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Blog > Health Insurance > All you need to know about health insurance

Getting health insurance is something that’s recommended by everyone from health experts to financial experts, and is, today, one of the most essential aspects of health and financial planning. So what exactly are health insurance plans? Why is it necessary to have a health insurance plan? Read on to find out everything you’d want to know.

What is health insurance?

Simply speaking, health insurance acts as a financial protection against medical emergencies by covering the expenses incurred for treatments. These expenses maybe covered wholly or partially, depending on the type of plan purchased. Health insurance plans reimburse the costs incurred during sickness, injury, hospitalization or pay the medical care provider of the insured person directly.

Why do you need health insurance?

Health insurance is necessary for a number of reasons such as 

  • Medical emergencies – Health problems come up without warning and can rapidly drain your financial resources. The cost of treatment, medication, and hospital stays can cost a lot. In such instances, a health insurance policy can cover the cost of all medical emergencies.
  • Rising health care costs – Medical costs are rising consistently. In fact, for serious conditions like a heart surgery or cancer treatment, the total cost could run into several lakhs. Having a health cover can mitigate this risk. 
  • Wider coverage – Most plans have flexible ailment/disease coverage with some health plans covering as many as 30 critical illnesses and over 80 surgical procedures.
  • Secure future – Having a health insurance plan is an investment for your secure future, both financially and medically. Especially if you are the sole provider for your family, getting health insurance plans for your family is even more necessary in case of any unforeseen event.
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Types of health insurance

It’s essential to first know and identify the type of health insurance plan that suits your requirements.
Health insurance plans are broadly divided into 2 types -
Indemnity plans – This type of health insurance covers the costs of hospitalization up to the sum insured. These plans comprise of
  1. Individual health insurance – It’s a health plan that covers hospitalization costs, of the insured individual where the person can claim expenses up to the basic sum insured. Also, in cases where a person has individual health insurance and their spouse is covered, both can claim expenses up to sum insured, individually.
  2. Family health insurance – This is also known as the family floater plan. It covers the entire family with the sum insured divided equally between members. These family health insurance plans have comparatively lower premiums.
  3. Group health insurance plans– These are primarily health insurance plans for corporates (medium & large) and are generally offered by the organizations to their employees as a perk for retaining resources.
 Defined-benefit plans – A defined benefit plan is one where the insured person is compensated a lump sum amount on detection of certain illnesses, accidental injuries or death. These type of plans include
  1. Critical illness insurance - Critical illness policy is designed to protect you against medical expenses occurring due to certain specific illnesses such as cancer, major organ transplant, stroke, aorta graft surgery, kidney failures, paralysis, first heart attack, multiple sclerosis, and coronary artery bypass surgery. The treatment for any of these illnesses can be very expensive. Critical illness cover lessens the risk to some extent and pays a pre-decided amount, to the insured person, for treatment irrespective of pre or post-hospitalization costs.
  2. Personal accident plan – This personal accident plan covers the insured person against accidental injury or death. A lump sum amount is paid either to the insured person, or his/her family in case of death or loss of income due to partial or complete disability.
In addition to the above-mentioned health plans, there are some other specific health insurance plans such as
  • Travel Insurance - Another type of insurance that is very popular, especially among frequent international travellers is travel insurance. Travel insurance includes several types of coverage such as trip cancellation or interruption coverage, baggage and personal effects coverage, medical expense coverage, and accidental death or flight accident coverage. Travel health insurance includes cover for medical expenses incurred on trips such as sudden illnesses or injuries, pre and post-hospitalization costs as well as protection against temporary or permanent disability.
  • Senior Citizen Insurance – People of 60 years and above can avail of this health insurance policy which is known to provide extensive coverage to the elderly.
  • Maternity insurance – As the name suggests this health insurance policy is for pregnant women. Some plans cover the mother as well as new-born babies.
Features of health insurance Plans

Most health insurance plans offer these facilities
  • Cashless hospitalization
  • Pre and post hospitalization
  • Online policy renewal
  • Claim settlement
  • Health policy upgrade
  • Grace period to pay the premium
Some points to remember about health insurance
  • Buy health insurance plan at an early age – The earlier you buy health insurance the lesser premium you will pay. Also as you age it becomes difficult to get health insurance with existing medical conditions.
  • Don’t rely on company insurance completely –In case of a job change that medical coverage ceases to exist and buying health insurance at that stage can be expensive.
  • Get tax benefits – Health insurance premiums are eligible for deductions from taxable income up to 25,000 per annum under Section 80D of the Income Tax Act, 1961. In case you have health insurance for parents then you can avail an additional deduction up to 25,000.
 Today, health insurance has become a necessity with soaring medical care costs. Some of the best health insurance in India is provided by a number of reputed companies. Before choosing your health insurance plan, it is advisable to conduct your own research, compare various plans in terms of their offerings, premium amounts, claim settlement ratios etc.
Hopefully, this article has been informative in providing all the details of health insurance. If you wish to explore more, do visit Website.

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