Benefits Of Health Insurance Plans
Health insurance benefits are indeed a boon, especially during medical emergencies. Read on to understand the importance of health insurance and how you can benefit from medical health cover.
By Amrita Gracias
To have a health insurance plan is important, but how important really? Perhaps, reading about Lakshmi can help you appreciate the value of having a health insurance policy.
Lakshmi's father was discharged from the hospital after a cardiac surgery only a few months ago. However, his health worsened, leading to hospitalisation again. As her father was being treated, Lakshmi’s only thoughts were of how to meet the medical expenses. Would her depleted savings cover her father's medical expenses? If not, what would she do? Lakshmi shared her worries with her husband. However, surprisingly, Lakshmi’s husband didn’t seem so worried! But, why?
Lakshmi's husband revealed that a family health insurance plan he purchased some time ago would take care of a major part of the medical expenses, and also of Lakshmi's worries.
What is a health insurance plan?
A health insurance policy is a type of insurance coverage that covers medical expenses. It pays for or reimburses the medical expenses incurred due to illness, injury or hospitalisation by the policyholder.
A health insurance policy provides the much-needed monetary assistance during medical emergencies and saves us from spending our savings on medical expenses.
Importance of health insurance
In recent times, both health insurance plans for the family and individual health insurance policy have become a necessity. It is important to note that the best health insurance plans also offer other benefits. However, not many of us know about health insurance benefits. Here are a few advantages offered by the best health insurance plans in India.
- Financial back-up and access to funds: The most important benefit is the financial assistance that different types of health insurance policies offer. Without a proper health insurance coverage, most of us can lose our life savings paying for medical expenses. This can upset our other plans like investing on our child’s education, property purchase and so on.
- Family coverage: All dependent family members, including spouse, children and parents, can be covered under a health insurance policy for family. This can be purchased by paying a single premium. Features of the plan are tailored for coverage of family members, especially health insurance for parents or senior citizens.
- Income tax benefits: Premiums paid towards health insurance plans are eligible for tax deductions under Section 80D of the Income Tax Act. Individuals under the age of 60 years can claim up to Rs 25,000 of the premiums paid for self, spouse and children. An additional deduction of Rs 25,000 can be claimed for premiums paid for their parents who are under 60 years. If their parents are above 60 years, an additional 50,000 can be claimed for premiums paid for them.
- Coverage of pre and post hospitalisation expenses: Other than the regular hospital bills, most types of health insurance plans also cover other related expenses. These include laboratory tests for diagnosis and investigations, outpatient department expenses, prescription bills and other costs after discharge from the hospital.
- Alternative treatments: Recently, health insurance companies have introduced plans that also cover alternative medicine treatments like Ayurveda, Homeopathy and Unani.
- Critical illness coverage and accident coverage: As an add-on to your regular health insurance plan, a critical illness insurance plan provides coverage for life-threatening illnesses such as cancer, kidney failure, stroke and a coronary bypass (illnesses from a predetermined list in the policy). This plan provides a lump sum amount to the policyholder, which takes care of expenses related to the illness. Similarly, accident insurance takes care of medical expenses arising from an accident.
What a good health insurance policy should include
- Cashless facility: The cashless insurance facility helps a policyholder receive medical attention even if he does not have cash in hand during hospitalisation. Most top-ranked health insurance companies have a tie-up with an extensive network of hospitals to facilitate treatment.
- Emergency services: It is always better to buy a health insurance policy that covers emergencies like stroke or cardiac arrest. They should also cover ambulance and intensive care unit charges.
- Domiciliary hospitalisation: This refers to a situation when the patient (policyholder) is considered to be hospitalised even when he is not (being treated at home). Such a situation may arise due to certain health conditions or for other reasons.
- Maternity and vaccinations: Most health insurance companies now provide health insurance for pregnancy and infant vaccination. However, these expenses are usually covered 1–2 years after purchasing the policy. Vaccination expenses are mostly covered under health insurance for children until the age of one. This can, however, vary between health insurance companies. As an add-on rider, the policy can even cover adult vaccinations like those for Hepatitis and Rabies.
- Alternative treatments: Treatments using Ayurveda, Homeopathy and Unani have been included in some health insurance plans in the recent years. However, it is essential that the policyholder should undergo treatment only in a government hospital or a health centre recognised by the government.
- Annual health check-ups: Most affordable health coverage plans include a free annual health check-up in hospitals listed in the policy. You can make use of this facility for the whole family once a year.
- Pre-existing diseases: Medical health cover should cover pre-existing ailments. However, most plans cover them 36 – 48 months after the policy comes into force. It is always better to declare any pre-existing ailments at the time of purchasing health insurance plan. This ensures a smooth claim process.
- No-claim bonus (NCB): This refers to a discount offered on the annual premium if the policyholder does not make any claims from the policy during the year. The NCB can range between 20% and 50% of the total premium to be paid for the following year.
"There are a few variables which can help you to choose the right health insurance policy. They are:
a. Your requirement: It’s important to know why you need a health insurance policy
b. Your family medical history: If both parents and siblings are diabetic, there is a chance that health premium will go up
c. Proximity of the insurer: There would be times where you may want to visit the insurer
d. OP benefits: Check whether the policy provides outpatient benefits
e. Costs compared to the cover provided – Ensure you are not comparing apples with oranges."
— A V Senthil, Finance Expert
If you don’t have medical health cover for your family, it is high time you realised the importance of health insurance. So, go ahead and purchase one right away! However, do remember to compare plans from different health insurance companies before you decide. It is important to not decide based on the cost of the premium alone. Take into consideration the terms and conditions, and inclusions and exclusions also. These could prove crucial, especially during times of emergency.
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