In today’s day and age of increasing hospitalization costs and high vulnerability to diseases due to pollution and bad food and lifestyle choices, having a health insurance plan is more important than ever.
Despite being one of the fastest growing economies in the world, our public healthcare system is in shambles. India’s healthcare budget as a percentage of GDP is quite low. First let us look at a few interesting statistics below.
|COUNTRY||WORLD GDP RANKING (2018)||HEALTHCARE SPEND (% OF GDP)|
Source: World Bank and PWC report
In terms of GDP, Nepal ranks 96th and Afghanistan 114th but their governments spend more on healthcare as a percentage of GDP compared to India, the 7th largest economy in the world. Though among the top ten economies in the world by size, India ranks only 56th on universal healthcare among 100 countries.
Around 5 crore Indians are pulled below the poverty line every year due to high medical costs, according to a WHO and World Bank report. More than half of all the people worldwide pushed into poverty due to out-of-pocket medical expenses are Indians.
Then there’s a double whammy. If absence of good and affordable public healthcare was not enough, more than 70% of the country’s population doesn’t have health insurance plans to mitigate the high cost of hospitalization at private hospitals and nursing homes. People are forced to seek financial assistance from family, relatives and friends, if available at all. Or they have to dig into savings, mortgage or sell their property, or even worse, fall prey to greedy moneylenders and loan sharks.
But if you have an individual health insurance plan, you have the financial protection to fall back upon in times of medical emergencies. What would you do if you are the sole earning member of your family and you fall sick? That is why it’s all the more important to get a health insurance policy.
Health insurance plans for individuals available at Finserv MARKETS start as low as Rs.198 per month and offer coverage up to Rs.50 lakh.
Benefits of health insurance policy
One of the best advantages of health insurance plans is the cashless benefit. You just need to inform your health insurance provider prior to or after a specified period of hospitalization, fill the authorization form with the third-party administrator (within the hospital premises) and you are done. You don’t pay anything unless your hospitalization costs exceed the sum insured limit. To enjoy cashless hospitalization, you must be undergoing treatment in a hospital or nursing home that is part of the insurance provider’s network.
Health insurance plans offer assurance of best healthcare services at a large network of 6000+ partner hospitals across India.
Pre and post-hospitalization expenses:
Depending upon the insurance provider, you can also get coverage on medical expenses that you have incurred before or after hospitalization, up to a period of 60 days. With a health insurance plan you don’t just get coverage for 60 days but 90 days after hospitalization. You don’t have to pay for expenses incurred 60 days prior to hospitalisation as well.
No claim bonus:
Similar to motor insurance, you can also enjoy NCB with health insurance. However, it works in two different ways here depending on the health insurance provider. Some insurance providers offer discount on premiums of your health insurance policy for every claim-free year. Others offer something called a cumulative benefit which increases your sum insured by a certain percentage for every year that goes without a claim.
If you don’t fall ill, you are either saving on your next year premium or increasing your sum insured for future years. So, it’s a win-win, either way. Individual health insurance offers cumulative bonuses to the insured with an increment of 10% to 100% on the base sum insured for every claim-free year.
Don’t forget the tax benefit. You can get yearly tax deductions up to an amount of Rs.25,000, if you are below 60 years, and 50,000, if you are above 60 years on health insurance premiums. These deductions are available under Section 80D of the Income Tax Act.
Things to watch out for in health insurance plans
Generally, if you are below 45 years it’s not mandatory for you to go through a health check-up to get health insurance. However, you will have to disclose any pre-existing conditions. It’s a good idea to get a health insurance cover early in your life so that your premium outgo is less. You should always check these factors before buying a health insurance policy:
- Sum insured
- Minimum entry age and renewability clause
- Room rent limit
- Inclusion and exclusion of diseases and expenses
- Type of no claim bonus
- Other additional benefits
Inflation in the cost of medical health care remains a key issue. An extended trip to the hospital can upend your financial portfolio significantly. Mitigation of risk is as important as investments that grow your money. In conclusion, a health insurance policy is an important part of your financial portfolio because of its role in mitigating risk. Consider buying one at the earliest.
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