What is a Health Insurance?
To be financially stable is everyone’s dream. However, with rising medical costs, treatment for illnesses can easily eat into your savings. Arranging funds during a medical emergency can also be a daunting task. A health insurance policy can protect you from the financial strain caused due to a medical emergency.
Types of Health Insurance:-
Health insurance encompasses two types – Indemnity plans and Definite Benefit Plan. The indemnity plans are traditional health covers that cover hospitalization costs from the sum assured. Definite benefit plans offer lump sum payments on the detection of illness.
Indemnity plans further include:
- Family floater
- Senior Citizen
- Unit linked health plans
Definite benefit plans include the following:
- Critical Illness Plan
- Personal Accident plan
- Hospitalization cash benefit plan
WHY IS HEALTH INSURANCE IMPORTANT?
- Security of Family’s health
- High Medical Costs
- Lifestyle changes
HOW DOES HEALTH INSURANCE WORK?
The health insurance policy covers the whole or a part of the hospital expenses. People often have questions regarding how insurance works. Take a look at the below pointers:
1. Choose the right cover
When you plan to buy a health insurance policy, make sure that assess your needs. If you have dependent family members including your spouse and children, you may opt for family floater insurance or if you have dependent parents aged above 60 years, then a Senior Citizen plan would an ideal choice. The needs vary from person to person, hence select the insurance type wisely
2. Sum assured
When an insurance company extends insurance coverage in the form of a sum assured, which a policyholder gets in exchange for the premium you pay. Choose the best health insurance cover, which offers sufficient coverage at affordable premium rates.
3. Daily allowance
Some insurance cover offers daily allowance, wherein you get daily hospital cash to cover daily expenses for the number of days one is hospitalized.
4. Claim process
You can claim for health cover in two ways – cashless and reimbursement. The cashless process requires you to seek medicare only at network hospitals of the insurance company. Whether the hospitalization is planned or unplanned, the insurer directly settles expenses with the network hospital. However, in some cases where the cashless facility is not available, you can still claim for health coverage through the reimbursement process. Under this, you have to pay all the hospital bills, and later you need to submit the bills to the insurance to get the reimbursement transferred in your account directly.
5. Renewal & Policy lapse
The term period of health insurance depends on what type of plan you select. Usually, policies are active for a year. If you forget to renew, the policy will lapse. In case of a lapsed policy, the insurer gives you a time period of 6 months during which you need to pay the outstanding premiums and reinstatement costs.
6. No Claim Bonus
In case you do not claim in a particular year, you are entitled to receive no claim bonus. This can be either in the form of a premium discount or addition to the sum assured amount.
INCURRED CLAIM RATIO AND CLAIM SETTLEMENT RATIO IN HEALTH INSURANCE:
When it comes to buying a health insurance policy, we often pay heed to only the brand name; the sum assured and premium affordability. As a buyer these factors are common; therefore one should also consider other essential aspects of the policy, including the Incurred Claim Ratio (ICR) and Claim Settlement Ratio (CSR)
The Incurred Claim Ratio is the proportion of claims that an insurance company has incurred/paid as against the total amount of premiums. For instance, if the company has approved a total claim amounting to 40 crores against the total premium amount of Rs.100 crores, this means it has ICR of 40%. If the ICR is less than 50%, it means the company has collected more premiums as compared to claims. The perfect ratio of a company should be between 75% and 95%.
Claim Settlement Ratio is the total number of claims settled by the insurance company. Typically, the insurance company that follows a clear and simple approach for claim processing have a high percentage of claim settlement ratio. For instance, if an insurance company has an 80% CSR, this exhibits that it has successfully settled 80 claim requests out of 100. The higher the settlement ratio, the more reliable is the insurance company.
BENEFITS OF A BEST HEALTH INSURANCE PLAN:
1. Financial Security
With the passing of time, medical costs are rising and lifestyle-related diseases such as diabetes, cancer, stroke, etc. are also surging. In such a case, having health insurance in the present time is of utmost importance as it can financially protect you against unavoidable expenses. This way, your savings also remain protected.
2. Domiciliary treatment
Some health insurance companies provide cover for domiciliary treatment, wherein the treatment for certain diseases is provided at home under medical supervision. Note that there is a limitation on the amount and the number of days when availing insurance cover for domiciliary treatment.
3. Free health check-up
Health insurance understands that health is wealth; therefore, it needs consistent health monitoring. As a policyholder, you are eligible for a free preventive health check-up after every 4 to 5 claim-free years. Some insurers also offer cashless treatments at their network hospital.
4. Tax benefits
You can avail of tax benefits under Section 80D of the Income Tax Act. As part of the law, you can avail of tax benefits for the expenses incurred on the preventive health check-up of parents above 60 years. Below is the table which shows the tax deductions for various health covers:
5. Coverage against critical illness
To treat life-threatening diseases, the sum assured of a basic health insurance cover would not be enough; therefore, insurers provide critical illness cover as an add-on or rider option. When you seek critical illness add-on cover under your existing health insurance policy, you are entitled to receive lumpsum on detection of diseases like cancer, heart stroke, kidney failure, bone marrow transplant, etc.
FEATURES OF HEALTH INSURANCE
The most notable features of a modern health insurance plan are-
- Renewal discounts
- Tax benefits
With health insurance, you can cast a safety net to protect you from financial troubles during a medical emergency. It is a sound investment to secure your financial stability in the future.
Health insurance providers offer policyholders portability. This is a feature of certain policies that allows one to switch across health insurance providers without losing any of the benefits that are associated with their existing health insurance plan. In cases of the policyholder not being satisfied with their current medical insurance plan, and seeking out something more comprehensive, they have the option to change their health insurance provider or their policy within the same company. One will still retain all the original credits that they had gained in their current medical plan.
- You can opt to switch between health insurance providers. Hence you can take a new policy with a different provider while retaining the credits earned from your existing policy.
- You can also switch health insurance policies by sticking with the same insurance provider.
- You can choose to switch from an individual policy to a family floater and vice versa.
- You can apply for a revised sum insured amount with your new insurer.
- Portability also includes enhancing the range of coverage you receive from health plans. You can enhance this range with the same insurance policy. To do so there may be medical testing and new waiting periods.
choose the best health insurance plan from among them.
What is the difference between health insurance and mediclaim policy?
Once you decide to sign up for health insurance and begin researching to pick the best suited plan, you may come across certain terms that may confuse you. ‘Health insurance’ and ‘mediclaim’ may appear in most articles and might even be used interchangeably. This is because of the popular misconception that ‘mediclaim’ is synonymous with ‘health insurance’. But this is far from the truth. While they both have a similar purpose – to offer financial aid during a health emergency, they widely differ in the coverage they provide. Read on to compare the two:
Health insurance provides comprehensive coverage for most types of healthcare expenses, such as pre-hospitalisation, post-hospitalisation and critical illness. You can opt for cashless claims, where the insurance company contacts your healthcare provider directly and pays the amount owed (if the healthcare provider is a part of the network hospitals of the insurance company). And if not that, you can pay your medical bills upfront and then claim reimbursement from your insurer.
Max Bupa health insurance plans come with value-added benefits such as free medical check-ups, no-claim bonus, health coach etc. You can even opt for additional covers such as personal accident cover and maternity cover.
Mediclaim policies are dedicated to hospitalization expenses – it covers only your hospital/treatment expenses following an accident or a specific disease. This means that other medical expenses are not covered. But like a health insurance plan, you can choose between reimbursement and cashless options for claim settlement.
When it comes to health insurance, it is best to choose a plan that suits your individual needs. If you have pre-existing diseases, a comprehensive health insurance plan with inclusions and add-ons specific to your condition could be your best bet. However, a mediclaim policy can be an option if you need a basic and low-cost cover.
Here are the key differences between health insurance and mediclaim at a glance:
A health insurance policy serves as a financial cover for unforeseen medical expenses. With a health insurance policy, you and your insurance provider have an agreement that in the case of a medical emergency, the policyholder will be covered financially by the insurer. As with any kind of insurance, health insurance is an investment made over time with the goal of continuing your coverage in order to protect your hard-earned savings.
Insurance providers are mindful that there is no one size fits all, which is why there is not just one type of health insurance out there for every individual. There are actually several different kinds of health insurance plans in India to fit individual needs.
WHAT IS A HEALTH INSURANCE POLICY?
Health insurance is like a financial security that you have for handling your medical expenses. Health insurance plans are like an investment that you make so that you can safeguard your hard-earned funds from being spent on expenses related to hospitalization, medicines, ambulance, doctor’s consultation and more. A health insurance policy can also be viewed as an agreement between you and your health insurance company that binds them to cover you financially in case of any medical emergency.
There are several types of health insurance plans in India. And, you should choose the best health insurance policy for yourself and your family so that you can relax when it comes to paying hefty medical bills. You not only get covered for the medical expenses with your health insurance plans but also get facilities such as cashless treatment and quality health care at a reputed network hospital. Health insurance plans are like your friends that take away your financial burden in case of hospital-related exigencies.
WHAT IS THE NEED FOR HEALTH INSURANCE?
An effective medical insurance policy is essential because the prices of medicines and hospital treatments are rising day by day. If an accident or critical illness befalls you, it will cause a huge financial burden on you and your family. A hard-hitting truth is that whether your trip to hospital is planned or it comes as an unpleasant surprise, it is sure to cost you heavily. So, it’s better to have a protection of health insurance plans, that besides helping you manage your finances, also offer you a several other benefits at very affordable premium rates. You can also check out various health insurance quotes online to figure out which one is most suited to your budget.
Here are 5 reasons that will make you understand the importance of having the best health insurance plan:
- ✓ Financial Help : Your health insurance policy will ease your burden of paying heavy medical bills from out of your pocket. You can save your hard-earned money for living your life to the fullest, instead of spending a huge part of it on medical care. If you are worried about the premium rates, then please be assured that you can get an adequate health insurance policy at very affordable premium costs. You also get discounts like family discount, which will allow you to keep the medical insurance plan’s coverage intact while paying a relatively low health insurance premium.
- ✓ Quality Medical Care : You can avail the benefit of cashless claims and quality medical care if you decide to get your treatment at a network hospital. A network hospital is a hospital that has an agreement with your health insurance company, which enables you to get the best treatment without having to shell out from your pocket.
- ✓ Tax saving : In India, the payments you make towards your health insurance policies are eligible for tax deductions under section 80D of the Income Tax Act. You can avail the maximum deductions of INR 1 lakh if you buy health insurance plans for yourself and your loved ones, and if you and your parents are senior citizens.
- ✓ Extensive Coverage : Health insurance plans in India not only cover you for hospitalization expenses, but also provide cover against critical illnesses, accident-related, maternity, consultations, check-ups and other such medical expenses with different types of health insurance plans.
- ✓ Peace of mind : If you are secured on the financial front, then even a trip to a hospital feels a little less stressed. Having a medical insurance gives you the peace of mind that can help you relax in a tense situation.
With so many health insurance plans in India offered by health insurance companies in India to choose from, you can certainly choose the best health insurance plan from among them.