What is Health Insurance? Importance of Health Insurance in India

Medical emergencies, illnesses, or injuries, remind us of the uncertainties of life. Health insurance is the best financial protection one can get against such unexpected expenses and save us from the impact of medical inflation. It is a cushion you can get for your hard-earned savings while securing your health and that of your loved ones!

What is Health Insurance?

Health insurance refers to a type of insurance coverage for medical expenses, including hospital bills and surgery-related expenses, the insured person incurs. The insurance company provides the coverage, subject to the policy terms and conditions, for a specified premium the insured pays regularly. The medical expenses one incurs due to medical treatment are entirely or partially reimbursed, or there is a cashless claim facility where the insurer settles the expenses directly with the healthcare provider.

Types of Health Insurance

The health insurance sector in India has evolved. The availability of different health insurance covers is an advantage as they now cater to diverse insurance needs of people, instead of ‘one size fits all’ type of products which are not beneficial.

In India, you will find the following types of health insurance:

Individual Health Insurance: A type of health insurance that covers a single individual and the insured person up to the sum insured.
Family Health Insurance: It is a health insurance plan that covers more than one member of a family in a single policy. All the insured members can utilise the sum insured, which serves as a pool, as per their needs.
Senior Citizen Health Insurance: It is a type of health insurance designed to offer adequate coverage for individuals above 60 years of age, with policy benefits that meet the insurance needs of the elderly.
Maternity Insurance: A maternity insurance plan is a health insurance plan that caters to the medical needs during pregnancy. It covers various maternity-related expenses, including the new-born baby cover.
Critical Illness Insurance: Critical illness insurance is an indemnity-based insurance cover for various medical expenses incurred due to the treatment of critical diseases.
Super-Top up Insurance: It is an insurance cover that offers additional coverage to your existing health cover and works on the principle of a deductible.

How Health Insurance Coverage Can Protect you?

Whether a planned medical treatment or during a medical emergency, one visit to the hospital can upset your entire budget and savings for the year. Healthcare costs are soaring, and it can become even more difficult to afford medical treatment in the future. Spending a huge amount of your savings on the medical treatment of your loved ones can lead to a possible financial crisis. Hence, you require a protective shield. With health insurance, your expenses get reimbursed, so it not only saves you financially but also keeps you mentally relaxed about your medical bills.

Today, considering that we are exposed to new health risks, it is only sensible taking vital steps to safeguard our finances by getting health insurance. Having a financial back-up that will protect a family during any unforeseen medical emergency is of utmost necessity to help you bear the burden of rising medical expenses. Health insurance fulfils this objective in the best possible manner by giving comprehensive financial protection against various medical expenses, including hefty hospital bills.

Further, it gives another opportunity to grow your savings as you get eligible for an income tax deduction on your premium, as per Section 80D of the Income Tax Act.

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How Does Health Insurance Work?

Health insurance, unlike mediclaim, covers your hospital bills and the medical treatment expenses that go beyond hospitalization. That is, the expenses covered will include medication, diagnostics tests, and consultation fees as part of pre and post hospitalization, ambulance cover, and day care treatment. Simply put, health insurance provides comprehensive health coverage to individuals. It keeps them financially secured in times of emergencies by offering additional benefits like annual health check-up and no claim bonus.

A policyholder can avail of the coverage benefits by paying the health insurance premium regularly. The premium amount is calculated by taking several factors into account, such as the age of the insured, type of coverage opted, sum insured, pre-existing conditions, policy tenure, to name a few.

The insured also has the advantage of continuing the same policy and avail its benefits through timely policy renewals.

There are two ways in which a policyholder can claim under a health insurance plan:

Reimbursement claim: One has to first bear the medical expenses. The expenses will be later reimbursed by the insurer after the policyholder submits the claim form along with the required documents.
Cashless Claim: In this facility, the policyholder can seek medical treatment in any network hospital empanelled with the insurer and gets admission using the health card. There is no need to pay the hospital bills from one’s pocket; the insurer will settle those expenses directly with the hospital.

Understand Health Insurance Terms

Sum Insured

Sum insured refers to the maximum payout an insurer is liable to pay an insured in case of any unforeseen medical emergency or planned medical treatment. It is based on the principle of indemnity; that is, the health insurance policy will cover the actual expenses an insured incurs, up to the sum insured.

Pre-Existing Diseases

Pre-existing diseases refer to diseases, illnesses, or injury or related condition(s) for which medical advice was received/ or was diagnosed by a medical practitioner within 48 months before the effective date of the policy issued by the insurer or its reinstatement.

Waiting Period

The waiting period refers to the time during which policyholders have to wait before they can get a claim on certain medical expenses or treatments. In health insurance plans, there are three types of waiting period, namely:

A 30-day initial waiting period
Waiting period for pre-existing diseases
Waiting period for specified ailments/ treatments

Network Hospital

Network hospitals are hospitals or healthcare providers empanelled with an insurance company to provide cashless medical treatment facility to the policyholders.

No Claim Bonus

No Claim Bonus is a reward that many health insurance plans provide if the insured spends a claim-free year. It refers to a bonus amount, in the form of an increased sum insured by a specified percentage, which a policyholder is entitled to receive under a health insurance plan for not claiming during the policy tenure.

Why You Need to Buy Health Insurance?

We seek various ways and investment options to save money. Health is the most essential aspect of our lives. Clearly, health insurance is a valuable investment you can make and secure the health of your loved ones against the rising healthcare costs.

Here are some reasons you need health insurance:

Medical Inflation

As the healthcare industry has accomplished new feats over the recent years, we now have excellent facilities that give the best medical treatment for severe ailments. Surprisingly, medical inflation is also growing at a faster rate than overall inflation; and we now find quality medical care expensive that what we expected. As we stare at a future when we shall witness sky-touching healthcare costs, it is a wise idea to invest in health insurance now!

Lifestyle-related Health Risks

Ironically, it is not only the elderly who face the risk of illnesses; even young adults are now under the grip of several lifestyle-related ailments, increasingly, due to the fast-paced and hectic work schedule in the pursuit of a better quality of life. Amidst the increasing health risks due to various lifestyle and environmental factors, a health insurance policy gives you adequate protection to enable you and your loved ones to access the best medical care.

Access to Immediate Treatment

With cashless hospitalization, you get access to immediate treatment at a network hospital. You can choose any network hospital, empanelled with us, according to your locality and convenience. Network hospitals are well-facilitated and have highly experienced medical professionals. You are not required to wait and fulfill cash deposit formalities. Your treatment gets started right after you inform the insurance desk at the hospital and submit the pre-authorization form. Later, after submitting all the required documents, your health insurance provider pays all your bills directly to the hospital, subject to policy terms and conditions.

Reimbursement of Pre and Post Hospitalization Medical Expenses

Your pre and post hospitalization medical expenses get reimbursed up to the sum insured by the insurer. You are required to submit your medical bills of 30 days prior to hospitalisation and 60 days after discharge from hospital to get the reimbursement. With the right medical insurance cover, you get your money back and do not need to pay hefty medical bills from your pocket.

Helps you Manage Long-term Treatment of Critical Illnesses

Besides one’s family medical history, the sedentary lifestyle, unhealthy eating habits, lack of physical exercises, and pollution together become risk factors for critical illnesses, including cancer. These illnesses require regular medication, treatments, and chemotherapies. The long-term treatment costs one may incur can lead to a gradual loss of savings. An exclusive health insurance policy will help you manage the recurring medical costs that occur due to on-going treatments of such diseases. Therefore, it ensures the best possible treatment in the present and even after your retirement.

Annual Health Check-Ups

Annual health check-ups and diagnosis costs are skyrocketing. Under a health insurance plan, you and your loved ones can avail annual health check-ups on a cashless basis. It saves your bunch of money on diagnosis and tests every year. With regular check-ups, you can keep track of your and your family's health, detect any hidden ailments, and nip them in the bud before they become serious.

Tax Benefits

Under Section 80D of the Income Tax Act, you can avail of tax benefits as well. For the premium you pay towards a health insurance policy for self, dependent senior citizen parents, children, and spouse, you can get the tax deduction up to Rs.75,000. However, the taxable amount is subjected to your income and age. It also reduces your taxable income, which reflects less tax liability.

Peace of Mind

With the right health insurance cover, you do not need to worry about on-going medical treatment costs after retirement. You can save your money on buying a home, children's education, and their marriage. While your health insurance plan takes care of your healthcare needs for a peaceful life.

Buying health insurance has made it possible for people to minimize healthcare expenses to a huge extent. However, for many, the challenge lies in deciding the right plan. You may have several questions like what does health insurance cover, what does it not cover or which is the best health insurance plan for family. Every such question is worth asking and finding answers to all of them is important to help make the right decision.

Health Insurance is a shield that protects you and your loved ones in cases of medical emergencies.

A affordable health insurance plan makes sure that financial crisis is not an issue during a medical emergency.

With the skyrocketing cost of healthcare in the country, opting for a good health Insurance Plan is a smart decision for the safety of the individual and family as a whole.

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What is Pre-Existing Disease? Will My Health Policy Cover the Same?

Pre-existing diseases refer to diseases, illnesses, or injury or related condition(s) for which medical advice was received/ or diagnosed by a medical practitioner within 48 months before the effective date of the policy issued by the insurer or its reinstatement.

Yes, there are health plans that cover pre-existing diseases, for example, diabetes or hypertension, but there would be a waiting period when the insured person must wait in order before making a claim for the treatment of such diseases. Thus, before opting for a health cover, find out if it covers pre-existing diseases and if, yes, what the waiting period is. You can ensure that you get access to medical treatment without any delays by opting for a policy with lower waiting period.

It is also necessary to disclose your complete medical history, at the time of buying a policy, to avoid negative implications later on. That is, if you do not specify your pre-existing condition, it can lead to claim rejection in the cases involving treatment of such conditions.

What Does Health Insurance Cover?

A health insurance plan gives you comprehensive protection when one faces the brunt of medical emergencies or even in case of planned medical treatments due to an illness. The covers one gets will depend on the type of policy for, but broadly health insurance provides the following benefits:

In-patient hospitalization, including room rent, doctor’s fee, and ICU charges
Cover for pre and post hospitalization medical expenses
Ambulance cover
Domiciliary hospitalization
Modern day care treatments
Alternative treatment cover
Organ donor cover
Automatic recharge of sum insured
No claim bonus
Cover for pre-existing diseases, subject to waiting period
Advanced medical treatments, including robotic surgeries
Some health insurance now offer coverage for coronavirus treatment

What Does Health Insurance Not Cover?

To understand this, you must read about the exclusions mentioned in your policy document. Exclusions refer to scenarios, and expenses, for which a policyholder is not eligible to get a claim under the health policy. However, there may be conditions that may not be covered temporarily. That is, they would be covered after a certain waiting period.

Examples of some expenses and medical conditions that are permanently excluded from policy coverage include:

Intentional self-inflicted injuries, and substance abuse
Expenses incurred due to alcohol or drug use/misuse/abuse
Medical treatment related to infertility and in vitro fertilization
War, riot, strike, nuclear weapons induced hospitalization

What are the Details Required for Making a Claim?

For processing your cashless health insurance claim, you will be required to present your health card at the network hospital and proof of identity and submit the duly filled pre-authorization form at the hospital insurance/TPA desk as part of the claim settlement procedures. The details required include contact information, policy number, past medical history, proposed line of treatment, estimated expenses, duration of treatment, etc.

In case of a reimbursement claim, you will need to submit the claim form giving vital details, including the name of the insured person, contact information, policy number, and details about the ailment or accident and furnish documents, such as identity proofs, hospital bills, etc.

Can My Claim Get Rejected? If Yes, Under What Conditions?

Yes, the claim made by you under your health insurance policy may get rejected due to a number of reasons. One of them is not disclosing facts about your medical history, especially pre-existing ailments. Other reasons include mentioning incorrect facts, claims made during the waiting period, specific coverage not given as per the policy terms or expenses, say for room-rent, that exceed the sub-limit specified in policy details. Moreover, it is also essential to renew health plans on a timely basis to avoid health insurance claim rejection.

If you are looking for comprehensive coverage for all your medical expenses, browse and select a suitable health insurance policy for your family from Care Health Insurance.

FAQs

Q. What Should I Do if I Want to Increase the Sum Insured in my Health Insurance Policy?

You can increase the sum insured in my health insurance at the time of policy renewal. Policyholders have the option to increase the sum insured after certain medical tests and a revision of the claim history. But it can't be increased further if the existing sum has already met the sum insured limit of your policy.

Q. Can I Get Medical Insurance Policy if I am Over 65?

Yes, you can get a medical insurance policy if you are over 65. You can opt for Senior Citizen health insurance that has a 20% co-payment clause. It covers pre and post hospitalization expenses and also provides the facility of cashless hospitalization at an affordable premium.

Q. Can I Add My Elderly Parents on My Medical Insurance Policy?

No, you cannot include your elderly parents on your medical insurance policy. Instead, you can buy health insurance for parents for them.

Understand Health Insurance and its Importance