Financial planning has many aspects, one of which is healthcare plans. Taking preventative action for your loved ones is incomplete if you do not plan against health emergencies. Health insurance providers are aware of this rise in demand.
Therefore, you must know what health insurance is before buying one. The right policy will be the one that supports your healthcare needs. It should cover factors such as age and medical conditions.
What is a health insurance policy?
A health insurance policy is a financial agreement between an individual and an insurance provider that covers medical expenses incurred due to illness or injury. In exchange for a regular premium, the insurer agrees to pay for specified healthcare costs such as hospitalisation, surgeries, diagnostic tests, and sometimes outpatient care.
Policies may also include benefits like cashless treatment, maternity coverage, and critical illness insurance. Health insurance helps reduce the financial burden of rising medical expenses, ensuring timely access to quality healthcare. It is an essential part of financial planning, offering peace of mind and security during medical emergencies.
Why Do You Need Health Insurance?
Here are a few reasons why you need to buy a health insurance plan:
1. High Medical Expenses
Medical expenses skyrocket in the case of chronic illness or any surgery. You have to meet the medical expenses out of pocket if you do not have health insurance. This leads to a financial burden, leading to bankruptcy.
2. Timely Medical Attention
Health insurance covers various costs like expenses for outpatient and inpatient care, diagnosis, and therapies. It also covers other necessary expenses, such as preventive services, which include routine check-ups. When you have an insurance policy that covers it all, chances are that you will consult for medical assistance more often.
3. Preventative Measure
Buy Health insurance plans cover the cost of preventative measures such as vaccinations, immunisations, physical assessments, and healthcare check-ups. Precautionary measures are proactive actions that you take before the symptoms become complications.
4. Protection from Health-Related Risks
Health emergencies are unpredictable, but health insurance coverage is not. It serves to minimise the financial burden due to unexpected circumstances. Health insurance covers everything from having an accident to a sudden emergency due to a chronic illness.
5. Network Healthcare Facilities
Health insurance providers collaborate with a list of network medical facilities that operate with them. At these facilities, you bypass the hassle of long queues, lengthy paperwork, and upfront payment. The medical facility and insurance provider settle the expenses among themselves.
What are the Benefits of Health Insurance?
Having an insurance policy protects you in many ways. The advantages of it are hereunder:
1. Reducing Financial Burden
Meeting medical expenses creates a financial crunch because a significant chunk of money needs to be given at once. This contributes to financial stress, causing anxiety and worry. Having health insurance lets you plan for such situations proactively. When a sudden medical emergency emerges, the insurance provider settles it with the network medical facility.
2. Cashless Medical Access
You can benefit the most from an insurance plan because you do not have to worry about medical expenses. Network medical facilities settle treatment expenses with insurance providers.
3. Cost Saving
Know your specific requirements before evaluating the different insurance policies available in the market. Select a health insurance plan that also covers family health insurance.
4. Easy Access to Medical Facility
A sudden medical emergency causes a lot of mental distress. With a health insurance plan, you will have easy access to the network of hospitals.
5. Cumulative Bonus
Insurance companies offer a no-claim bonus if the policyholder does not make any claims during the policy tenure. Moreover, the no-claim bonus can reduce the premium amount during renewal.
6. Flexibility
You can exercise the liberty to choose a health insurance policy based on your requirements. There are multiple options to choose from, such as individual, floater or family health insurance plans.
7. Tax Benefits
When you opt for a health insurance plan, you can avail tax deductions on the premium paid during the financial year. In addition, you can get a maximum of Rs. 25,000 as tax deductions.
What are the Key Health Insurance Terminologies?
When assessing the product portfolio of an insurance provider, you will find certain terminologies. Let us decode a few industry jargon hereunder:
1. Policy Period
The period between the inception of the policy period and the date of policy expiry.
2. Sum Insured
It is the amount that the insurer pays to the policyholder when an unexpected event happens. It covers events such as illness, accidents, and diseases.
3. Premium
You must pay a certain amount at regular intervals to enjoy the health insurance benefits when in a medical emergency.
4. Co-payment:
It is a portion of the total expense that you have to pay out of pocket. The insurance provider bears the remaining balance. This means that the cost of treatment will be split between you and the insurer.
5. Network Hospital
These are medical facilities that operate collaboratively with the insurer to provide you with various services covered under the insurance plan.
Conclusion
A health insurance policy serves as a vital safety net against unexpected medical expenses. It not only provides financial protection but also ensures access to quality healthcare without the stress of high treatment costs. Choosing the right health insurance plan can offer peace of mind, timely care, and long-term security for you and your family.
