Health insurance or medical insurance (also known as medical aid in South Africa) is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. As with other types of insurance is risk among many individuals.
By estimating the overall risk of health risk and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the health care benefits specified in the insurance agreement.[1] The benefit is administered by a central organization, such as a government agency, private business, or not-for-profit entity.
According to the Health Insurance Association of America, health insurance is defined as “coverage that provides for the payments of benefits as a result of sickness or injury. It includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment”.
There is so much unpredictability encompassing one’s health and it is almost impossible to have any control over health-related expenses. However, after getting insured with a suitable health insurance plan, you can exercise some degree of control and gain some security vis-a-vis your and your family’s health care expenses. The question ‘why you need health insurance’ can be answered in countless ways, and here are a few of them:
Changing Lifestyle
With the ever-increasing pressures of modern-day lifestyle, the range of health-related risks we are exposed to has significantly widened in scope. From lifestyle disorders such as obesity and eating disorders to pollution-induced conditions such as asthma, there is no dearth of ailments that can lead to high medical expenses.
In addition to physical illnesses in our life, the constant stress of today’s competitive world has led to a substantial rise in mental health issues, which is why it is critical to buy an adequate health insurance plan for yourself and your family.
Rising Medical Costs
In recent years, the medical inflation in India has not only kept pace with its retail counterpart but exceeded it by leaps and bounds. The cost of medicines, medical examinations, hospitalisation, and surgeries are consistently on the rise. It makes more sense to pay the basic health insurance premium and get insured than shelling out those exorbitant health expenses from your own pocket. Therefore, it is critical to get yourself insured with a health insurance plan to help you stay financially secure during and in the wake of a medical emergency.
COVID-19 Cover
The state of the world over the better part of the past two years is nothing short of unprecedented. With the multifaceted impact of the ongoing global COVID-19 pandemic, it is more crucial than perhaps ever before to buy a suitable health insurance plan. The Tata AIG health insurance benefits include a cover for Coronavirus.
Tax Benefits
Not only does health insurance safeguard you from the financial ramifications of a medical crisis but it also provides you significant health insurance tax benefits. Whilst the premiums paid for health insurance plans for senior citizens are eligible for tax deduction to the extent of ₹50,000, those for individuals below the age of 60 years have a tax deduction ceiling of ₹25,000 under Section 80D of the Income Tax Act, 1961. Please note tax benefits are subject to change in Income Tax laws.
Comparisons Of Health Insurance
In India, provision of health care services varies state-wise. Public health services are prominent in most of the states, but due to inadequate resources and management, major population opts for private health services.
To improve the awareness and better health care facilities, Insurance Regulatory and Development Authority of India and The General Corporation of India runs health care campaigns for the whole population. IN 2018, for under privileged citizens, Prime Minister Narendra Modi announced the launch of a new public health insurance fund called Ayushman Bharat Yojana and the government claims that the new system will try to reach more than 500 million people.
In India, Health insurance is offered mainly in two Types:
Indemnity Plan basically covers the hospitalisation expenses and has subtypes like Individual Insurance, Family Floater Insurance, Senior Citizen Insurance, Maternity Insurance, Group Medical Insurance.
Fixed Benefit Plan pays a fixed amount for pre-decided diseases like critical illness, cancer, heart disease, etc. It has also its sub types like Preventive Insurance, Critical illness, Personal Accident.
Depending on the type of insurance and the company providing health insurance, coverage includes pre-and post hospitalisation charges, ambulance charges, day care charges, Health Checkups, etc.
It is pivotal to know about the exclusions which are not covered under insurance schemes:
Treatment related to dental disease or surgeries All kind of STD’s and AIDS Non-Allopathic Treatment Few of the companies do provide insurance against such diseases or conditions, but that depends on the type and the insured amount.
Some important aspects to be considered before choosing the health insurance in India are Claim Settlement ratio, Insurance limits and Caps, Coverage and network hospitals.
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