What is Health Insurance?
Health insurance is a type of insurance that covers medical expenses that arise due to an illness. These expenses could be related to hospitalisation costs, cost of medicines or doctor consultation fees.
Types of Health Insurance
There are two basic types of health insurance:
1. Mediclaim Plans
Mediclaim or hospitalisation plans are the most basic type of health insurance plans. They cover the cost of treatment when you are admitted to the hospital. The payout is made on actual expenses incurred in the hospital by submitting original bills. Most of these plans cover the entire family up to a certain limit.
2. Critical Illness Insurance Plans
Critical Illness Insurance Plans cover specific life-threatening diseases. These diseases could require prolonged treatment or even change in lifestyle. Unlike hospitalisation plans, the payout is made on Critical Illness cover chosen by the customer and not on actual expenses incurred in the hospital. The cover gives the flexibility to use the monies for changing lifestyle and medicines. Also it's a substitute for income for the time you could not resume work due to illness. Payout under these plans are made on the diagnosis of the disease for which the original medical bills are not required.
Why do you need Health Insurance now?
No one plans to fall ill or get hurt, but a serious illness can strike anyone at any time. The cost of treating the illness can cause severe financial strain on the savings you have accumulated over time. This means that you might have to compromise on providing your child the best quality education or defaulting on your home loan payments. Today, the cost of medical treatment is continuously rising.
For e.g., Herceptin, a cancer medicine costs approximately 1,10,000 for a vial of 440 mg. Depending on the weight, a patient usually requires 17-19 bottles for treatment over a year . That's 18 - 20 lakh just for the medicine~. Then add hospitalisation costs, doctor consultation fees, chemotherapy costs, etc. and your overall expenses could exceed 25 lakhs. These costs which are already very high are increasing every year. Most smart people have taken necessary precautions to insure their health as soon as possible. Health insurance is a living benefit, where you would need monies at the time of dire need. One disease can drain out all the savings you have made for your children's education, marriage, for buying a house or even retirement. You would not want your family's dreams to get shattered just because of an illness, especially when you could have protected yourself financially. It is beneficial to take a health insurance policy when you are young and healthy . As you get older, not only does your premium increase, but you also stand a chance of being denied a health cover by the insurance company.
How to choose a good health insurance plan?
Anybody who has a health insurance policy will tell you that buying one is one of the smartest financial decisions by any earning individual. Now, that you have decided to buy a health insurance policy, you need to know how to select a good health insurance plan that will take care of all your needs. Here is a list of benefits any good health insurance plan should offer you:
- Protection against a large number of critical illnesses
- Flexibility to choose your health cover
- No increase in premiums during the policy term even if your health condition changes
- Long policy term that covers you even in your old age
- Large hospital network for easy access to medical treatment