Health insurance is an insurance policy that protects the policyholder and his/her family against the medical costs that arise due to an accident, illness or on the diagnosis of any serious disease. The health insurance plan offers cashless treatment with network hospitals or reimbursement facilities for the medical cost of the treatment. Under section 80D of Income Tax Act, 1961, you can apply for tax deductions on paying health insurance premiums.
Insurance companies offer advantages to policyholders. They are as follows:
Cashless Treatment:It allows the insured to get the required treatment in network hospitals without paying a single penny during hospitalization up to the sum assured limit. The insurance company pays on your behalf and allows you to have a complete focus on your treatment.
Pre & Post Hospitalization Expenses: The expenses prior to hospitalization and after discharge from the hospital up to a specific period are covered by health insurance policy only if the expenses are associated with the illness subject to terms and conditions of the insurance company.
Tax Benefits: On buying a health insurance policy, you will be liable to receive tax advantages for the premiums paid under Section 80D of the Income Tax Act, 1961. One can avail tax benefits up to a certain limit depending upon the age of the policyholder and his/her parents (if any).
Daily Hospital Cash: This benefit is very useful during hospitalization as this will provide daily cash to a certain limit to take care of the additional expenses in the hospital like food, traveling, etc. Usually, the benefit amount is up to Rs.2,000 per day but it may vary in case of accidents and ICU procedures.
Organ Transplant Expenses: The costs for the transplantation of an organ are bearable by the insurance company. Health insurance covers the surgery expenses related to organ donation. However, the costs for complications after surgery, organ donor expenses, and medical tests are not covered under the same.
No Claim Bonus (NCB): It is a discount that you will receive from the insurer for every claimless year. NCB comes as a discount on the payable premium at the time of the renewing policy or whenever you want to increase the Sum Assured amount. At the time of renewal, you must check for No Claim Bonus benefit.
Free Health Check-Ups: To motivate the policyholders towards a healthy life, insurance companies offer free occasional medical check-ups. Depending on the company and the type of policy, you will be eligible for a master health check-up.
Lifelong Renewability: This keeps you insured for the long term. Most of us try to follow a healthy lifestyle but illness or accidents could take us by shock. Therefore, having a health insurance policy acts as a blessing in hard times.
Restoration Benefit: Once the sum assured amount is completely used, the insurance company will restore the amount automatically and you don't have to pay any additional cost for the benefit. The plans with restoration benefits are expensive as compared to normal health insurance policies and are applicable as per the clauses of the policy.
To deal with the different needs of customers, there are multiple forms of health insurance plans available. Such plans are mentioned below:-
Individual health insurance covers the health expenditure of a single person or an individual, but there's always flexibility of availing the bigger sum assured. The premium that we pay annually depends on the amount of sum assured.
Critical Illness plan offers a fixed benefit/payout in case of any critical illnesses specified under the policy. With the lump sum benefit, you will be able to pay the huge hospitalization costs and get the treatment on time.
Senior Citizen Health Plan is designed especially for the old age people who are above 60 years of age. This plan is to fight against all medical contingencies during old age. As per the Insurance Regulatory and Development Authority of India (IRDA) regulations, every insurance company must insure people up to the age of 65 years.
Maternity health insurance is offered by almost every health insurance company that covers pre and post-natal care, child deliveries, and sometimes vaccination expenses of newborn babies.
Family Floater Health Insurance allows to insure all family members under a single policy. All the family members can enjoy the benefit of the entire sum assured. The amount of the premium paid is less as compared to individual plans. The policyholder along with the spouse, dependent children and the parents can be included in the plan.
Unit Linked Health Plan (ULHP) is a combination of health insurance and investment. Along with the health protection, ULHPs will help you in building a corpus that can be used by the investor to meet expenditures that do not get covered under health insurance plans.
The most important part of an insurance policy is the claim settlement process. People often worry about the claim settlements. Some insurance companies offer direct claim settlement process and some take the help of TPAs (Third Party Administrators) for claim settlement. The claim settlement process takes place in two forms which are mentioned below:
You can avail cashless treatment facilities only in the networked hospitals of the insurance company. The TPA must be notified beforehand in case of planned hospitalization, or within a specified timeframe in case of an emergency. The hospital's insurance desk helps with all the paperwork. The TPA has to approve the mediclaim amount, and the hospital will settle it with the insurer. There are likely to be exclusions i.e., expenses that the TPA won't pay. Such expenses must be settled by the patient directly at the hospital's cash counter.
The insurer can avail of the reimbursement facility both at networked and non-networked hospitals. Here, you can avail of treatment facilities and settle the bill directly with the hospital. You can then claim reimbursement of the expenses from the TPA by submitting relevant bills and receipts of treatment.
