What is health insurance? The increasing effect of environmental pollution on our lifestyles has led to the rise of various health-related problems, and serious diseases have become more common. Health insurance can help those who are not financially capable of getting medical treatment. It can prove helpful in handling one-time expenses for your treatment whenever the need arises. Today, through this post, we will understand what health insurance is and its benefits.
What is health insurance?
Health insurance is an insurance policy that pays for the expenses incurred in the treatment of any disease. These expenses include all kinds of medical care and needs, from hospitalization to doctor’s consultation fees, tests and medicines, nursing and care expenses, etc.
How is the payment of treatment decided? In the case of health insurance, the amount of payment after treatment can be determined by the insurance company according to the conversation with the hospital and doctors. Payment can be made in two ways: you can pay the cost of the treatment yourself first or the insurance company can give its reimbursement later after receiving your bill. Alternatively, the insurance company can pay the hospital directly for your treatment.
Types of Health Insurance Policy
There are many types of health insurance plans available in India.
Hospitalization Plans – These plans pay for treatment expenses, and a pre-fixed amount is paid by the insurance company out of the expenses incurred on the treatment of the insured person. Such insurance plans are called indemnity plans. They can be availed for the treatment of any type of disease or health problem. In the case of some life-threatening diseases, the benefit of the health insurance policy is available only once. But most diseases can be treated multiple times and can be availed up to the limit of the insurance policy.
Critical Illness Plans – These plans provide a lump sum amount on the identification of certain critical diseases, and the process related to their treatment. These diseases are very fatal, such as heart attack, cancer, paralysis, etc. Their treatment is very expensive. Which diseases are included in your health insurance policy is decided in the beginning. Your policy is made according to the severity of the disease and its recurrence. These are benefit-based health insurance plans.
Individual or Family Plans – You can buy a bundled family health insurance policy for your entire family. As per the insurance coverage decided, the treatment of any member of the family can be helped, and its premium is cheaper. Or you can also take these visual health policies for different family members. For example, if there are 5 members in a family and an insurance benefit of ₹ 100000 is purchased separately for each person, in such a situation, no one member of the family can get more than ₹ 100000 for themselves. This different type of policy will work for all the three persons. But if this plan of 300000 is taken as a family health plan, then any member can get help up to ₹ 300000. However, all the members together cannot get more than three lakh assistance.
Daily Pay Plans – In the Daily Cash Benefit Plan, you are given a fresh amount on a daily basis during the course of treatment. No matter how much the cost is more or less at the time of your admission. For example, if a person has bought a defined benefit policy of Rs.1500 and is admitted, ₹ 2000 is being spent daily on their treatment, then they will only get help based on ₹ 1500. On the other hand, if they are facing an expenditure of Rs.100, they will get the assistance of Rs.1500.
What are the benefits of health insurance?
Health insurance helps you in the form of covering medical expenses for the treatment of sudden critical illnesses. Apart from this, there are many other reasons that make health insurance essential for you.
- Solution to increasingly expensive treatments
With decreasing physical labor activities and increasing dependence on technology, people have started falling sick more often. Medical costs for new diseases are also rising rapidly, with consistent double-digit growth (above 10 percent) in recent decades. While the prices of food and other essential items of life have increased only by units (between 0 and 9 percent). The cost of treatment and medicines is beyond the capacity of a normal person at any time. In such a situation, having health insurance comes as a great help.
- No lump sum payment burden
It is not easy to raise a lump sum amount for the treatment of a person who suddenly becomes ill. Especially for the elderly, it is even more important because with increasing age, the risk of diseases increases. Health insurance is the solution to such medical emergencies or health-related problems. Small amounts deposited in the form of premiums are very helpful in dealing with lump sum expenses in the form of sum assured.
- Cashless treatment facilities are also available
Almost all major insurance companies provide cashless treatment facilities. This means you can get admitted to the hospital without paying anything, and start your treatment. Later, the insurance company reimburses the cost of your treatment. However, this payment is subject to the terms and conditions given in your insurance policy
You have to pay income tax, etc. on medical expenses for your family or yourself. Tax exemption is available under section 80D if you have purchased a health insurance or medical insurance policy. Therefore, you will receive a tax exemption on your premium payment.
According to mediclaim insurance, treatment facilities are available only during hospitalization. Pre-hospitalization expenses, post-hospitalization expenses, and other expenses have to be borne by the insured person. That’s why companies often provide mediclaim for their employees and not health insurance.
On the other hand, health insurance provides comprehensive coverage, including hospitalization, pre-hospitalization expenses, and post-hospitalization expenses. It covers more than 30 serious diseases in addition to common illnesses.
So, this was our information for today in which we have explained the health insurance plan in detail. We have also provided other useful information related to insurance and money. We hope that you found this information helpful.
If you have any questions related to this post, feel free to ask us by commenting below. We will be happy to help you.