We all want to be financially stable. However, with rising costs of healthcare in India, it is easy to lose all your savings due to expensive medical treatments. That is the reason you must invest in a health insurance to protect yourself from the financial strain of a medical emergency.
However, with so many insurance providers and health plans available in India, it can be difficult to choose the best health insurance plan for a first time investor. But don’t worry, this article will tell you everything there is to know about health insurance benefits and how you should buy the best health insurance.But first, let us understand the basics.
Types of health insurance
There are two main categories of health insurance – indemnity plans and definite benefit plan. The indemnity plans are conventional medical covers that take care of hospitalization costs based on your sum assured value. Definite plans, on the other hand, offer cash benefit of a lump sum amount that is paid upon diagnosis of a disease.
Indemnity plans include family floater, individual, senior citizen plans, unit linked health plans, and Mediclaim. Definite benefit plans include critical illness cover, personal accident cover, and hospitalization cash cover.
Importance of health insurance
Here are some reasons why you need to invest in a health insurance.
- Saves you money
When you invest in the best health insurance plan, you can rest assured that your savings will remain intact in case of a medical emergency. Depending on your policy, the insurer will either pay your medical bills directly or reimburse you its value.
- Family protection
It protects you and your loved ones by covering all kinds of treatments. Therefore, you are always financially prepared for any medical contingency.
- High medical costs
Increase in costs has made healthcare services inaccessible to most people. However, if you have a health insurance plan, you will be able to gain access to quality care and afford the best treatment available to you if you seek treatment in one of the network hospitals listed in your policy document.
- Protects you against critical illnesses
If you are diagnosed with a critical illness, your health insurance will cover all your treatment costs, giving you an opportunity to focus on your recovery rather than worrying about your bills.
How does health insurance work?
The health insurance plan you choose will cover your hospitalization in part or fully. Here are some things you need to keep in mind when buying a health plan to ensure that it works effectively:
- Choose the right cover
A health insurance policy should be able to meet all your medical needs. Therefore, you need to assess your assess your requirements before you start looking for a policy. Choose the right policy type and make sure that it covers everyone adequately.
- Sum assured
The insurance coverage means the value of sum assured that you as a policyholder will get in exchange for regular premium payments. You must choose a policy that offers adequate coverage at an affordable premium.
- Look for daily allowance
Some insurance providers also give you the option of covering your day-to-day expenses by paying you daily allowance for the days you have been hospitalized.
- Claim settlement process
Your claim will either be processed cashless or via reimbursement. Cashless treatment is available to you if you get treated in one of the hospitals listed in the insurer’s list of network hospitals. In this case, the insurer will directly settle the bills with the hospital for planned or unplanned hospitalizations. Reimbursement, however, requires you to submit the bills for reimbursement. But you have the flexibility of choosing the hospital of your choice.
Health insurance plans are usually active for a year. If you forget to renew it, the policy lapses. Usually, an insurance provider gives you a grace period of up to 6 months to pay the outstanding premiums for the policy to be active again.
- No Claim Bonus
If you do not makes claims on your policy, you are entitled for a no claim bonus, that can be either a discount or an addition to your sum assured value.
Features of health insurance
Here are some of the most common features of the best health insurance plans:
- Financial security against critical illnesses
A comprehensive health insurance plan will protect you against high medical costs incurred due to critical illnesses, such as cancer, stroke, kidney failure, etc.
- Co-payment clause
When a percentage of the total medical expense is to be borne by the policyholder, it is known as co-payment clause. The insurance provider will clear the balance after payment of the policyholder’s share.
- Tax saving
You can save taxes on your health insurance premiums u/s 80D of the income tax act.
You have the flexibility to reduce your premium after a certain period or change the policy duration. Health insurance providers are also willing to make adjustments to your policy terms based on your lifestyle.
When you are looking for a health insurance plan, remember that knowledge is power. Educate yourself about these plans to make an informed decision.