What is Health Insurance? Meaning, Types & Benefits

What is Health Insurance? Meaning, Types & Benefits

Health insurance pays for unexpected medical costs brought on by a disease. These expenditures may be associated with the price of hospitalization, the price of medications, or the cost of medical visits.

A corporation and a customer enter into a contract for health insurance. In exchange for a monthly premium payment, the corporation offers to cover all or part of the insured person’s medical expenses.

The insurance company will cover treatment costs if an insured person has an accident or is found to have a severe illness during this time.

TYPES OF HEALTH INSURANCE 

1. Individual Health Insurance

As the name implies, a single individual’s medical expenses are covered by an individual’s health insurance coverage. This coverage is available for you, your parents, your spouse, and your kids.

Every family member receives a separate sum insured under this plan. For instance, if the plan sum insured is Rs. 20 lakhs, each family member may spend up to Rs. 20 lakhs of that amount during the policy year.

Accordingly, if you purchase an individual plan for three people, the total sum insured would be Rs. 60 lakhs.

Because each family member has a different sum covered amount, if something were to happen to all or more than one member of your family simultaneously, this health insurance policy would be sufficient to cover everyone.

2. Critical Illness Insurance Plans

Numerous disorders that are influenced by our way of life are on the rise. Long-term treatment and management costs for cancer, stroke, kidney failure, and cardiac illnesses can be very high.

This is the main motivation behind the development of critical illness insurance coverage.

They can be acquired independently as their plan or as an add-on or rider to your current health insurance policy.

After a critical condition is diagnosed, these policies frequently pay claim payouts as a single lump sum payment. They provide coverage for extremely particular issues.

It is an income replacement when you cannot work again due to illness. 

3. Family Floater Health Insurance

In such plans, each person is covered by a single sum insured under a single policy.

The insurance company may pay this entire amount for the treatment of one individual, in which case any more claims for the same medical emergency will not be covered.

Due to their more complicated medical needs, seniors are not eligible for family floater insurance.

4. Senior Citizen Health Insurance

These health plans were created expressly with seniors’ medical needs and requirements in mind.

Most policies for senior citizens provide extra coverage, including some mental benefits and domiciliary hospitalization.

These policies could cost more than standard insurance policies and necessitate a comprehensive medical examination in advance because older people are more prone to have health problems.

5. Group Health Insurance

Group health insurance plans, as opposed to individual and family floater policies, can be obtained by a group manager for many people.

For instance, a company may buy group insurance for all its workers, or a building secretary could do the same for all of the building’s tenants.

Although these plans are reasonably priced, they frequently only cover fundamental medical conditions.

Employers frequently buy these policies as an extra perk for workers.

6. Health Insurance with Maternity Cover

The maternity insurance coverage pays for all prenatal and postnatal care costs incurred during pregnancy.

A new-medical born’s expenses for the first three months are also included.

WHY SHOULD YOU HAVE A HEALTH INSURANCE?

 1. To safeguard your family

While looking for the right health insurance plan, you can cover everyone under one policy rather than getting separate policies for each family member.

Take into account your elderly parents and dependent children, who are likely more prone to disease.

If the worst occurs, you won’t have to worry about ensuring they receive the best medical care if you have the appropriate health insurance.

Make sure to conduct your research, get professional guidance, and select a plan that provides comprehensive coverage.

2. To deal with medical inflation

Health insurance is required due to the rapid increase in medical costs.

Medical trend rate, also known as the rise in cost per person brought on by medical inflation. This rate is anticipated to increase by twice the inflation rate in India.

A 10% medical trend rate in India is anticipated, compared to a 5% inflation rate.

Most insurers state that the two most common claims are still cancer and heart illnesses, followed by gastrointestinal disorders and respiratory problems.

You can tackle crucial illnesses like cancer and heart issues with a fixed benefit health insurance policy.

3. Income tax benefit

Under Section 80D of the Income Tax Act 1961, payments made toward medical insurance premiums are eligible for tax deductions.

In a financial year, an individual may deduct up to Rs. 50,000 in taxes for themselves, their spouses, their children, and their parents.

If the parents are elderly, the amount increases to Rs. 75,000.

4. Safeguards savings

While dealing with an unexpected illness can be emotionally draining and stressful, managing a medical ailment also has a financial cost.

By getting a solid health insurance policy, you better control your medical costs without spending all of your money. You won’t need to worry about payments because certain insurance providers offer cashless care.

You can use your savings for the things they were intended for, like retirement, home ownership, and starting a family.

The tax benefits of health insurance further increase your savings.

5. You don’t have to settle for lower-quality treatment

With the proper health insurance, you can receive care anywhere in India and the rest of the world. You do not need to compromise on therapy if you have enough health coverage. You can receive treatment wherever you like using the money from your health insurance claim.

CONCLUSION

Health Insurance is a necessity in today’s VUCA world (Volatility, Uncertainty, Complexity & Ambiguity). The features are complex to understand and there are 1000s of products to choose from.

You need a trusted ally and an expert to guide you through the process. Speak to the expert advisors from Ditto and sail through the process of buying the best health & Term  insurance plan for yourself.

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