What is Health Insurance?
Health insurance (also called medical insurance) is a type of insurance policy that provides financial assistance to the policy holder for hospital expenses incurred at the time of an illness or accident. It is a contract between the insurance company and the customer.
In which the insurance company promises to pay all the medical expenses incurred by the policy holder. The policy holder has to make a regular payment to the insurer in return for a certain sum.
In a health insurance policy, policyholders can also include their family members in the same policy. With this, all members will be able to get the payment cost and benefit amount.
Under health insurance (medical insurance), medical expenses can be obtained by the insurance company in two forms: –
Insurers can choose cashless treatment for medical expenses in which the company pays directly to the hospital. Or can get the reimbursement (paid in the hospital) from the insurance company by making self payment. According to the terms of the policy, for cashless treatment, it is necessary to get treatment in a network hospital as suggested by the company.
A health insurance policy offers many additional benefits in addition to all these benefits, which we will learn further in detail.
“Health insurance is a contract to pay for health care, which avoids full payment on medical services at the time of being sick or injured.”
Why do we all need health insurance?
At the present time, there is no need to explain why health insurance is so important for us. We all know that the whole world is facing an epidemic.
Due to which it becomes important to buy a health insurance policy even more for yourself and your family.
In today’s time, the cost of medical care, treatment for disease, hospital and medicines are becoming very expensive. If we talk about private hospital, then the services here are out of the reach of a normal person.
Once admitted to hospital, the accumulated capital of your entire life can be exhausted. And if the sick person is the main member of the household, then this situation can put the whole family in trouble.
By regular payment of a small amount with the help of health insurance policy, you can get rid of all these worries.
Who can buy a health insurance policy?
There is no doubt in saying that the health insurance policy has become as important to our life as the rest of the essential things that every person must have. Along with this, it is also suggested that it should be taken early in life. But to buy a health insurance policy, we have to fulfill certain terms or conditions of the company. We will talk about the same here.
The following are the qualifications required to purchase a health insurance policy: –
- Entry Age (Adult) – 18 to 65 years (Special plans are for 70 years and above)
- Entry Age (Children) – 90 days to 18 years.
- Renewal Capacity – Life-long renewal capacity (as per policy).
Health insurance policy benefits
We had initially discussed about health insurance and some of its benefits. Now we will know all the benefits related to health insurance policy in detail.
Health insurance policy provides cashless facility in which the insured does not have to pay for hospital expenses. Under cashless treatment, the insurer pays the hospital directly on your behalf. Its biggest advantage will be that you will be able to pay full attention to the treatment.
This will be of great help in case of your treatment and hospitalization as you will need to arrange funds during medical emergency. One thing to be noted is that for cashless treatment, it is necessary to get treatment in a networked hospital as suggested by the company.
Pre and post hospitalization expenses.
This facility of health insurance policy takes care of expenses before and after hospitalization (medical tests and medicines expenses). In this, the insurer pays all the expenses before and after certain days of hospitalization, which are related to the disease.
There is no doubt, that investing in a health insurance plan is always beneficial. On purchasing any insurance policy, you are responsible for receiving tax benefits and the same is also the case with a health insurance policy. On purchasing a health insurance policy, you will get a tax benefit for the premium under Section 80D of the Income Tax Act, 1961.
No Claim Bonus (NCB):
In the policy year in which the insured does not make any claim, the insurer offers a bonus amount to them as a discount. It is named No-Claim Bonus or NCB. This motivates policyholders not to file any petty medical claims.
NCB or No Claim Bonus can be availed at the time of renewal of the policy as a discount on the premium payable or an increase in the sum assured. At the time of renewal of the policy, you will need to check whether you are getting the no-claim bonus.
Free health check up:
To motivate all individuals towards a healthy life, health insurance companies sometimes offer free medical check-ups. Depending on the company and the type of policy you hold, you may be eligible for a free health check-up.
Organ transplant expense:
The cost of transplanting an organ is borne by the insurance company. Health insurance includes surgery expenses related to organ donation. However, post-surgery complications and medical testing are not included.
Restoration of Sum Insured (Restoration):
It is a matter of concern for many people that if someone in their family is seriously ill, what will happen if the insurance cover from their existing health insurance policy expires? In such a situation, to provide additional protection to the insured and their family, the insurance companies provide insurance benefits. The benefit of the Sum Assured Restoration is that once the Sum Assured is fully utilized, the insurance company will automatically restore the amount, for which you do not have to pay any additional cost for it. Generally, health insurance policies with restitution benefits are expensive as compared to general health insurance policies.
Whenever you plan to buy a health insurance plan, you should always look for this facility. It is important for you to go for a policy that provides protection for a very long time, especially during old age. This is why most health insurance plans come with lifetime renewal facilities. To keep your policy active, you must renew it at the end of each policy term.