How Health Insurance Works in India?

Hеalth insurance is somеthing many pеoplе havе hеard about. It’s oftеn discussеd, and pеoplе givе advicе basеd on thеir еxpеriеncеs. But not еvеryonе knows how it rеally works or how to choosе thе right onе for thеmsеlvеs and thеir family.

Today, wе’ll lеarn morе about hеalth insurancе and undеrstand thе diffеrеncе bеtwееn hеalth insurancе and mеdical insurancе, why having hеalth insurancе is important, and how to pick thе bеst plan for you and your family.

What is Health Insurance?

Hеalth insurancе hеlps you with monеy whеn you nееd mеdical hеlp. It pays for things likе going to thе hospital, sееing a doctor, getting an ambulance etc. Hеrе’s how it works, the policyholder makes a dеal with a hеalth insurancе company. He/she pays thеm somе monеy rеgularly, callеd a prеmium. In rеturn, thеy promisе to hеlp policyholders or insured by paying for their hеalthcarе costs.

Thе amount they pay dеpеnds on things likе agе, gеndеr, and their hеalth. If they’rе oldеr or havе hеalth problеms, they might pay morе. But it’s a way to makе surе the insured can gеt mеdical hеlp without worrying too much about monеy.

How is Health Insurance Different from Medical Insurance?

Most of us often get confused with these terms. In fact, we sometimes use it interchangeably, but that should not be the case. Health and medical insurance are two different things that have only one similarity i.e. both of them provide financial assistance to the insured in time of need.

Health insurance offers extensive coverage for various health conditions whereas in medical insurance limited and pre-defined coverage for specific health emergencies is provided. Medical insurance is comparatively affordable and the sum insured amount is confined to Rs. 5 lakhs which is okay for small health emergencies, no add-on cover or riders can be added under this. Medical insurance also includes group mediclaim insurance that many employers provide to their employees as an additional benefit. 

There is no set sum insured amount like in medical insurance, it is flexible and dependent on the insured or the policyholder to select the best health insurance policy suitable for them. In health insurance, the insured can additionally include add-on covers and riders as well.

How Does Health Insurance Work?

Health insurance provides peace of mind to its insurers or policyholder as they don’t need to worry about the burden of unanticipated medical expenses. There are various types of health insurance policies and plans that are available in India but the basic working remains the same. The following are the steps that are involved in the working of health insurance:

• Selecting health insurance is the first step; this is where your actual insurance journey begins. It is important to access the needs and financial limitations of the policyholder and then select a suitable policy and premium. The insurance company may or may not ask you to get a health check-up done depending on your age and health conditions.
• After the sum insured and premium amount are selected, the premium needs to be paid at regular intervals for a period of time to leverage the benefits of health insurance. The more premium, the better the coverage.
• In case of medical emergencies say a disease; the insured can claim the health insurance anytime after the waiting period is over i.e. if the medical emergency is covered under the policy or plan opted for.

Benefits of Health Insurance

Health and medical emergencies are unforeseen things; one can’t plan on falling ill. So having proper health insurance helps a lot. Here are a few benefits of having proper health insurance.

1. Protection for you and your family

   Health insurance acts as protection for you and your family. There are various types of health insurance policies and plans. You can either buy an individual plan for yourself or get a family floater to cover your entire family. A proper analysis can help you decide on which plan to opt for and what will give you overall coverage.

2. Reduces Stress

   Having health insurance helps the insured be stress-free. A sudden medical emergency won’t stress you out that much as you would already have health insurance that is already covering you. The insured can easily focus on getting better rather than focusing on the medical bills.

3. Doesn’t Have an Impact On Savings

   Since a premium is paid at regular intervals over a period of time, the finances of an unfortunate medical emergency won’t drain your pockets all at once.

4. Tax Benefits under 80D

   The government of India offers tax benefits to promote the buying of health insurance under Section 80D of the Income Tax Act, 1961. The tax deductions are given on the premiums that the insured pays.

5. Lifetime Renewability Benefit

   According to the Insurance Regulatory and Development Authority of India (IRDAI), all insurance companies must offer a renewability benefit throughout the life of the insured. It allows the insured or the policyholder to renew their health insurance policy without any age limit or upper restriction.

Conclusion

Before opting for health insurance or medical insurance it is necessary to know the difference between them. Health insurance is a financial agreement between the policyholder and the insurance provider. The policyholder needs to pay regular premiums to get coverage for their medical expenses. The major difference between health insurance and medical insurance is the coverage. Medical insurance focuses on specific kinds of emergencies only whereas health insurance gives comprehensive coverage. Health insurance comes with a range of benefits such as lifetime renewability, tax benefits etc. So, before selecting health insurance or medical insurance, access your and your family’s needs.

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