What is health insurance?

Health is our most precious asset yet the most complicated to manage. You may take all the necessary measures and follow a healthy lifestyle, but your health can take a drastic turn before you know it. After all, some critical health issues may manifest unexpectedly. The only way to ensure security is to stay prepared. Now, you can save up and build an emergency fund. However, not knowing what awaits makes it challenging to accumulate the correct amount. Instead, getting health insurance lets you tackle medical emergencies regardless of the inflating costs. For the unversed, this article on what is health insurance can prove helpful and guide you to invest in an excellent health insurance policy. Read on.

About Health Insurance – Meaning and Definition 

Health insurance definition, in simple terms, refers to a contract between you and an insurance provider wherein you pay a premium while your insurance provider covers your medical costs. Under the contract, the insurer promises to cover a range of medical expenses arising from illnesses, accidents, injuries, medical procedures, etc. You can choose the extent of coverage based on your healthcare needs. The coverage you select directly affects the premium you need to pay. Other factors like your age, medical history, lifestyle habits, etc., also impact your premium payable.

Types of Health Insurance Plans in India

Insurance companies offer a variety of health insurance plans to help you meet your distinct medical needs. The most prominent mediclaim plans available in India include the following.

• Individual Health Insurance

Meant for a single person this medical insurance plan covers your individual healthcare needs. You can evaluate the coverage to meet your medical requirements. Such a plan comes with a sum insured amount that only covers the individual insured under the policy and is not transferable to family members or others. The premiums for such plans typically depend on your age and existing medical conditions.  

• Family Floater Health Insurance

Opting for this policy is an economical choice for covering your entire family. Under a family floater health plan, you pay a single premium to cover yourself, your spouse, and your children. Such plans are more affordable than purchasing individual health plans for each family member. Also, you can file multiple claims per year and seek treatment simultaneously until you exhaust your sum insured limit during a policy year. Note that one member's age and pre-existing illnesses may influence the overall premium cost under family floater plans.

• Critical Illness Health Insurance

Critical illnesses like cancers, cardiovascular ailments, kidney failure, etc., typically incur hefty costs due to the extensive, long-term treatment course. Getting a critical illness plan is one of the handy health insurance tips and tricks that help eliminate the financial burden caused by such ailments. With critical illness policies, insurers generally disburse the entire sum insured in one shot, saving you from filing multiple claims. Note that the policy ceases to exist immediately after the insurer honors the claim.

• Group Health Insurance

Group health insurance is a type of mediclaim policy that employers buy for their employees to boost morale and retain employees. It is one of the many perks given for workforce welfare and is a basic policy that covers employees and, sometimes, their kin. The policy lasts only until one is employed with an organisation. Employers may sometimes allow employees to enhance coverage by paying a little extra from their pockets.

• Senior Citizen Health Insurance

Health insurance policies designed for individuals above 60 years are known as senior citizen health policies. Such plans cover pre and post-hospitalization expenses for senior citizens. Additionally, it also comes with domiciliary care and psychiatric benefits. However, such policies typically cost more in terms of premiums as senior citizens are more prone to illnesses. Insurers also consider senior citizen policyholders' existing health conditions before determining the premiums and sum insured.  

 

Key Features of a Health Insurance Policy

Having explained what is medical insurance, let us assess its many salient features. You can customize your health plan based on your requirements. Insurers offer this flexibility to meet distinct customer needs. Moreover, they incorporate several unique features, as listed below.

• Comprehensive Coverage 

Medical care includes a wide range of expenses. You typically go through consultations, medication, hospitalization, treatment, etc upon receiving a medical diagnosis. Through these different stages, medical costs tend to add up. Mediclaim plans offer comprehensive coverage for all such expenses. Some examples include doctor fees, the cost of diagnostic tests, ambulance charges, hospital room rents, surgery expenses, post-hospitalization costs, etc.

• Add-ons

A basic health insurance plan primarily provides financial protection. But if you have specific healthcare needs, you can select additional riders to meet your specialized medical concerns. You can purchase these riders by paying a little extra over your premium costs. You must conduct a cost-to-benefits analysis before buying these riders. Standard add-on covers include maternity cover, zone upgrade, critical illness cover, room rent waiver, hospital cash, etc.

• Cashless Settlement Facility

Medical emergencies lead to emotional distress and prove financially draining. Moreover, you need to arrange funds before beginning treatment, which can be pretty challenging during sudden medical crises. Insurers understand this and provide a cashless settlement facility. With cashless hospitalization, you can seek treatment at an insurer's network hospital. You simply need to inform the insurer about the network hospital where you intend to seek treatment, and the insurer directly settles the hospital bills up to the sum insured.

• Free-Health Check-Up

Staying on top of your health is crucial. Doing so allows you to detect ailments in their nascent stages and seek treatment at the earliest. Your medical insurance plan usually includes a preventive health check-up provision, wherein you can undergo routine tests. While some insurers offer this facility as part of your medical policy, others may provide preventive check-ups as an add-on rider. Also, the frequency and coverage limit for this facility depends on the sum insured and varies from insurer to insurer.

• No-Claims Bonus

Your mediclaim plan comes with a benefit known as a no-claim bonus. A no-claims bonus allows you to increase your sums insured by a specific percentage each year without increasing the premium amount. You can enjoy this benefit if you do not file any claim in a policy year. Typically, the insurer increases your sum insured by 50% for five consecutive claim-free years. Thus buying health insurance when you are younger (and less likely to file claims) is among the most crucial health insurance tips that can increase your sum insured. It helps you bear the rising medical costs attributed to inflation.

• Lifetime Renewability

Healthcare costs are unpredictable due to inflation. Also, as you grow older, getting the desired coverage requires paying a higher premium. Contrarily, buying a health policy early when you have little to no health complications is a wise decision. The lifetime renewability feature lets you continue enjoying the benefits of getting coverage at a young age. It provides a financial shield for life and proves incredibly convenient during your retirement years.

Importance of Buying a Health Insurance Policy

Buying medical insurance is the best decision you can make for your health. It saves you from emotional and financial distress during medical emergencies. Some other reasons to consider it are as follows.

• Savings Protection 

Building savings is the best way to secure your future. Savings empower you to enjoy a stress-free retired life and achieve your various financial goals. However, medical costs can significantly impact your savings and hinder your financial planning. You can safeguard your savings from depleting by investing in health insurance. A crucial fact about health insurance is that it acts as a financial cushion, weathers unexpected medical expenses, and protects your savings.

• Beat Inflating Medical Costs

The research and advancement in health and human services have drastically changed how the health insurance marketplace functions. This has led to increasing medical costs. Dealing with such inflating expenses can quickly get overwhelming. In such scenarios, you cannot rely on your saved-up capital. The only way to ensure complete protection is to encash your medical insurance policy. Your insurance policy compensates for medical emergencies at the prevailing healthcare costs in the market.

• Tax-saving

To encourage citizens to invest in health insurance, the Indian government offers tax deduction benefits on health insurance premiums. Under Section 80D of the Income Tax Act, you can claim tax deductions of up to ₹25,000 for investing in health insurance policies for yourself, your spouse, and your dependent children. You can claim an extra ₹25,000 and ₹50,000 in tax deductions if you purchase policies for your parents aged under and over 60 years, respectively. Additionally, if you are a senior citizen purchasing insurance plans for your senior citizen parents, you can enjoy total tax benefits of up to ₹1 lakh per annum.

• AYUSH program

Using alternative treatments is a common practice for curing medical conditions. It is either applied independently or in combination with conventional therapies. Regardless of the approach, health insurance policies include coverage for such practices under the AYUSH program. AYUSH stands for Ayurvedic, Yoga & Naturopathy, Unani, Siddha, and Homeopathy treatments. The central government issued this mandate to address the demand for alternative therapies and treatment courses in India.

• Treating Mental Health Conditions

For the longest time, health plans mainly catered to treating physical ailments. However, considering the increasing awareness and rise of mental illnesses, the government mandated the Insurance Regulatory and Development Authority of India (IRDAI) to include mental health coverage under regular health insurance plans. This provision was incorporated under the Mental Healthcare Act of 2017, under which you can raise claims for treating depression, post-traumatic conditions, anxiety disorders, etc.

Health Insurance Tips and Tricks to Purchase Your Insurance Plan

Selecting the right health insurance policy can get overwhelming, considering the number of options. Use these health insurance tips to make your decision easier.

• Assess Your Medical Needs

While choosing a mediclaim plan, you must consider the kind of coverage you need, the budget you can spend on premiums, and the medical service you may require. Insurers provide all the necessary health insurance information on their websites to help you make an informed investment decision. Ensure you thoroughly review all the health insurance details before purchasing a policy.

• Test Customer Service

Good customer support makes a massive difference in promptly settling your doubts, grievances, and complaints. The last thing you want is to stay on hour-long calls to resolve your concerns while dealing with a medical emergency. Hence, you must evaluate the efficiency of customer service. Make this an essential factor of consideration while comparing insurers. This seemingly simple step saves you from despair when you need assistance.  

• Consider the Insurer's Claim Settlement Ratio

The claim settlement ratio is the total percentage of claims settled against those received by the insurance company. It indicates an insurer's efficiency in honoring claims. You must research and select an insurer with a high claim settlement record. You can find information about various insurers' claim settlement ratios on the IRDAI website.

• Compare Offers 

Getting an insurance quote is easier than ever in this internet era. Most insurers today provide online calculators that can help you get a rough estimate of the policy costs. You only need to input information like your age, gender, name, location, and contact number in these calculators to obtain a personalized quote. You can conduct this exercise on various insurers' websites and shop around until you find an offer that fits your budget. Comparing multiple quotes and offers is among the many health insurance tips and tricks that can help you find an affordable policy. Plus, it gives you room to negotiate with your preferred insurance provider.

Important Jargon and Terminologies to Know About Health Insurance

A crucial part of learning what is health insurance is understanding the various jargon associated with it. These terminologies are repeatedly used in medical insurance policy documents, so it is critical to understand their meanings. Some of the most prominently used health insurance jargon include the following.

• Sub-Limits

The cost of medical services varies based on your preference. You may go for the minimum requirement or choose a premium facility. But when you have a healthcare policy, staying mindful of the sub-limits is crucial before making a choice. These are caps on the claim amount for utilizing specific services or undergoing certain treatment procedures. The insurance companies specify them as an amount, or a percentage of the sum insured.

• Exclusions

Besides the coverage, insurers include this section in the policy document to rule out the conditions or situations entertained during the claims. Going through it helps avoid unwanted surprises later. The exclusion clause differs from one insurance provider to another. However, the standard aspects excluded under medical insurance include cosmetic surgery procedures, pregnancy termination, intentional harm, etc. In such cases, you must bear the expenses out of your pocket.

• Deductible

A deductible is another critical term mentioned under the health insurance details document. It refers to the medical or hospitalisation expenses you are obligated to bear before you can officially raise an insurance reimbursement or cashless claim. You can choose between policies offering voluntarily or involuntary deductibles. Opting for voluntary deductibles can reduce your premium costs significantly, especially if you buy health insurance when you are younger and less likely to file claims. Through compulsory deductibles, insurers prevent the possibility of trivial claims and fraud.  

• Waiting Period

Insurers withhold from compensating insurance claims until you complete the waiting period. A regular health insurance plan comes with a nominal waiting period of 30 days to six months, during which you cannot file claims. However, policies covering pre-existing and critical illnesses come with waiting periods of two to four years. The exact waiting period differs from insurer to insurer; the only acceptable exception is if you need to file a claim in case of an accident.

• Network Hospitals

Insurance companies enter into tie-ups with a network of hospitals to facilitate cashless claim settlement. They typically tie up with several hospitals in various cities where you can seek treatment merely by providing your insurance policy details. While choosing an insurance provider, you must check their network of hospitals and ensure it includes your preferred hospitals. You can easily find this health insurance information on the insurers' websites. 

Steps to Buying a Health Insurance Policy

Now that you know what is medical insurance, its types, features, and importance, buying health care policies should become more manageable. Today, you can purchase mediclaim policies directly through the insurer's website by following these steps.

1. Compare insurers based on their quotes and offerings.
2. Visit your selected insurer's website or download their app.
3. Select an insurance plan based on your needs.
4. Fill in details like your name, birth date, location, etc.
5. Submit scanned copies of documents like your ID and address proof, PAN card, and passport-sized photos.
6. Make the payment using digital payment options like bank cards, net banking, UPI wallets, etc.
7. Wait for the approval of your request.

After verifying your details, the insurer sends you the policy documents via email. The insurance plan comes with a one-year validity, and you must renew the policy every year for uninterrupted coverage. Insurers typically send notifications via emails and SMS, reminding you to renew your policy. They also offer a one-month grace period if you cannot renew your insurance plan on time. If you fail to renew your policy, you stand to lose many benefits (including the no-claims bonus benefit) and may have to buy a brand-new policy. You can easily renew the policy on the insurer's website.

You can also purchase and renew your health insurance plan offline by visiting the insurer's website or through insurance agents.  

 

Why is a Health Plan better than Health Insurance?

Traditional Health Insurance generally covers Hospitalization expenses when admitted for over 24 hours. LivLong Health Plan on the contrary covers not just hospitalization expenses (powered by IRDAI approved Insurer) but also expenses around Doctor consultations, lab tests, pharmacy, and more, providing much higher value for money.

 

Buy LivLong’s One-Circle Health Plan today - Experience quality Healthcare year long

 

Final Note

Investing money is the only way to safeguard and grow it. Of all investments, health insurance is perhaps the most critical. Besides understanding what is health insurance, you should invest in an excellent healthcare policy that can come to your aid when you need it the most. Health insurance significantly reduces your out-of-pocket expenses, protects your savings from being drained, and empowers you to seek the best treatment at your preferred medical facilities.