Health insurance is a type of insurance coverage that pays for medical, surgical, and sometimes dental expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly.
Importance of Health Insurance
Buying a health insurance policy for yourself and your family is important because medical care is expensive, especially in the private sector. Hospitalization can burn a hole in your pocket and derail your finances. It will become even tough, if the person who brings in the money, is now in a hospital bed. All this can be avoided by just paying a small annual premium which would lessen your stress in case of medical emergencies.
A good health insurance policy would usually cover expenses made towards doctor consultation fees, costs towards medical tests, ambulance charges, hospitalization costs and even post-hospitalization recovery costs to a certain extent.
Benefits of having a Health insurance Policy
1. Cashless Treatment: If you are insured, you can get cashless treatments as your insurance company would work in collaboration with various hospital networks.
2. Pre and post hospitalization cost coverage: Insurance policy also covers pre and post hospitalization charges up to the period of 60 days, depending on the insurance plans purchased.
3. Transportation Charges: Insurance policy also covers the amount paid to ambulance towards the transportation of insured.
4. No Claim Bonus (NCB): This is the bonus element which is paid to the insured if the insured does not file a claim for any treatment in the previous year.
5. Medical Checkup: Insurance policy also provide options for health checkups. Free health checkup is also provided by some insurers based on your previous NCBs.
6. Room Rent: Insurance policy also covers room expenses depending on the premium being paid by the insured.
7. Tax Benefit: Premium paid on Health insurance is tax deductible under section 80D of the Income Tax Act.
How to Select the Right Insurance Policy
It’s difficult to select the best insurance policies as all insurance company provides a similar type of insurance plan. Hence some of the important points that any Person should look before purchasing any plans are:
1. Sum Assured
2. Minimum Entry Age and renewability clause
3. Room Rent Capping
4. Inclusion and Exclusion
5. No Claim Bonus
6. Other Benefits
In India, people under 45 years of age are not required to undergo a mandatory health checkup when obtaining a health insurance policy. They are, however, required to disclose any pre-existing conditions such as diabetes or hypertension. It is, therefore usually advised that one should get a health insurance when young so that the premium would be less.
Documents Required when buying a Health Insurance Policy
There are few documents that you need to provide such as:
1. Age proof – Any one of Birth Certificate, 10th or 12th mark sheet, Driving License, Passport, Voter ID, etc.
2.Identity proof – Driving License, Passport, Voter ID, PAN Card, Aadhar Card, which proves one’s citizenship.
3. Address proof – Electricity Bill, Telephone Bill, Ration Card, Driving License, Passport, should clearly mention the permanent address.
4.Some plans require a medical check-up (usually for elder people above the age of 45 years)
5. Passport Size Photo
Types of Health Insurance
1. Individual Health Insurance: This policy covers the health expenses and hospitalization expenses of individual who has taken the policy. Premium under this policy is determined as per the age of insured.
2. Family Health Insurance Plan: Under this policy, an individual can include all the family members against multiple diseases under a single cover. Family health plan offers a fixed sum assured for the family members, which can be availed by all members of the family or by any one individual in the family.
3. Senior Citizen Health insurance Plan: This policy is designed for the senior citizens or individuals over 60 years of age offering protection from health issues during old age.
4. Surgery and Critical Illness Insurance Plan: This plan is suitable for the insured that requires treatment against critical illness, such as kidney failure, paralysis, cancer, heart attack etc. As the medical expenses of these treatments are very high, the premium applicable to these types of policies is also high.
5. Maternity Health Insurance Plan: This policy covers costs, including pre and postnatal care, child delivery expenses of newborn babies. This policy is also covered for the newborn up to a certain period of time as mentioned in the plan. Ambulance costs are also covered.
6. Personal Accident Plan: This policy covers hospitalization expenses in the event of an accident. Premium amount is depending upon the amount of cover taken.
7. Unit Linked Health Plan: These plans offer a unique combination of insurance and savings both at the same time. This policy helps in building a corpus which can be used to meet those expenditures which are not covered by the insurance policy.
Tax Benefits on Health Insurance
The amount you pay towards health insurance premium claimed as a tax-saving deduction under Section 80D. You can claim ₹25,000 annually for a health insurance policy for yourself. If you also pay the premium for a health insurance policy for your parents, you can claim up to ₹30,000 for the same as well.
Earning money is not at all useful if you don’t have a life. Think about yourself and your family and the importance of life. You know the importance and benefits of having a Health Insurance Policy. Start one, if you haven’t already.