy in an appropriate manner, it is required all the details furnished are correct and true. You should never hide any information or overwrite on the proposal form. Inadequate information or exclusion of medical conditions during the proposal time can lead to issues of delayed or non-payment of claims during times of need. 

7. Hospital network of the insurance company

While selecting the right health insurance plan, review the list & details of the hospital network of the insurance company. An insurer with an extensive list of hospitals in its network across cities should be your prime criteria of selection.

8. Understand your health insurance need well

Consider if you want to buy individual policies for all family members or a family floater policy for all.

For a young nuclear family, it is better to opt for a family floater policy that extents coverage to two adults and two children.  Compared to individual plans, family floater come at a marginally incremental premium. 

9. Claim limitation related to treatment

Carefully note the treatment-respective limits in your health insurance plan. Certain policies cap the amount you can claim for a particular surgery. Such limits would restrict your claim, even if there is a large sum insured under your policy.

10. Opt for additional coverage

Add on covers like Maternity Cover, Critical Illness Rider can be bought along with standard health insurance plans to give additional coverage for your specific needs.

11. Clearly read and understand the policy wordings 

It is of utmost importance that you read the policy wordings and other documents carefully so as to reap maximum benefits from your respective health insurance policy. Every health insurer provides a policy wording document that contains details about the policy. It will help you gain a thorough understanding of the claim process, document requirements, payment options, special conditions, coverage and exclusions.

12. Gradual increase in sum insured 

In the present days, when medical inflation is rising at a rapid scale, as a precautionary measure, it would be best to keep on enhancing the sum insured of your health insurance plan from time to time. You should also compare various policies available from an insurer. You can also speak to your insurance advisor to know what is the apt sum assured for you and your family.

13. Clear all your doubts before taking the final decision 

Before making the final decision of buying a health insurance policy, you should read all your policy documents once again. Turn to your insurance advisor or the insurance company and ask as many questions as you can to clarify all your apprehensions. It will clear any confusion or doubts that may exist. 

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