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The COVID-19 pandemic that began in 2019 has taken thousands of lives, many of whom are the main working person of their families. This left many families suddenly financially vulnerable, as their savings quickly depleted and they struggled to meet their daily needs. This experience clearly highlighted the importance of health insurance. taking a good health policy not only covers medical bills but also preserves a family’s financial savings and provides peace of mind. Therefore, having health insurance has become essential in today’s era of expensive medical treatments. in this blog,  we will look at what health insurance is, its types, advantages and disadvantages, and the importance of health insurance in our lives. So let's continue..
 

What is Health Insurance?

Health insurance is a financial security policy that covers the insured's medical expenses, from hospitalisation to surgeries, medicines and diagnostic tests; under this policy, you pay a premium either monthly or annually and the insurance company bears the cost of the treatment as per the policy terms. In many cases, in the event of a claim, you pay the money directly to the hospital (cashless facility) or you get the money back later after paying the expenses (reimbursement). But every policy has terms and conditions like a limit of cover (sum insured), some sub-limits (sub-limits), waiting period, co-payment or deductible and pre-existing conditions, so it is essential to read and understand all these terms carefully before taking the policy.

Types of Health Insurance:

Family Floater Policy

A family floater has a single cover (e.g. ₹5,00,000) for the entire family. This is cost-effective as everyone is covered under one premium. But if someone in the family has a major claim, the cover for the remaining members may be reduced.
 

Individual Policy:

 There is a separate cover for each person. So the amount of cover for each person is safe and your cover does not decrease due to the claims of others. But if you take a separate policy for everyone, the total premium will be higher.

Critical Illness Policy

There is a separate cover for critical illnesses like cancer, heart disease, stroke, and once diagnosed, a fixed amount (lump-sum) is given. This money can be used for treatment, recovery or other financial needs.

Top-up / Super Top-up

This additional cover comes in handy when the base cover is exceeded. You can keep the base cover for small expenses and get help from the top-up on large bills, thus saving for expensive treatments.

Group health policy (through employment) 

A policy obtained through an employer is usually available at a low or no premium. It is a good option while employed, but the cover can be lost if you change jobs.

Combined/unit-linked types

Some policies have an investment component along with health cover. If your main goal is just health protection, a simple health plan is much clearer and more convenient; consider a combined policy.

 

Benefits of Health Insurance:

• Cashless Treatment
   

With health insurance, you do not have to pay your own money in the hospital when you fall ill, as the insurance company directly bills the hospital. This avoids a money rush in emergencies and helps you get treatment faster.

• No-claim bonus / Continuous renewal benefits
   

 If you do not use the insurance in a year, the cover of your policy automatically increases the next year. This bonus can reach a large amount if you do not use it for several years in a row, meaning you have excess protection.

• Pre-existing disease cover
   

Health insurance does not cover all diseases immediately, but after a certain waiting period (1 to 4 years), pre-existing diseases like diabetes, blood pressure, and heart disease are also covered. This ensures long-term security.

• Top-up / Super Top-up
   

 Even if the cover of your basic policy runs out, a top-up or super top-up policy covers the additional expenses. So, even expensive treatments like major surgeries or prolonged hospitalisation do not cause financial stress.

• Add-ons / Riders
   

You can take additional cover in addition to the basic policy, such as accident insurance, hospital care, dental treatment, IVF or a maternity rider. These riders are available at a small additional premium but are very useful for specific needs.

Limitations / Disadvantages of Health Insurance :

• Increased premium with age

 Health insurance premiums are initially affordable, but as you get older, the premiums continue to increase. The policy can become very expensive, especially in old age or if you have a pre-existing condition, so it is beneficial to take out insurance at a young age.

• Exclusions

 Health insurance does not cover all expenses. For example, cosmetic surgery, routine check-ups, some dental treatments, unnecessary medicines or increased treatment costs due to delay are generally not covered by the policy. Therefore, it is important to read the exclusions carefully before taking out a policy.

• Waiting period

Every health insurance has a waiting period before some diseases or conditions are covered. This is usually 1 to 4 years, meaning that the insurance company does not pay for the expenses incurred during that period. Therefore, the sooner you take out health insurance, the sooner the cover starts.

• Room-rent / sub-limit

Some policies have a limit on the type of room you can stay in at the hospital, such as only up to ₹3,000 per day. If you take a room for rent higher than that, the cost of other treatments is also covered proportionately less. This limit often makes the consumer pay a large amount of money out of their own pocket without realising it.

• Documentary processing and claims

 While claiming under health insurance, many documents, doctors' reports, medicine receipts and hospital discharge summaries have to be provided. If there is any error or delay in this, the claim process gets delayed, and sometimes it can even get rejected. Therefore, it is very important to maintain proper documentation.

 

 Conclusion:

Health insurance is not an investment tool but a protection shield. Taking the right policy can avoid the burden of high hospital expenses and save the family from going into financial crisis. While taking insurance, it is important to consider the cover (Sum Insured), network hospitals, waiting period, sub-limits and claim settlement ratio, rather than just looking at the low premium.

FAQ:
 

Ans: In cashless, money is paid directly to the hospital, while in reimbursement, you pay first and then get a refund from the company.

Ans:Floater is cost-effective for a small family, but individual is safer for a family with elderly or high medical need.

Ans:  There is usually a waiting period of 1–4 years, but it varies depending on the policy and the type of illness.