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What is health insurance and why is it necessary to purchase it?

    IndianMoney.com Research Team | Monday, July 18,2011, 06:05 PM
 

Human body is prone to diseases. Nobody can say “yes i cannot get sick”. Even Baba Ramdev can get sick. A common man works hard all his life for what?? He earns for his livelihood, for his families dreams, for his child’s dreams, for a better standard of life. BUT what if after working hard for whole of one’s life one has to spend all that money for his medical treatment, all give it to hospitals just for the sake of breathing. All happiness vanishes once for all. The whole lifetime fortune just goes like that for medical treatments. BUT, why not spend little now to get spared from making huge payments at the time needed and let the dreams come true. This brings in the concept of HEATH INSURANCE SECTOR. The question arises WHY IS NOT HEALTH INSURANCE COMPULSARY AND MAKE MEDICINES FREE IN INDIA. It is there in western part of the globe, and that is the reason people there have no fear on their faces in old age too. Why not get insured and enjoy the facility of standard quality medical treatment in our country instead free substandard treatment in municipal hospital.

What is health insurance?

Health insurance is a risk covering document to provide financial aid against the risk of unforeseen health expenditure. It’s simple health insurance is an insurance policy on which one has to pay a reasonable amount of premium any in any event of sickness, this health insurance provides financial aid for the treatment.

Need for health insurance

Over the large 50 years India has developed much awareness and has been successful in improving the health status. The death rate, infant mortality rate etc have certainly been reduced and during the course of time the life expectancy has increased from about 35 to 65 years. Still there are many challenges which include high incidences of the communicable as well as non communicable diseases, neglect of women’s health, variation in regions and of the environmental threat. A recent survey result shows that 60% people use private health providers for outpatient treatment while another 40% rely on government providers only. The average expenses incurred in private sector is 2-5 times more than in public sector.

On considering the GDP of our country private health care expenses is 4.25% out of 6%, the total expenditure on health. But still the insurance is considered to be negligible. Public funding is mainly on preventive, and primary care programmes but private sector concentrates mainly on curative care. There has been a considerable increase in number of private doctors and private clinical facilities, in addition to these there are many hurdles arising in Indian health financing which are :

  • Increase in health care costs
  • High financial hardship on poor as compared to minimum income.
  • Increase in burden of new diseases and health risks.
  • Avoidance of preventive and primary care and public health functions by the government health care.

Thus having a view of the above data it is very difficult for health financing options. Health insurance, hence, is considered to be as one of the financing mechanism to overcome the problem and stay health.

How it works?

There are many health insurance companies in India. Every company offers various products. Some are for specific illness, some are only for hospitalization and on top of that most of them are having hidden terms and conditions. Here INDIANMONEY.COM plays a predominant role in helping you in selecting the best health insurance policy among the various available in the market. Indianmoney.com is a free financial advice provider which can help you in selecting the best health insurance policy as per your individual requirements.

Health insurance may be available at cheap rates if you are healthy but make sure that you purchase a policy which meets your needs. Look out for the deductibles, co payments and sublimits in your health insurance policy.

Make use of health insurance portability if you are not satisfied with your health insurance policy.

IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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