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Basics of Health Insurance

A good health insurance plan can be your savior during medical emergencies. Read this blog to learn the basics of health insurance.

  • 4,838 Views | Updated on: Dec 27, 2023

Health insurance is medical coverage provided by an insurance company that looks after the financial expenses arising from medical issues. It helps you cover expenditures, including consultation fees with the doctor, surgery expenses, hospitalization costs, expenses for medication, etc. As an insured person, you will either have to pay the bills out of your pocket, which your insurer will reimburse later, or the insurer will directly settle all expenses with the hospital.

Good health is essential to living a carefree and fulfilling life. While everyone wants to live a healthy life, medical emergencies can happen anytime to anyone. No matter how fit you are, one thing you can never predict is health issues and illnesses. Health issues can develop into huge bills and burn a hole in your pocket. However, under such circumstances, one thing proves highly beneficial: health insurance plans!

In this blog, we will help you understand the basics of health insurance, including its needs, benefits, and types.

Health Insurance: Key to a Healthy Future

No matter how careful you are, falling ill is something that is inevitable. Therefore, it is advised to be prepared for unexpected medical emergencies. Instead of stressing over the medical expenditure, you should focus on investing in a health insurance plan that will ensure financial stability during medical emergencies.

Let us consider an example - a person suffering from a critical illness has to be on extensive prescription of medication. Each medicine may cost in the range of thousands. Assuming the treatment can last from months to years, these expenses alone can amount to a large sum of money. In addition, there are tests, consultation fees, hospital fees, etc. Thus, one illness alone can drain your entire savings. Therefore, it is best to buy health insurance as early as possible. That way, you ensure the well-being and comfort of your family and yourself in the long run.

Need for a Health Insurance Plan

Health insurance is not just a financial product but a crucial tool that provides you and your family with essential protection and peace of mind. Here are some compelling reasons that make health insurance necessary:

Reduced Financial Burden

One of the primary reasons for having health insurance is financial protection. Healthcare costs are rising rapidly; a single medical emergency or hospitalization can lead to significant expenses. Health insurance ensures you do not have to deplete your savings or take on crippling debt to cover medical bills.

Access to Quality Healthcare

Health insurance lets you access a network of hospitals, doctors, and healthcare providers. It means you can receive timely medical care and treatment without worrying about the cost, ensuring you get the best possible treatment.

Family Protection

Health plans often include options for family coverage, ensuring that your spouse, children, and dependent parents are protected. Family floater plans provide comprehensive coverage for the entire family under a single policy.

Eligibility Criteria for Obtaining a Health Insurance

Getting health insurance is beneficial for everyone. It is better to have it at a younger and healthier age; the older you get, your premium amount increases. Mentioned below are some of the eligibility criteria for applying for a health insurance plan:

Age

The minimum age for kids to get health insurance is between 16 to 18 years. For adults, it ranges from 18 to 65 years. In some cases, it may even go up to 70 years or beyond, depending on the insurer and plan you choose.

Income

Some health insurance plans have income-based eligibility criteria. It can be crucial for government-sponsored health schemes or plans designed for individuals and families with limited sources of income.

Medical History

Insurance companies often ask for your medical history when you apply for a health policy. Pre-existing medical conditions may affect your eligibility or premium rates. Some insurers may provide coverage for pre-existing conditions after a waiting period.

Types of Health Insurance Plans

The availability of different insurance plans makes it convenient to select one that suits your needs. Here are some of the most popular types of health insurance in India:

Individual Health Insurance

Covers an individual’s medical expenses. It is ideal if you want personalized coverage.

Basics of Health Insurance - Infographic

Family Floater

A single policy that covers your entire family, including spouse, children, and sometimes parents. It is cost-effective and convenient.

Senior Citizen Health Insurance

Tailored for senior citizens, this policy addresses health concerns for individuals above the age of 60.

Group Health Insurance

Offered by employers to their employees. It is an excellent employee benefit and often includes maternity and dental coverage.

Critical Illness Insurance

Specialized plan that covers life-threatening diseases like cancer, heart attacks, and organ transplants. It provides a lump sum amount to cover treatment costs.

Accidental Insurance

Covers financial expenses that occur during any accidental event resulting in partial or full disability of the policyholder

Benefits of Health Insurance

The benefits of health insurance makes it a must-have for anyone looking for a medical emergency backup. The advantages are endless; however, the most important ones include:

Cashless Treatment

Having healthcare insurance offers cashless treatment at the network hospitals of the insurance company. You can also avail reimbursement from the insurance company if you are getting treated at a hospital of your choice instead of a network hospital.

Tax Benefits

As per the Income Tax Act (ITA) 1961, Section 80D offers tax benefits for premiums paid for health insurance policies. The maximum deduction, for instance, is ₹25,000 if you only pay insurance premiums for yourself and your partner.

Comprehensive Coverage

A health plan makes you eligible for several coverage benefits, including hospitalization and medicine costs, diagnostic bills, treatments and surgeries.

Peace of Mind

It is one of the most satisfactory benefits of a health insurance plan. Assurance of a secured future makes it a must-have option. It also brings the benefit of having a steady financial reserve to tackle uncertainties.

Considerations While Buying Health Insurance

Choosing suitable medical insurance is challenging but crucial if you want to be adequately prepared for any unexpected medical expenses. Consider these factors when selecting a health insurance policy:

Premium vs. Coverage

Balance your budget with the coverage you need. A lower premium might seem tempting, but it only covers some of your medical expenses.

Network Hospitals

Check if your preferred hospitals are in the insurer’s network. Going out of network could lead to higher expenses.

Exclusions

Read the fine print. Every policy has exclusions – specific treatments or conditions that are not covered. Be aware of what is not included.

Claim Process

Understand the claim process thoroughly. Know how to file a claim, the documents needed, and the settlement turnaround time.

No-Claim Bonus

Some policies offer a bonus for every year you do not make a claim. It is a great incentive to stay healthy.

Way Forward

Remember, health insurance is not just a financial investment but an investment in your well-being and peace of mind. It is your shield against unpredictable health issues. It ensures that medical bills do not wipe out your hard-earned savings. So, research, choose the right policy for you and your family, and rest easy, knowing you have a safety net.

Key Takeaways

  • Health insurance provides financial protection against emergency medical expenses.
  • There are various types of health insurance plans. Choose the right one as per your needs and budget.
  • They can give you access to quality healthcare without worrying about the cost.
  • When buying health insurance, consider premiums, coverage, network hospitals, exclusions, and no-claim bonuses.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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