Why is it Important to Have a Health Insurance Policy?

bySurobhi BoseLast Updated: August 19, 2022
Why it is important to have a health insurance policy
Why it is important to have a health insurance policy

With the burgeoning cost of healthcare in India, it has become imperative to have the right financial protection with a health insurance policy. In most countries, health insurance policies are well established. However, in India, it remains an untapped market, with only 1.1 billion that is less than 15% of the Indian population having a health insurance plan. Health insurance provides a one-stop solution for all the expenses related to doctor fees, medical tests, hospitalization charges, cost of the ambulance, etc. Let’s read further to know in detail why health insurance is a must-have.

Need for Health Insurance Policy

Here are some of the key reasons why one needs a health insurance policy:

Rising Cost of Healthcare

Due to medical inflation, there has been a huge rise in the cost of medical treatment and this rate is expected to mushroom at double the rate of inflation in the future. So, in case of any medical emergency people often end up burning their savings, which in result affects their long-term financial objectives. However, with a health insurance policy, one can ensure the financial security of themselves and their family, as it takes care of all the costs related to medical treatment like doctors’ fees, pre and post-hospitalization costs, etc.

Changing Lifestyle

Changing lifestyles has made us more prone to health disorders. As per the World Health Organization, India has the highest number of diabetics at 50.8 million, whereas 25 million suffer from cardiovascular diseases, which results in 60% of the global figure. Although only 11% of the Indian population has health insurance. Health insurance plays a very significant part in this scenario. With a constant increase in lifestyle diseases, having health insurance provides the right financial backup in case of medical contingencies.

Coverage Against Various Hospitalization Costs

Along with the mainstream medical cost, the cost of diagnostic tests and out-patient department (OPD) expenses has increased in recent times. Nowadays, doctor fees, medical check-ups and medicines can result in higher charges as compared to hospitalization expenses. It is important to consider that a health insurance policy not only covers the hospitalization cost but also takes care of the OPD expenses and diagnostic tests. Moreover, it also provides coverage for different types of surgeries and ailments.

Additional Benefits

Apart from various hospitalization costs, an individual can also avail the benefit of coverage against day-care surgeries, ambulance coverage, vaccination expenses, health check-ups, etc. under a health insurance policy. These days, most health insurance plans also cover AYUSH treatment.

Benefits of Health Insurance

The following are some of the benefits offered by the health insurance policy:

Comprehensive Coverage

The health insurance policy offers comprehensive coverage to the policyholders. Most of the health insurance plans cover the following medical expenses:

  • In-Patient Hospitalization expense- The expenses incurred during a minimum of 24 hours of hospitalization are known as in-patient expenses. Most health insurance policies cover these expenses which include boarding expenses, room rent, nursing, ICU/ICCU, cost of medicine, etc.
  • Pre and Post Hospitalization Expenses- The expenses incurred a certain number of days before and after hospitalization is known as pre and post-hospitalization expenses. These expenses generally include medical reports, x-rays, doctor’s visits, etc.
  • Daycare Expense- These expenses do not require hospitalization for a minimum of 24 hours. Daycare expenses include cataracts, radiotherapy, chemotherapy, dialysis, etc. The health insurance plan provides coverage for a specific number of daycare facilities as mentioned in the policy document
  • Ambulance Expense- The ambulance expense up to a specific limit, which includes transportation of the patient to the nearest hospital is generally covered under a health insurance policy
  • Domiciliary Hospitalization Expenses- Most of the health insurance policy covers domiciliary hospitalization expenses that result due to treatment availed at home, which otherwise would have required hospitalization

Cashless Treatment

Most health insurance companies offer the facility of cashless treatment to the insured at various network hospitals. These hospitals reimburse the cost related to the treatment availed by the insured. However, it is important to keep in mind that the claim will be approved by the insurer only in case it is made according to the terms and conditions mentioned under the policy.

Tax Benefit

Along with the benefit of medical coverage, a person can also save on taxes. The premium paid by the policyholder up to a maximum limit of Rs. 25,000 is applicable for tax deduction Under Section 80D of the Income Tax Act 1961. Moreover, if the policyholder or his parents are above the age of 60 years then he/she can claim a deduction up to a maximum limit of Rs. 50,000.

Financial protection Against Critical Illness

Most health insurers provide coverage against critical illnesses such as cancer, stroke, heart attack, kidney failure, etc. The critical illness covers either comes inbuilt in a plan or is offered as an add-on cover to the health insurance policy. In case the insured person is diagnosed with any critical illness as stated in the policy documents, a lump-sum amount is paid by the insurer so that the insured can fulfill their financial obligations.

Provides Coverage Against COVID-19 Treatment

Almost all health insurance companies offer coverage against COVID-19 treatment. Moreover, as per the IRDAI rule two standard health insurance products have been launched to cover the treatments related to COVID-19. Moreover, Paytm offers a COVID-19 health cover of Rs.1 lakh at a premium of just Rs.69 per month.

The Bottom Point!

The benefits of having a health insurance policy are vast. It is the best way to ensure that an individual and his family are safe from any type of financial instability in case of an eventuality. Make sure to analyze the requirement and choose the best health insurance plan as per the suitability.

What is the waiting period of a health insurance policy?
The health insurance plan does not take effect immediately after the purchase. One needs to complete the waiting period before the coverage kicks in. The waiting period of a health insurance policy ranges from 1-4 years.
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.
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.

You May Also Like