Health insurance is a common term that everyone would have heard of at least once in their lives. People tend to talk about it, discuss it and often give advice as to which one is better based on their experience. Not everyone is aware of how it exactly works and how to select the best health insurance for yourself and your family.Â
Today, we’ll gain a little knowledge on health insurance, how it is different from medical insurance, why one should have it and how to select proper health insurance for yourself.
health insurance offers its policyholders (insured) financial assistance against their medical treatment and related spending such as pre and post-hospitalization expenses, room charges, doctor’s consultation fees, ambulance charges, critical-illness-related expenses and more.
Health insurance is an agreement between the insured and health insurance company where the insured pays a certain fixed amount called a premium to the insurance company at regular intervals and in return the insurance company or the insurer guarantees to offer financial healthcare coverage. The premium is decided depending on various factors such as age, gender, lifestyle, pre-existing illness and so on.
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.
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.
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:
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.
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.
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.
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.
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.
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.
With the lifestyle that we have and the rising number of diseases and viruses, it is fitting to have proper health insurance for you and your family. In order to opt for proper health insurance that suits your and your family's needs, it is important to know how health insurance exactly works.
Naval Goel is the CEO & founder of PolicyX.com. Naval has an expertise in the insurance sector and has professional experience of more than a decade in the Industry and has worked in companies like AIG, New York doing valuation of insurance subsidiaries. He is also an Associate Member of the Indian Institute of Insurance, Pune. He has been authorized by IRDAI to act as a Principal Officer of PolicyX.com Insurance Web Aggregator.