A layman’s guide to health insurance

Insurance

oi-Sunil

By Sunil Fernandes

Published: Monday, August 12, 2013, 8:23 [IST]

We all need health insurance - in this day and age, with changed lifestyles leading to frequent instances of ill health and the unbelievably high cost of medical treatment, health insurance is a practical investment. To first understand what a health insurance plan entails and how it benefits us we must first know what it is.

To put it simply, health insurance is a risk predicting plan by which one can avoid the expenses of medical emergencies by having them met by an insurance agency. To do this, one must pay the insurance company yearly premiums. You might still ask yourself why you would need health insurance - if you consider yourself to be especially healthy.

The answer to that lies in the present state of increasingly elevated medical rates and expenses. This could lead to a very serious problem in times of medical emergency when failing to meet the necessary expenses could lead to sub-standard health care or financial trouble.

There are two basic forms of Health Insurance plan:

The individual plan, as written, this plan only covers one person. A family floater plan covers all members of the family under the same plan. Unlike the individual health insurance plans, this demands a marginally higher premium.

These are further broken up into two broad categories

A regular health plan covers the less serious and critical forms of medical care that is required either on a regular basis or in case of circumstance. The plan usually covers expenses incurred in hospitalizations only up to a specified amount on the bill.

A critical illness plan usually covers diseases that were detected before the insurance policy was started. They are usually life threatening long term illnesses that require longer hospitalization and greater medical care.

You might wonder of the Benefits that these various insurance plans entail.

For one, investing in a health insurance plan gives you great tax benefits - the yearly premium that you pay is exempted from tax up to the amount of Rs 15000 under Section 80D of the Income Tax Act. Senior citizens can avail of tax benefits on amounts up to Rs 20000.

You can opt for a cashless health insurance facility that will ensure that your hospital bills are paid directly by your insurance company which ties up with ‘network' hospitals.

You can get a cover for pre-existing illness during time of purchase after completing a certain time period as designated by the insurer.

Supposing you do not claim health insurance, when you renew your policy you might avail of a discount; or the assured sum that all insurance policies result in may be increased by a percentage.

Lastly, if you are hospitalized then according to your plan, you may receive a fixed amount daily, irrespective of your daily medical expenses. This holds true even in the case of admission into the ICU.

Keeping all these benefits in mind, it would seem prudent even to the healthiest individual to buy health insurance. Therefore, if you still have not insured yourself and your family against possible ill health, do so immediately - and choose a plan which suits your needs the best.

Written By: Deepak Yohannan
The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal

For more articles by Deepak Yohannan, please visit MyInsuranceClub.com
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