Health Insurance – Why they are a must for all?

What is the need to spend money on health insurance? Do you think on similar lines? If yes, you are one of the many who think the same. Most people tend to think that Health Insurance is something that they need to think about only when you are ageing or have ill health. An accident or natural disaster or communicable disease can happen to anyone at any age. Such situations can drastically alter a person’s life, causing huge expenses towards hospitalization and after care. Pollution and changing lifestyle sets in diseases even to youngsters. Coming across persons with heart disease or diabetes is common now days. Diseases like cataract which was earlier associated only with old age are now gradually settling with persons in their 50s.rnA mediclaim or a health insurance policy is a contract wherein an insurer agrees to provide reimbursement to the insured in an event of hospitalization or any other related expenses. The definition of such expenses is broad and covers all related expenses right from the diagnosis of illness to its treatment, required surgeries, medications and any other medical aid that might be needed. Some reasons why one needs a Health Insurance Policy: • Health related uncertainties: Any one can have a health issue at any point of time. A Health Insurance is the only thing that can support you financially in such a situation. • High Medical Expenses: As medical costs surge one feels the need to have a better financial back up in case there is a medical emergency. • Tax Benefit: Under the Income Tax Policy of India one gets a tax benefit and can save on tax payable if one holds a mediclaim policy. This is done to encourage investments in mediclaim. rnHealth Insurance Policies are broadly of two types: • Individual Health Insurance Policy: This is a plan where an individual can choose a sum insured to suit his/her requirement. Chosen sum insured will provide cover to that individual throughout the policy period. Such a plan can be individually chosen for any/all family members. It is a market practice to encourage more number of persons to enroll under individual mediclaim by providing family discount on premiumrn• Family Health Insurance Policy: In a Family Insurance policy you can insure your entire family under one plan i.e., sum insured. This means there is single policy coverage for a fixed amount which can be claimed for any /all member of the family. The premium paid towards the policy is one. Normally Insurers charge the premium depending upon the highest age of family members and family size. While opting for family mediclaim one cannot get any family discount. rnHealth Insurance Policies however have their own limits and conditions that need to be followed and fulfilled to claim insurance. Some common limitations can include: • Ailments that are known previously i.e. before the policy is bought are not covered under mediclaim policy. • Ailments which are grouped as one year or two year exclusions, which will automatically become payable if one crosses such a waiting period. • Expenses beyond the amount agreed in the contract are not paid as a part of claim by the insurance company. • Most Insurance Companies have a list of hospitals that allow cashless hospitalization for policy holders. While one can avail health care in any registered hospital or hospital complying with the norms specified by Insurer, cashless facility is available only with the hospitals under net work of the Insurer. In other hospitals, Insured person should spend from his pocket and claim for reimbursement. Mediclaims do not reimburse treatments done by way of homeopathy, naturopathy, ayurveda or any other medical science other than allopathy. Health Insurance premium go up based on the age and Insurers generally have an upper age limit beyond which they might either demand medical documents to decide on offering cover or might deny cover due to age. Continuous claim free year is encouraged by Insurers either by offering a Cumulative Bonus which is added up to the sum insured without any additional premium or by offering a discount in premium. Hence it is prudent to insure in younger age and get the utmost benefit out of Health Insurance Policies. While Mediclaim is a common term used for health insurance, various insurance companies float such plans under unique names.