Health insurance is a contract that requires an insurer to pay some or all of a person’s healthcare costs in exchange for a premium. More specifically, health insurance typically pays for medical, surgical, prescription drug, and sometimes dental expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly.
It is often included in employer benefit packages as a means of enticing quality employees, with premiums partially covered by the employer but often also deducted from employee paychecks. The cost of health insurance premiums is deductible to the payer, and the benefits received are tax-free, with certain exceptions for S corporation employees.
Types of Health Insurance Plans in India
- Standard Health Insurance: Standard health insurance is usually provided for an individual. These health insurance policies cover the cost of the health-related bills of an insured. Such standard covers can also be extended or obtained to cover the expenses of medical bills of the parents or spouse and children of the insured.
- Family Health Insurance: This is different from that of a standard plan. In such policies, only one policy against the sum insured can cover the medical expenses and health cover of the entire family. Such plans can also be used for the treatment of a single person. In short, covering the benefits of a standard insurance policy as well. However, the premium of such policies is likely to be higher than the standard ones.
- Health Insurance for Senior Citizens: Generally, family health insurance does not cover the cost of medical expenses for senior citizens due to their complicated nature. In such a scenario a tailor-made policy to abide by all the medical expenses of individuals, above the age of 60 can save the day for them. These plans provide comprehensive coverage against the premium paid for all types of illnesses related to old age.
- Joint or Group Health Insurance: These are mostly availed by the corporates to extend it to the employees. The premium of these group insurances is paid by the employer. These health insurance policies are considered for their cost-effectiveness and are undertaken as a measure of employee retention
How to choose a health insurance plan?
Some important factors that you should consider while choosing a health insurance plan are as follows
- Check the insured sum: Most insurance providers have a limit on the insured sum you can choose. You need to look for health policies that cover what you have been looking for. The general thumb rule is to cover six times your salary. If you wish to start a family soon, it is important to ensure that maternity benefits are covered as well.
- Inspect the network hospitals: different insurance companies include different hospitals in their network. Make sure your preferred hospital is available in the network.
- Read the fine print: Understanding the fine print of the documents is crucial while choosing the health insurance plan. Understand the coverage provided and limit the expenses.
- Additional benefits: Check for no-claim bonuses, restoration of the sum insured and other additional benefits while choosing the plan
- Thorough examination: It is important to understand different exclusion scenarios, co-pay clauses and waiting period situations before making the final decision.
People under the age of 45 years are not required to undergo mandatory health checkups, however, they do need to disclose whether they are diagnosed with hypertension or diabetes. It is therefore advised to purchase health insurance while young to pay less premium.
Mediclaim Plan VS Critical Illness Insurance Plan
Also known as indemnity plans, mediclaim plans provide payouts against actual medical bills and costs whereas critical illness insurance plans provide a hefty amount once when you are diagnosed with a covered critical illness.
Issues from accidents to surgeries, and mediclaim plans cover a range of issues but critical insurance plans only provide money for specific critical illnesses.
You can need both for future scenarios, however, it is always advised to choose a regular mediclaim policy with an additional critical insurance plan.