Health Insurance

Health insurance is an agreement whereby an insurance company agrees to undertake a guarantee of compensation for medical expenses in case the insured falls ill or meets with an accident, which leads to hospitalization of the insured. Generally, insurance companies have tie-ups with leading hospitals to provide cashless treatment to the insured. In case the insurance company has no tie-ups with the hospital, they reimburse the cost of expenses incurred by the insured. The government also promotes health insurance by providing a deduction from income tax.

Importance of Health Insurance

Buying a health insurance policy for yourself and your family is important because medical care is expensive, especially in the private sector. Hospitalization can burn a hole in your pocket and derail your finances. It will become even tougher if the person who brings in the money is now in a hospital bed. All this can be avoided by just paying a small annual premium which would lessen your stress in case of medical emergencies. A good health insurance policy usually covers expenses made towards doctor consultation fees, costs towards medical tests, ambulance charges, hospitalization costs, and even post-hospitalization recovery costs to a certain extent.

Benefits of having a Health Insurance Policy

• Cashless Treatment: If you are insured, you can get cashless treatments as your insurance company would work in collaboration with various hospital networks.
• Pre and post hospitalization cost coverage: Insurance policy also covers pre and post hospitalization charges up to the period of 60 days, depending on the insurance plans purchased.
• Transportation Charges: Insurance policy also covers the amount paid to ambulance towards the transportation of insured.
• No Claim Bonus (NCB): This is the bonus element which is paid to the insured if the insured does not file a claim for any treatment in the previous year.
• Medical Checkup: Insurance policy also provides options for health checkups. Free health checkup is also provided by some insurers based on your previous NCBs.
• Room Rent: Insurance policy also covers room expenses depending on the premium being paid by the insured.
• Tax Benefit: Premium paid on Health insurance is tax deductible under section 80D of the Income Tax Act.

How to Select the Right Insurance Policy

It's difficult to select the best insurance policies as all insurance companies provide a similar type of insurance plan. Hence, some of the important points that any person should look before purchasing any plans are:

• Sum Assured
• Minimum Entry Age and renewability clause
• Room Rent Capping
• Inclusion and Exclusion
• No Claim Bonus
• Other Benefits

Eligibility Criteria

In India, people under 45 years of age are not required to undergo a mandatory health checkup when obtaining a health insurance policy. They are, however, required to disclose any pre-existing conditions such as diabetes or hypertension. It is, therefore, usually advised that one should get a health insurance when young so that the premium would be less.

Documents Required when buying a Health Insurance Policy

There are a few documents that you need to provide such as:

• Age proof: Any one of Birth Certificate, 10th or 12th mark sheet, Driving License, Passport, Voter ID, etc.
• Identity proof: Driving License, Passport, Voter ID, PAN Card, Aadhar Card, which proves one’s citizenship.
• Address proof: Electricity Bill, Telephone Bill, Ration Card, Driving License, Passport, should clearly mention the permanent address.
• Some plans require a medical check-up (usually for elder people above the age of 45 years)
• Passport Size Photo

Types of Health Insurance

There are various types of health insurance policies available, including:

• Individual Health Insurance
• Family Health Insurance Plan
• Senior Citizen Health insurance Plan
• Surgery and Critical Illness Insurance Plan
• Maternity Health Insurance Plan
• Personal Accident Plan
• Unit Linked Health Plan

Some of the Health Insurance Policies in India

• Max Bupa Health Insurance
• HDFC Ergo Health Insurance
• Bharti Axa Health Insurance
• SBI Health Insurance
• L&T Health Insurance
• Bajaj Allianz Health Insurance
• Apollo Munich Health Insurance
• National Health Insurance

Tax Benefits on Health Insurance

The amount you pay towards health insurance premium claimed as a tax-saving deduction under Section 80D. You can claim ₹25,000 annually for a health insurance policy for yourself. If you also pay the premium for a health insurance policy for your parents, you can claim up to ₹30,000 for the same as well.

Earning money is not at all useful if you don’t have a life. Think about yourself and your family and the importance of life. You know the importance and benefits of having a Health Insurance Policy. Start one, if you haven’t already.