What is Health Insurance and Why You Must Have It?

bySurobhi BoseLast Updated: August 19, 2022
What is health insurance

A health insurance policy is a contract between the policyholder and insurance company in which the insurer provides financial protection to the insured in case of any medical emergencies. A health policy provides the benefit of reimbursement of medical expenses or cashless treatment as mentioned in the policy.

Having a health insurance policy provides the right financial backup to afford quality medical treatment at any point in life. Let’s read further to know about health insurance policies in detail and why you must have one.

Reasons Why Health Insurance is a Must Have

Here are some of the reasons why one must buy a health insurance policy:

  • Protect the savings– A health insurance plan helps to protect the financial savings of an individual by covering the medical expenses that may occur in case of any medical emergency
  • Beat medical inflation– With a health insurance plan, an individual can pay his/her medical bills including the pre and post-hospitalization cost without worrying about medical inflation
  • Afford quality medical treatment – An individual can avail of the best care and quality medical treatment at any of the network hospitals
  • Fight lifestyle diseases– Medical insurance takes care of the long-term treatment of lifestyle diseases like heart attack, cancer, etc.
  • Avail the facility of cashless hospitals- An individual can avail of the facility of cashless hospitalization at any network hospital of the health insurance company
  • Avail tax benefit– Along with medical coverage benefits, one can also save on taxes on the premium paid towards the policy under Section 80C of the Income Tax Act

Key Benefits of Having a Health Insurance Policy

There are a plethora of benefits offered by the health insurance policy. Let’s take a look at them:

Hospitalization Expenses– The health insurance policy covers the medical expenses that may occur in case of getting hospitalized for more than 24 hours. The expenses that are covered under the policy are medicine cost, room rent, doctor’s fees, diagnostic test fees, etc.

Pre and Post Hospitalization Charges– The health insurance policy provides coverage for pre and post-hospitalization costs that may occur on sickness before getting hospitalized or follow-up treatment expenses that may be incurred after getting discharged.

ICU Charges– It also covers the expenses of availing treatment in the Intensive Care Unit (ICU) during hospitalization.

Ambulance Cost– In case of any medical emergency, the ambulance service available to reach the nearest hospital is covered under a health insurance plan.

Day Care Treatments– Daycare treatment in which the hospitalization is done for less than 24 hours is also covered under the policy.

Cashless Treatment– The health insurance companies in India provide the facility of cashless treatment at their network hospitals. If an insured person is admitted to any of the network hospitals of their insurer, he/she doesn’t need to worry about paying the hospital bills as they will be settled by the insurer.

Pre-existing Diseases– Some of India’s best health insurance policies provide coverage for any pre-existing disease once the policyholder completes the waiting period. Generally, the pre-existing diseases are covered after the completion of the waiting period, which ranges from 2 years to 4 years.

Medical Check-ups– Most health insurance providers offer the facility of free preventive health check-ups at regular intervals as per the terms and conditions of the policy.

Does your Health Insurance Policy cover Coronavirus (COVID-19) Treatment?

Almost all health insurance policies cover the cost of COVID-19 treatment. Most of the health insurance companies have launched health insurance plans for coronavirus that cover the COVID-19 treatment expenses. As per the IRDAI guidelines, two standard health insurance products have been launched i.e. Corona Kavach Policy and Corona Rakshak Policy. Let’s take a look at these COVID insurance products in detail.

Corona Kavach Policy

This plan is specifically designed to provide coverage for the COVID-19 treatment. The Corona Kavach policy covers the health treatment cost and Ayurveda, Yoga & Naturopathy, Siddha and Homeopathy (AYUSH) treatment cost. Other costs that are compensated under the policy are gloves, mask, oxygen cylinder, ventilators and PPE kit.

Age of EntryMinimum- 18 years
Maximum- 65 years
Sum AssuredMinimum-50,000
Coverage TypeFamily Floater/Individual
Premium Discount5% for doctors and health workers

Corona Rakshak Policy

In case of diagnosis of COVID-19 during the policy tenure, the Corona Rakshak Policy provides coverage in the form of a lump-sum payment for a minimum of 72 hours of hospitalization. The tenure of the policy ranges from a minimum of 3.5 months to a maximum of 9.5 months.

Age of EntryMinimum- 18 years
Maximum- 65 years
Sum AssuredMinimum- 50,000
Coverage TypesIndividual
Premium Discount5% for doctors and health workers

Amid the threat of the third wave of COVID-19, it has become extremely important to know how well the health insurance policy covers the health and life of an individual. To cater to the requirements of the customers, Paytm offers a COVID-19 health cover of Rs. 1 lakh at a premium of just Rs.69 per month.

For individuals who are buying a health insurance policy for the first time, certain aspects that should be kept in mind are:

  • Prefer buying a health insurance plan that offers the coverage of COVID-19 treatment
  • The policy that offers COVID-19 cover includes the cost of nursing, doctor’s fees, hospitalization charges like room rent, ICU charges, ambulance charges, pre and post-hospitalization expenses, etc.
  • Know what is the claim settlement ratio (CSR) of the insurance company
  • It is important to know whether the lifelong renewability option is available in the plan or not
  • Know which type of claim you can make: reimbursement or cashless
  • Make sure to go through the exclusion and inclusion of the policy

Wrapping it Up!

In this day and age, every individual must have a health insurance policy to ensure the financial protection of the family and themselves. The earlier one buys a health insurance policy, the more benefits they can avail. Thus, make sure to buy a health insurance policy at a young age to avail the benefit of higher insurance coverage at a lower premium rate.

How to add family members to the existing health insurance policy?
At the time of policy renewal or at the time of policy purchase, the insurance buyers can add spouses, parents and dependent children to their health insurance plan.
What is cashless hospitalization in a health insurance plan?
The health insurance companies have a tie-up with network hospitals where the policyholder can avail of cashless treatment for any accidental treatment or illness. The cost of hospitalization and treatment is taken care of by the insurance company.
Does the health insurance policy cover COVID-19 treatment cost?
Yes, almost all health insurance companies cover the costs of the COVID-19 treatment.
Can I change the beneficiary in the middle of the policy tenure?
No, nominee/beneficiary cannot be changed in the middle of the policy tenure.

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