what-is-health-insurance

Health Insurance – Definition, Types & Benefits

With the constant rise in healthcare cost and increasing severe and infectious illnesses day by day, getting health insurance has become a necessity.

What is Health Insurance?

Health Insurance provides coverage for medical expenses that incur in the event of a medical emergency arising due to an illness, injury and other medical condition.

Buying a health insurance plan provides financial guard against medical treatment expenses and thus, provides peace of mind. Typically, it covers medical expenses including in-patient hospitalization, pre & post hospitalization, day care procedures, etc.

Note: The coverage available may differ from one insurer to another insurer.

Whether I need to Buy a Health Insurance Plan?

Yes, you need a health insurance plan that covers your medical treatment expenses. With the medical inflation increasing everyday, medical treatments have become extremely expensive and tough for people to afford.

Let’s go through some of the reasons why you should have a health insurance plan.

  • Cover Medical Treatment: It pays for your medical expenses such as hospitalization, medicines, doctor’s consultation fee, etc.
  • Quality Medical Treatment: With coverage of medical treatment expenses, you can easily get the best quality medical care.
  • Cover Severe Illnesses: It covers the treatment of critical diseases such as cancer, heart attack, COVID-19, etc.
  • Safeguard Your Savings: It pays for your medical expenses and you don’t need to pay for it from your pocket. It thus protects your hard-earned savings.
  • Peace of Mind: By covering your medical expenses, you stay protected against medical treatment expenses. It ensures financial peace of mind.

Types of Health Insurance

Broadly, there are two basic types of health insurance.

Mediclaim Plan

Mediclaim plan (or, mediclaim policy) is a type of health insurance that provides coverage for your medical treatment expenses, in case of hospitalization. Under this medical policy, the insurance company pays for the actual medical treatment cost incurred, upon submitting original bills. These types of medical plans cover you up to the sum insured (health cover) limit.

Critical Illness Insurance Plans

Critical Illness Insurance Plans offer coverage for specific life-threatening illnesses. Unlike mediclaim plan, a critical illness policy pays a lumpsum coverage amount in the event of diagnosis of a covered critical illness and not on actual medical expenses incurred.

What are the Benefits of Having Health Insurance?

Take a look at key benefits you can avail after buying a health insurance plan.

  • In-patient Hospitalization Expenses: It covers medical expenses after hospitalization for at least 24 hours. It includes hospital room rent, cost of medicines, diagnostic test fees, doctor’s fee, etc.
  • Pre & Post Hospitalization: Covers medical expenses that incur before and after hospitalization. Pre & post hospitalization expenses are covered for a specific number of days, as per the policy chosen.
  • Day Care Procedures: Medical procedures or treatments that require hospitalization for less than 24 hours are also covered
  • Cashless Treatment: When you go for hospitalization with your insurer’s network hospitals, you can avail cashless treatment. The insurance company will directly pay for the medical bills to the hospital and you don’t need to pay for hospitalization expenses.
  • Pre-existing Diseases: It also provides coverage for pre-existing illnesses, but with a certain waiting period. The waiting period will be applicable, as per the policy terms & conditions.
  • Other Benefits: You can avail other benefits such as emergency ambulance, health check-up, AYUSH treatment, vaccination expenses, etc.

How to choose a health insurance plan?

Given below are the key aspects that you need to consider before choosing a health insurance plan.

  • Right Health Coverage: You should choose a health cover that helps meet your entire family’s medical care needs. Consider your health insurance requirement and then pick a right one.
  • Get Affordable Cover: When you are seeking for a health insurance policy, you should check various plans online, compare its benefits and pick the one that offers you a customized health cover in affordable premium.
  • Health Plan Renewability: You should choose a health plan which offers lifetime renewability. It is helpful to get yourself covered during the later stages of life.
  • Network Hospitals Coverage: Before buying a health plan, you should check whether your preferred hospitals are covered in the list of network hospitals under the chosen health plan.
  • Claim Settlement Ratio: In health insurance, claim settlement ratio is termed as Incurred Claims Ratio (ICR). You must pick a health from insurer that has high ICR which ensures high chances of settlement of health claims.

Also Read: Top 10 Health Insurance Companies in India

Final Words:

Health Insurance provides coverage against medical expenses that incur due to hospitalization. This insurance cover pays for various medical expenses including in-patient hospitalization, pre and post hospitalization, daycare procedures, cashless treatment, and many more.

 

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