HEALTH INSURANCE

What are the Types of Health Insurance?

Individual

An individual indemnity-based health insurance policy is one that reimburses the insured for the cost of medical expenses up to the sum insured in the policy. The insured is required to submit hospital bills with the details of expenses incurred during the stay.

Family Floater

A family floater health insurance plan is similar to individual health insurance plans, except it extends to and provides protection for the entire family. In case of multiple illnesses, the sum assured is divided between the family members to entertain multiple claims simultaneously

Senior Citizen

For people above the age of 65, the senior citizen health insurance plan provides financial aid to cover medical treatments. They usually offer critical illness cover, cashless hospitalisation, pre-existing conditions cover and a higher sum assured, ensuring that they have the right coverage at the right time.

What are the Benefits of Health Insurance in India?

1. Health insurance companies in India offer comprehensive coverage for medical costs, such as hospitalisation expenses, outpatient procedures, ambulance charges, domiciliary expenses, etc. These costs are rapidly rising, and therefore health insurance is essential to get the best medical care.

2. Protection against critical illnesses

Health insurance policies can come with a critical illness rider that offers coverage in the case of life-threatening or altering illnesses, such as renal failure, cardiovascular diseases, cancer, paralytic strokes and accidental dismemberment. If the insured is diagnosed with any of the ailments listed in the policy, they are eligible to receive a lump sum amount that can be utilised for treatment costs, daily expenditure, and other needs.

3. Cashless treatment

Health insurance policies offer cashless claim facilities at leading hospitals in India. This implies that the insurance company directly settles the hospital bill and the insured doesn’t need to chase the company to reimburse. To opt for this facility, the insured needs to be admitted to any of the network hospitals mentioned in the policy.

4. Tax benefits

The premium paid is eligible for tax deductions under Section 80(D) of the Income Tax Act 1961.
Health insurance purchased for the spouse, children and the insured, can avail up to Rs. 25,000 tax deduction.
Health insurance that also includes parents below the age of 60, can avail up to an additional Rs. 25,000 tax deduction, making the total tax savings Rs. 50,000.
Health insurance that includes parents above the age of 60, can avail total tax savings of Rs. 75,000.
A further deduction of Rs. 5000 goes towards the payment of preventive health check ups for the insured, the parents, spouse and children.

Why Buy Health Insurance at an Early Age?

When we are young, we seldom think about investing in a good health insurance plan while planning our financials. We often forget that because of our sedentary and stressful lifestyle our health is deteriorating at a much faster pace than ever before. Therefore, it is extremely important that for us to buy health insurance at a younger age when we are in the best of our health. There are many advantages of buying the health insurance at an early age:

Much lower premium: The health insurance premium is directly proportionate to the health status and age of the insured. The healthier a person is lower the premium is. So, people in their twenties and thirties will pay much lower premium for much comprehensive health coverage due to their age and health status than the people in later stages of life. As you grow older your health condition deteriorates and the premium goes up.
Minimal underwriting: Since, the younger population are supposed to be healthier and the chances of getting any immediate health issues are much less, the medical underwriting criteria are relaxed. Most of the times, it will be Straight Through Pass (STP) without any medical underwriting.
Larger coverage when you need it: Most health insurance plans offer ‘No Claim Bonus’ where the sum insured increases every claim free year. This feature of the policy is especially beneficial to younger people who do not have claims at their young age. Because they don’t claim, their sum insured increases every year allowing for a much higher sum insured at a later stage of life when they could need it without any extra premium
Waiting periods: Many health insurance plans have waiting periods before they can be covered under the policy. Since younger people are usually in a better state of health, the waiting periods are easily passed without claim during the initial years and have everything covered after the stipulated waiting period (usually 36/ 48 months) is over.
Income Tax benefit: The premium paid for health insurance is deducted under section 80D from the income. Hence, it reduces the income tax liability for the insured.