What Is Health Insurance?

What is health insurance?

Health insurance is an arrangement between the insurer and the policy holder, where the insurance company agrees to offer assured coverage to meet medical expenses, in case the policy holder is diagnosed with illness/disease or meets with an accident, which leads to hospitalization. The health insurance companies provide coverage for pre and post hospitalization, day care hospitalization and have tie-ups with leading hospitals to provide cashless treatment to the insured. In case the insured avails health care facilities at hospitals where there is no cashless facility, then they are reimbursed the cost of hospitalization.

Importance of Health Insurance:

A good health insurance policy is a must have, if you want to ensure quality medical treatment.  Presently, the cost of availing quality health care facilities is sky high. Hospitalization or a critical illness can derail personal finances and might lead to families falling in huge debt. Therefore, buying a good health insurance plan is essential to make sure you get excellent health care facilities during an emergency. It helps the family of the insured maintain stability and avoid strain as health insurance is a comprehensive plan that covers the cost of hospitalisation, surgeries, treatments and medicines as well as ambulance charges.

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What is health insurance?

Benefits of having a Health insurance Policy:

Looking at the average cost of medical procedures, you must realize how important health insurance is and the need for it. Health insurance can be availed from a number of insurers at affordable premiums. Medical emergencies come without knocking, so it’s best to be prepared.

• Pre and post hospitalization charges: This facility covers the costs of pre and post hospitalization and the duration of coverage depends on the policy purchased by the insured. Some insurers cover post hospitalization charges for up to 90 days.
• Cashless treatment: Generally, insurers have tie-ups with the leading hospitals so as to offer cashless treatment to the insured. 
• Medical check-up facilities: Insurance policy also provides options for health checkups. Free health check-up are also provided by some insurers based on your previous NCBs. (No Claim Bonus).
• Transportation charges: Insurance policy also covers the amounts paid towards ambulance charges for transportation of the insured to the hospital.
• Tax benefit:  An individual is eligible for income tax deduction on Premium paid for Health insurance under Section 80D of the Income Tax Act.

SEE ALSO: Should senior citizens take up a health insurance policy?

How to Select the Right Insurance Policy?

It is important to do your research before buying a health insurance policy. Due to a competitive market, most of the insurers offer a similar type of insurance plan. However there are some important points that you must consider before purchasing a health insurance policy:

• Sum Assured
• Minimum Age of entry
• Renewability clause
• Inclusion and Exclusion
• No Claim Bonus
• Other Benefits like coverage for expenses other than hospitalization
• Pre-post hospitalization charges

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Health Insurance Eligibility Criteria:

A person, who wishes to buy a health insurance policy with extended cover, must select the kind of health insurance policy he intends to purchase, like individual or family floater plan. Entry age for adults is 18 to 65 years. The minimum age from which children can be covered under health insurance is from 90 days to 18 years. Coverage cost increases as you grow older based on medical history.  Health insurance policies are usually renewable for a lifetime, but this may be subject to medical screening beyond a certain age.

Documents required when buying a Health Insurance Policy:

In order to avail a health insurance policy, there is some paperwork that needs to be done.  There are few documents that you need to provide as proof as per the guidelines of the insurance company. They are as follows:

• Proof of age –Birth Certificate, 10^th or 12^th mark sheet, Driving License, Passport or Voter ID card
• Proof of identity– Driving License, Passport, Voter ID, PAN Card or Aadhaar Card
• Proof of address– Electricity Bill, Telephone Bill, Ration Card, Driving License or Passport
• Passport Size Photo

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 Types of Health Insurance Policies in India:

• Individual health insurance: the individual health insurance policies are designed to provide coverage for a single person. The policy generally covers a specific set of risks that is pre defined in the terms and conditions of the policy. The Premium on these policies depends on a variety of factors like age, previous medical conditions and location of the policy holder.

• Family health insurance policy: The family floater health insurance policies are designed for multiple members of one family. Instead of buying multiple individual health insurance plans, you can buy a comprehensive family health plan to ensure coverage for all members of the family. In this type of plan, each insured member will receive an equal amount of coverage or all members can receive a combined sum.
• Senior citizen health insurance policy: there are only a few health insurance companies that provide these policies. They may also ask for a health check-up before selling the plan. Individuals above 60 years of age can avail these plans.
• Personal accident plan:  Personal accident insurance takes care of the costs that arise out of accidents. These plans provide compensation in case of death, disablement, injury, impairment or mutilation as a result of violent, hazardous, visible and external means. Accidents that are covered include road, rail, water and air.
• Unit-linked health plan: Many health insurance companies have introduced Unit Linked Health Plans. In such plans, you get health insurance along with an investment component. 
  Returns in such ULIPs definitely depend on stock market performance.
• Maternity health insurance plan: as the name suggests, this policy covers the pre and post hospital charges for females who plan on bearing children. This plan also covers the ambulance charges and provides cover for both the mother and the new-born.
• Critical illness health insurance policy: this type of policy covers the beneficiary against chronic diseases like heart ailments, kidney failure, and stroke. The insurance company pays the sum assured to the insured in the form of a lump sum amount.

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