Everything You Need to Know About Health Insurance:

Health Insurance and its Importance

What is Health Insurance?

In today’s time, with the ever-changing world be its advancements in technology, way of lifestyle, and others. Insurance is now more of a necessity than a luxury.

Especially insurance that covers medical expenses incurred by a policyholder during the policy’s coverage period which is known as medical insurance or health insurance.Β 

If the insured is sick or injured and needs medical care, they may have to pay for it out of pocket. In order to receive the advantages of insurance coverage, the policyholder must pay a set amount of money (the premium) on a regular basis. And, their health is taken care of by the insurance provider.

The health insurance premium is set by the insurance company and must be paid regularly by policyholders on a monthly, quarterly, semiannual, or annual basis.

Why is Health Insurance a Must?

With ever-increasing healthcare costs, it might be difficult to get the necessary and high-quality medical care you need. You and your loved ones need to quickly enroll in a solid health insurance plan to safeguard against such costs.Β 

Here are some of the most compelling arguments in favor of getting health insurance right now:

Emergency Hospitalization

Health is the most precious asset one can have. Unfortunately, as with any other asset, health can also lose its effectiveness over time, meaning, how and when one falls sick is highly coincidental. Anything can happen at any time! Eg: Covid Pandemic.

Most major insurers offer you critical illness cover as an add-on to your existing policy or as a separate policy altogether. Such a policy would protect the policyholder in the event of catastrophic illness or injury, including kidney failure, bone marrow transplant, stroke, and amputation. 

If you are diagnosed with one of the serious illnesses on your policy’s predetermined list, you will get a lump sum payment. You are free to use this money any way you see fit, including medical care, living expenses, and debt repayment.

Economic

One of the primary goals of health insurance is to ensure that those who need medical attention are able to do so without going into serious debt to do so. Plans for health insurance provide financial security against catastrophic medical bills.Β 

It pays for a wide variety of medical services, including hospitalization, daycare, home health care, and even ambulance transportation. As a result, you may stop stressing about the steep bills and instead concentrate on getting well quickly.

All Digital 

Nowadays, you may file an insurance claim without having to worry about putting up any cash. In this setup, there are no out-of-pocket costs involved. Your health insurance provider and the medical facility will negotiate the cost of your hospital stay, and all such transactions are digitally done.

Get admitted to a hospital that is part of the insurer’s network to receive this benefit. The cashless service is available once a pre-authorization form is filled out and your health insurance card is shown.

Importance of Health Insurance

Importance of Owning a Health Insurance Plan:

As said earlier, Health Insurance is no more a luxury now. It is infact a basic necessity each and every individual must have in their name. Some of the major benefits of Health Insurance are as follows;

Hospitalization

One of the most helpful aspects of health insurance coverage is the hospitalization benefit, which pays for things like:

  1. First Aid Coverage
  2. Pre & Post Hospitalisation
  3. Domiciliary Treatment
  4. Emergency care etc.

Recovery & Rehabilitation

The convalescence benefit, also known as the recuperating/recovery benefit, covers the covered person’s “recovery expenditures.” The plan provides indemnification for any out-of-pocket expenses that may occur as a result of the insured person’s hospitalization, including the cost of replacing the insured’s lost income.

Tax Benefits

By investing in your health with this insurance, you may reduce your taxable income without sacrificing your standard of living. True enough. In order to receive a tax deduction for insurance premiums, you must meet the requirements of Section 80D of the Income Tax Act, 1961. 

It’s possible to deduct up to Rs.25,000 if you or your parents are younger than 60. However, a maximum of 50,000 can be claimed if either you or your parents are 60 or older.

Digital claim settlement

You won’t have to worry about covering the cost of your hospital stay thanks to this feature, as the insurer will handle all payments directly to the medical institution. In order to use the cashless service, however, you must visit a hospital that is part of the insurer’s network.

Check-up

Most insurance policies cover annual or semiannual dental checkups. The price of dental care may add up quickly, so having this protection may be worthwhile.

Several health insurance companies reward their customers with free annual checkups after a set number of years without filing a claim. In reality, if you seek medical care at a network hospital, you may now take advantage of cashless checkups.

Organ Transplant

Insurance policies in India will pay for organ transplant surgery. Many insurance companies pay for the whole amount, but others cap out at a certain percentage of the total. Please review the plan’s sub-limits and other terms carefully.

Petty Expenses

The daily hospital cash benefit is intended to help with out-of-pocket costs incurred during hospital stays. This sum can be used for whatever purpose you see fit and is not subject to any limitations. But this benefit isn’t standard in health care, and you may only be able to get it if you buy extra insurance.

Other Expenses

Health Insurance also covers certain specific expenses. If you pay a small extra premium, you may add a variety of supplementary covers to your policy that will further expand its protective coverage. Coverage for things like air ambulance transport, immunization costs, pregnancy, infant care, etc.

Who can buy health insurance?

General health insurance policies are available to anyone between the ages of 18 and 65. Sometimes, depending on the insurer, it might go much higher, into the 70s and beyond. However, a kid is covered from the time they are 16 days old until they turn 18 years old.

In the context of health insurance, “pre-existing sickness” refers to a disease that the insured already had at the time of policy purchase. A pre-existing condition, as per the IRDAI, is one for which the insured person has been given a diagnosis in the 48 months before buying the insurance.

So, in the case of pre-existing conditions, individuals aged over 45 will be required to take a special medical test that determines their health risk and, based on that, the insurance coverage price will be determined.

Is it worth having health insurance?

A definite yes!

Having health insurance can shield you and your loved ones from financially devastating medical bills. As your company contributes to your health coverage and medical costs, getting health insurance through your workplace is typically more cost-effective than buying health insurance on your own.

In case, your employer isn’t offering health insurance or health benefit plans, signing up for one on your own is suggested.

As a general guideline, your coverage should equal around half of your yearly salary. If your annual income is Rs. 10,00,000, a health insurance policy with a coverage amount of at least Rs. 5,00,000 might be a good fit for you. Because with income comes a varied lifestyle and also the ability to cover one’s life.

Also, insurance is a personal product. The requirements for this vary from person to person based on their lifestyle, health conditions, family history of preexisting health conditions, and other factors.

Health Insurance Tax Benefits:

The government offers tax breaks for those who sign up for health insurance.

According to Section 80D of the Income Tax Act of 1961, you can claim a tax deduction for the premiums you pay on your health insurance policy. Below is a breakdown of how much will be subtracted:

In the case of an individual, you can claim up to Rs. 25,000 for yourself and your immediate family. Individuals or their spouses aged 60 or older are eligible for an Rs. 50,000 tax break. Parents (either or both) who are insured can receive an extra deduction of up to Rs 25,000 if they are younger than 60 years old, and up to Rs 50,000 if they are 60 or over.

Uninsured seniors (those 80 years old or older) with medical bills of up to Rs 50,000 will get their deduction claim in full. 

Also, under this clause, a person can deduct Rs. 5,000 for the cost of a preventative medical examination for himself or his dependents (spouse, parents, and children under the age of 18). This deduction is in addition to the plan described above, and it has the same limit of Rs. 25000/500000 as described above.Β 

Conclusion:

Having health insurance helps to safeguard you from the financial burden of unforeseen medical expenses. Before you even reach your deductible, you may save money on approved medical services by staying within your insurance provider’s network. Even before you reach your deductible, you can receive free preventative care, including immunizations, screenings, and certain checkups.

The purpose of this is to make accidental losses more bearable by lowering the degree of financial uncertainty. Insurance does this by exchanging the risk of a big loss and the promise to pay if it happens for a small, predictable fee, called an insurance premium, that is paid to a professional insurer.Β 

Disclaimer:Β All the information on this website is published in good faith and for general information purposes only.

Also read:

Earnings Per Share – Importance, Types & Features:
Maximize Your Mutual Fund Investing Returns:
Dividend Reinvestment Plan: Everything You Need to Know
Inflation and its impact on the Economy & Stock Market:
Magic Formula Investing

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