Importance Of Health Insurance

Medical emergencies can arise without any warnings. While you cannot avoid them, you certainly can keep yourself and your family prepared to face it financially by getting a health insurance plan. As for the definition of health insurance, it is a financial tool that ensures you and your loved ones are protected in case of any sudden medical contingencies by covering the cost of treatment. 

 

The hospitalisation and treatment expenses incurred by the patient are compensated by the insurer, either to the hospital directly (in case of cashless claim settlements) or to the insured (in case of reimbursement claim settlement). In this section, we will take a look at what is health insurance, how health insurance works and tips on how to select the right insurance plan.

Important Update (Dated May 30, 2024) – Good news for Health Insurance policyholders! According to the Master Circular on Health Insurance Business 29052024 rolled out on May 29, 2024 by IRDAI, insurers are to decide on the request for cashless claims within 1 hour of receiving the request. Also, the final claim is to be granted within 3 hours after the policyholder’s discharge from the hospital. Insurers have been directed by IRDAI to establish necessary systems and procedures for this process by July 31, 2024.

 

The Master Circular on Health Insurance Business 29052024 circular is available here - https://irdai.gov.in/document-detail?documentId=4942918

How Does Health Insurance Work?

Let us understand the importance of health insurance with the help of an example:

 

Ms. Devika recently purchased an individual health insurance plan with a coverage of Rs. 5 Lakh from a reliable provider. Although Devika did not find the need to claim her health insurance plan in the first year, she religiously renewed the policy for the next year. Unfortunately, she had to be admitted to the hospital due to a mishap.

 

Now, let us further assume that her treatment and hospitalisation bills rounded up to ₹3.5 Lakh. In such a case, the health insurance plan under her name will cover the cost (that is ₹3.5 Lakh) from the coverage amount. After the claim is settled, Devika will have ₹1.5 Lakh worth of coverage remaining.

 

Further, to enhance the sum insured amount of her primary health insurance plan, Devika should opt for top-ups available with her insurer. That way, in the future, she won’t fall short on the coverage in times of need.

Why Do You Need Health Insurance?

Many people find it challenging to have a healthy work-life balance. With the never-ending working hours and poor eating habits, you are most likely to develop health issues over time. Moreover, the medical and treatment costs in India are increasing by the day. Inflation in Medicare is relatively higher than inflation in food and other basic facilities.

 

Also, you cannot completely rely on your life savings to take care of the medical expenses. And even if you do plan to utilise your savings, you wouldn’t be left with much capital for your days ahead. Thus, to take care of sudden medical emergencies and treatment costs, a health insurance plan is a must-have.

 

It is highly recommended for senior citizens to have health insurance as they need it the most. However, a health insurance plan can also be purchased in the early 20s, as it will cost you less. That way, you do not have to compromise on your medical necessities during the need of the hour.

Types of Health Insurance

In India, health insurance plans are broadly categorised in two types –

Indemnity Plans: These are basic health insurance plans that cover the medical and hospitalisation cost of the insured. Indemnity plans are further classified in the following –

 

1. Individual Health Insurance Plan
2. Family Health Insurance Plan
3. Senior Citizen Health Insurance Plan
4. Mediclaim Plan
5. Unit Linked Health Insurance Plan

Definite Benefit Plans: These act as add-on benefits over and above your existing indemnity plans. Some insurers offer definite benefits plans as standalone plans as well. So, make sure that you check with your insurer before buying the policy. Definite benefit plans are further classable into –

 

1. Critical Illness Plan
2. Personal Accident Plan
3. Hospitalisation Cash Benefit Plan

Benefits and Features of Health Insurance

The following are a few features and benefits of health insurance plans available in India:

 

• Medical Coverage

The cost of medical treatments has become very high over the past few years in India, especially in good private hospitals. Even minor surgeries or a short stay at the hospital can cost you lakhs of rupees. The costs rise up significantly if the patient needs intensive care and an extended stay at the hospital. However, health insurance provides you coverage by taking care of the medical and hospitalisation expenses.

 

• Takes Care of Your Lifestyle Changes

The way you lead your life is bound to change with the evolving times. There will be times of extreme work stress which may affect your health. Some lifestyle habits like lack of sleep and improper diet can affect your health over a long time with life-threatening diseases. In these situations, a health insurance plan will cover the treatment expenses incurred during the recovery.

 

• No Claim Bonus

A no claim bonus is a special discount offered to policyholders who do not make any insurance claims in a given policy term. This allows the policyholder to get the NCB discount when renewing their insurance policy.

 

• Add-on Covers

In case you feel the need for enhanced coverage, you can choose to buy add-on covers on top of your health insurance plan. Some examples of add-on covers are top-up coverage, domiciliary care, pre and post hospitalisation expenses, and more.

 

• Free Health Checkups

Most insurers in India offer free health checkups on health insurance plans. It is advisable to get these free health checkups as it helps you (the insured) keep track of your health conditions and seek necessary assistance at an early stage.

 

• Financial Safety

As explained earlier, a comprehensive health insurance plan will cover the medical expenses of you and your loved ones. Because of this, you no longer have to rely on your life savings to cover the medical bills incurred in the treatment and hospitalisation of the patient. Furthermore, health insurance acts as a financial security net around you and your family that comes in handy during medical contingencies.

 

• Tax Benefits

You can avail health insurance tax benefit on the premium paid and claim deduction under Section 80D of the Income Tax Act, 1961. The following table gives an overview of the health insurance tax benefits: 

How To Buy Health Insurance Online

With the kind of life we lead, everything is readily available on the Internet. It is the same with health insurance plans. You can now purchase a health plan from the comfort of your home. However, before you choose a plan, make sure that you are comparing different policies first and then choosing one that fulfils your needs. You can also use the health insurance calculator to determine the premiums charged on your selected coverage and add-on benefits.It is also important that you buy insurance from a reputed insurance company or a trusted insurance provider when purchasing insurance online. 

What Should You Look for While Availing a Health Insurance Policy?

A comprehensive health insurance plan is meant to cover the medical expenses of the insured. However, to understand the working of the policy, look at the following pointers:

 

• Select the Right Cover

When buying health insurance in India, you must evaluate your medical needs. Understand your preferences based on your necessities- whether you want to invest in an individual health insurance plan or a family health insurance plan for yourself and your family members. The need for a health insurance plan varies from person to person, so buy a policy accordingly.

 

• Sum Insured

Typically, you should take into consideration your and your family’s medical conditions before deciding upon the coverage amount. The sum insured you choose should be sufficient to cover the medical expenses incurred by the patient. So, look for a policy that offers a high sum insured at a nominal rate.

 

• Claim Process

Insurers in India offer two claim settlement facilities – cashless claim settlement and reimbursement settlement. The cashless claim settlement facility can be availed at the network hospitals wherein the insurer will settle the claim directly with the hospital.

In the reimbursement process, the insured has to submit a claim application along with the supporting documents. Upon verification and approval, the insurer will credit the claim amount into the bank account.

 

• Policy Renewal and Lapse

Most health insurance plans require annual renewals. In case you forget to renew your health policy, it will lapse. Insurers usually offer 30-90 days to the policyholders to renew the plan. Ideally, the policyholder has to pay the outstanding premium amount to revive the lapsed health insurance plan.

 

• Network Hospitals

When buying insurance, try to choose an insurance provider that has a wide range of network hospitals across the country. This will ensure that you are able to quickly reach a network hospital near your location in case of an emergency.

How to Choose Health Insurance?

If you have a health insurance plan, then rest assured as it is one of the smartest financial decisions you can make. However, if you don’t have one yet, choosing an appropriate health insurance plan can be an overwhelming task. To help you choose a good health plan, here’s a list of important points that you should look out for:

 

• The insurance plan should have financial protection against several critical illnesses.

• You should have the flexibility to choose your health coverage.

• There should be no increase in the premiums charged even if your health condition changes unless you choose to change or upgrade your plan.

• Look for a plan that provides long term health coverage.

• Access to medical treatments in several network hospitals.

To Conclude

The pandemic along with the rising cost of healthcare has made health insurance a necessity for everyone. Moreover, communicable diseases and accidents can happen to the healthiest of people. So, if you are looking to buy a health insurance plan for yourself and your family, you should consider the health insurance plans at Bajaj Markets. You can benefit from features like cashless claim settlements, reinstatement benefits, tax benefits, bespoke insurance plans that fit your needs, extensive coverage, and more. You can buy/renew your health policy using the Bajaj Markets App.

 

Read more about health insurance benefits by visiting Bajaj Markets online.