What is health insurance?

Health insurance is a protective financial tool that shields you from the potential expenses associated with healthcare. It functions as a safety net to ensure you receive necessary medical attention without facing substantial financial strain. Health insurance promotes both your financial security and well-being.

Health insurance can be bought by paying a premium, which varies according to factors such as coverage, age and health condition. In the event of illness, accident or injury, the insurance policy covers your medical expenses and prevents you from depleting your personal savings. One of the key advantages of health insurance is the convenience it offers through quick disbursals and cashless hospitalisation. With a streamlined process and easy availability of funds, you can access quality healthcare services in a timely manner.

It is important to realise the long-term importance of health insurance and use it to financially secure yourself.

What is the importance of health insurance?

Below are some reasons why health insurance is important:

• Financial protection

  Health insurance offers financial security against medical expenses, such as hospitalisation, surgeries, medications, ambulance expenses and other healthcare services. It helps you cover these costs without having to use your savings or take on any debt.

• Emergency situations

  Emergencies such as accidents or sudden illnesses can occur unexpectedly and lead to substantial medical expenses. Health insurance provides crucial financial support during such emergencies. With health insurance, you can access timely medical attention without worrying about the financial implications.

• Safeguard your family

  Health insurance safeguards your family by ensuring that your loved ones have access to comprehensive medical coverage at all times. Health insurance provides reassurance and promotes their well-being and overall quality of life.

• Healthcare costs are rising fast

  The rate at which medical costs are rising makes it necessary to have health insurance. Medical trend rate, i.e. the increase in per-person cost due to medical inflation is expected to rise at double the inflation rate in India itself. The forecasted medical trend rate will be 10% in India, while inflation will be at 5%^~. Cancer and diseases of the circulatory system remain the top two highest claims reported by most insurers, followed by gastrointestinal diseases and respiratory conditions. With a fixed benefit health insurance cover, you can effectively fight critical illnesses like cancer and conditions related to the heart.

• Critical illness coverage

  The costs associated with treating critical illnesses are notably high. Health insurance policies with a critical illness cover offer financial protection against critical illnesses, such as cancer, heart diseases, kidney ailments, organ transplants and other life-threatening illnesses. This can be used to cover expenses such as chemotherapy, radiation therapy, hospitalisation, surgeries, medications, rehabilitation and more.

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Benefits of health insurance

• Money given upfront without medical bills

  Fixed benefit health insurance plans pay the entire amount on diagnosis of the disease. Yes, there is no need to show actual proof of hospitalisation and treatment, like hospital bills or treatment bills. In this way, such health insurance policies offer full coverage for both, before and after hospitalisation expenses. There are no pre-specified durations/limits. If the policyholder is diagnosed with an ailment that is covered under the policy, the insurer will pay the money to the policyholder without asking any further questions.

• Treatment at a facility of your choice

  With proper health insurance, you can get treated anywhere in India and the world. If you have the right amount of health cover, you do not need to compromise with treatment. In a fixed benefit health insurance plan, you get a lump sum payout upon diagnosis, which removes the hassle of getting admitted to a network hospital for cashless treatment. With the health insurance claim money, you can opt for treatment anywhere in the world as per your own wish and convenience.

• High cover at low cost

  Fixed benefit health insurance plans give high coverage amount for a comparatively lower premium. This saves you money and also allows you to remain worry-free even if diagnosed with a severe ailment.

• Automatic increase in the sum assured amount

   Health insurance is not just a cost-effective way to manage medical treatment. It also gives you bigger coverage with every year you do not claim. This means if there is a year where there is no claim, your premium money is not wasted. The premium paid in a no-claim year gets you wider coverage.

• Fixed premium cost

  Health insurance plans offer fixed benefits at a fixed premium. The premium amount in such special plans remains fixed for the entire duration of the policy. This means that your household budget is not put under any strain due to rising health insurance costs. Some plans even offer a discount on the first-year premium if you and your spouse are covered.

• Tax benefits^*

  Fixed benefit health insurance plans offer tax benefits. If you pay the premium, you can avail deduction up to ₹ 25,000 from your taxable income on the health insurance premiums paid. This amount of benefit is available under Section 80D of the Income Tax Act if your age is less than 60 years. If you and your family members are all more than 60 years old, the maximum deduction available is of ₹ 50,000. The same benefit is applicable for premiums that you pay for your parents.

• Cashless treatment

  Health insurance offers cashless hospitalisation. This feature allows you to avail of medical care at network hospitals without the need to make upfront payments. In times of emergency, the insurance company directly settles the bills with the hospital. This not only streamlines the entire process but also ensures that you can focus entirely on your health without the added stress of managing immediate financial transactions. Cashless treatments also eliminate time wastage, which can be crucial during medical emergencies.

How to Choose the Right Health Insurance Plan in India?

Below are some factors that can help you select the right health insurance plan:

• Coverage Amount

  It is important to consider your individual or family's healthcare needs, factor in potential medical expenses and select a plan that provides a sufficient coverage amount to address these requirements adequately.

• Plan Type

  Understanding the various plan types is crucial in selecting the right health insurance. Consider evaluating multiple plans and comparing their features and benefits. This can help you select a plan that suits your healthcare preferences and budget.

• Pre-existing Conditions

  Some plans may provide coverage for pre-existing conditions with waiting periods, while others may offer immediate coverage. Consider your health history and opt for a plan that provides comprehensive coverage for pre-existing conditions without substantial waiting periods.

• Hospitals Network

  You must ensure that the health insurance plan includes reputable hospitals and healthcare providers in your preferred city. This ensures prompt and quality medical services when needed.

• Coverage Inclusions

  Make sure to examine the coverage inclusions of a health insurance plan, including critical illness coverage, outpatient services, ambulance costs, prescription medications, preventive care, maternity coverage and more.

• Claim Process

  A streamlined and transparent claim process is essential for a hassle-free experience. Understand the claim procedure and select a plan with a straightforward claim process to enhance the overall efficiency of your insurance plan.

• Premiums

  Remember to consider your budget constraints and select a plan that offers a reasonable premium while still providing the necessary coverage for your healthcare requirements.

• Policy Terms and Conditions

  Understanding the policy terms and conditions and thoroughly reviewing them is essential. To make an informed decision, you must pay attention to exclusions, waiting periods and any limitations imposed by the insurance provider.

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