The cost of medicines and hospitalisation charges are soaring high every year. A sudden healthcare emergency can put pressure on your pocket. By purchasing a health insurance policy, you can enjoy financial freedom from hefty medical bills.
Read on to know more about health insurance definition and how it can benefit you.
What is health insurance? – Meaning and definition
A health insurance policy offers financial support in the event of a medical emergency. It is a contract between the policyholder and the insurance company that covers medical expenses arising from illness, injury, or accident. Policyholders pay regular premiums, and in return, the insurance plan covers various medical services, including hospitalisation, surgeries, medications, and preventive care. Health insurance aims to alleviate the financial burden of medical treatments, promoting access to necessary healthcare services and contributing to overall well-being.
Therefore, you must know what is health insurance properly before buying it. Check the eligibility criteria, coverage amount, and inclusions/exclusions of the policy. It will help you make full use of the policy during medical emergencies.
Who needs health insurance?
Health insurance is essential for everyone, providing financial protection against high medical costs. It is particularly important for individuals with chronic conditions, families with dependents, and those who seek to mitigate the risk of unexpected health expenses.
Different types of health insurance policies
There are various types of health insurance policies designed specifically to cater to individual requirements. These policies cover a range of medical expenses. Here’s the list of the different health insurance explained in detail.
Individual health insurance
Individual health insurance covers the medical expenses of an individual. This type of health insurance policy covers the specific needs of the individual or the policyholder. It covers all kinds of medical expenses, including hospitalisation, medical tests, surgeries, and doctor visits. Additionally, it allows individuals to customise the policy as per their healthcare needs and budget.
Family health insurance
Family health insurance or a family floater health insurance designed for families work in group policy manner. It offers a single policy for the entire family, making it convenient to manage and save money compared to individual policies for each family member. The sum insured in the policy is distributed among all the enrolled members.
Senior citizens health insurance
Senior citizens health insurance specifically provides coverage for individuals above the age of 60 years. Health insurance for senior citizens covers pre-existing conditions and provides cashless hospitalisation benefits. It also offers higher coverage for specific medical conditions that may arise due to age. You also get coverage for critical illnesses.
Maternity health insurance
Maternity health insurance covers the medical expenses of childbirth and pregnancy-related complications. It offers coverage for prenatal and postnatal expenses, delivery charges, and newborn baby expenses. It also offers cashless hospitalisation and covers any unforeseen medical emergencies.
Critical illness health insurance
Critical illness health insurance, as the name suggests, covers medical expenses for critical illnesses such as cancer, stroke, heart attack, and other life-threatening illnesses. It provides a lump-sum amount to the policyholder if diagnosed with a critical illness for the treatment and diagnostic tests expenses.
Group health insurance
Group health insurance covers the medical expenses of a group of people, such as employees of a company or members of a society. Many employers offer group health insurance as one of the major employee benefits to the employees. This type of policy offers coverage for hospitalisation, medical tests, surgeries, and doctor visits, among others.
Top-up health insurance
Top-up health insurance provides additional coverage over and above the existing health insurance policy. It covers the medical expenses that exceed the sum insured in the existing policy.
Benefits of a health insurance policy
You get the following benefits on a health insurance policy:
- The policy covers your in-hospitalisation and pre-and post-hospitalisation expenses up to a pre-determined amount.
- Apart from hospitalisation expenses, you also get coverage for treatments taken at home and daycare procedures.
- You get tax benefit for the premium paid towards the health insurance policy.
- You can enhance your health insurance policy with add-on covers. You can add critical illness cover, OPD care, hospital cash cover, and more to get complete financial security.
- You can restore the sum insured with the sum reinstatement benefit. This benefit comes to help when you have exhausted the sum insured during a policy year.
- Some health insurance policies also offer compensation in case of income loss due to accidental disability.
How does health insurance work?
The process starts with the policyholder paying a premium to the insurance company based on factors such as age, health history, lifestyle habits, etc. Once the policy gets active, it covers medical expenses such as hospitalisation, surgeries, medical tests, and consultations expenses.
You can choose a cashless hospitalisation or reimbursement of the medical expenses incurred. For cashless hospitalisation, you only need to visit the insurer’s network hospital to avail the treatment. The insurer will take care of the hospital bills directly, and you do not have to worry about any immediate payment to the hospital. For reimbursement claim, you need to first pay the hospital bills and submit the relevant documents to the insurance company for reimbursement.
However, it is important to note that every policy has certain limitations and exclusions, which the policyholder should know. Additionally, the policyholder should regularly review their policy to ensure that it caters to their evolving healthcare needs.
Why should I purchase a health insurance policy?
Purchasing a health insurance policy is essential for safeguarding your financial well-being and ensuring access to quality healthcare. It provides a safety net during medical emergencies, covering the high costs of treatments, hospitalisations, and medications. By having a health insurance policy, you can focus on recovery without the added stress of financial burdens.
- Financial protection:
A health insurance policy provides a financial cushion during medical emergencies by covering the high costs of treatments, surgeries, and hospitalisations. Without insurance, medical expenses can quickly deplete savings, leading to financial strain. Insurance ensures you’re protected from unexpected healthcare costs. - Access to quality healthcare:
With health insurance, you have access to a broad network of hospitals and doctors, ensuring timely and appropriate treatment. It enables you to choose better healthcare facilities and specialists without worrying about immediate costs, leading to improved health outcomes. - Cashless treatment:
Many health insurance policies offer a cashless treatment option, allowing policyholders to receive medical care without making upfront payments. The insurance provider directly settles the bill with the hospital, making the process convenient and stress-free during emergencies. - Tax benefits:
Purchasing health insurance not only safeguards your health but also helps reduce taxable income. Under Section 80D of the Income Tax Act, you can claim deductions on premiums paid for yourself, your spouse, children, and even dependent parents, providing financial savings.
