What is Health Insurance?

How Does a Health Insurance Policy Work?

• If you haven’t renewed your policy
• If your ailment falls under the list of policy exclusions
• If you have provided incorrect medical information to your insurer

Why Do You Need a Health Insurance Policy?

• 1. Get a wide range of medical expenses covered: From COVID-19 to heart ailments, an insurance policy would cover you against a host of diseases or accidents, including pre-and post-hospitalisation costs.
• 2. Treat critical illnesses stress-free: Contrary to popular beliefs, people under the age of 40 could get diagnosed with critical illnesses like heart disease, kidney failure, etc. The rising cases of critical illnesses among the younger lot is a strong testimony to that. A comprehensive policy could come in handy in treating critical illnesses without any financial stress.
• 3. Cashless claim benefits: Paying your medical bills during unforeseen medical emergencies could lead to additional stress. Insurance providers have a list of network hospitals, where if you seek treatment, you could claim cashless benefits. Meaning you don’t have to pay anything out of your pocket. The insurer would settle the payment on your behalf.
• 4. Tax benefits: Additionally, you can claim tax benefits against your insurance premium under Section 80D of the income tax. So, a general insurance policy could also help you save on your taxes.
• 5. Peace of mind: Last but not the least, having a comprehensive health policy would help you live a stress-free life. Medical insurance policies are designed to provide a financial cushion during emergencies.

How to Choose the Right Health Insurance Policy?

• 1. Policy exclusions: Go through your insurance policy documents to check policy exclusions to avoid unpleasant surprises during claims. Any claims made or filed for ailments that are not covered by your policy would be declined.
• 2. Policy inclusions and cover: Similarly, go through your policy fine print and check what is covered. Make sure that your policy covers a wide range of diseases and ailments. Also, if you're living in a metro city, you would need at least ₹7 lakh cover. So, understand the sum insured amount of your policy before purchasing.
• 3. Go for a comprehensive plan: Instead of buying multiple policies separately, go for a comprehensive plan. This would also help you keep your premiums in check.
• 4. List of network hospitals: Consider insurance providers who have a long list of network hospitals that house some of the best healthcare facilities in India. This would help you get cashless and top-class treatment at premium hospitals.
• 5. Affordability: Calculate your policy premium before purchasing an insurance plan. There should be a balance between the benefits offered by the policy and the premium you are supposed to pay.

How to Save Tax with a Health Insurance Policy?

• An individual can claim a deduction of up to ₹25,000 for the insurance of self, spouse, and dependent children
• You could claim an additional deduction of up to ₹25,000 for your parents’ insurance if they are less than 60 years of age
• You can claim an additional deduction of up to ₹50,000 if your parents are aged above 60
• If medical expenses incurred for senior citizens (self, spouse, dependent children, parents) are not covered under any medical insurance, you can claim a deduction for the said expenses incurred under the above the limit of ₹50,000
• If you and your parents are aged more than 60 years, the maximum deduction that can be availed under this section is ₹1 lakh

Why Should You Buy a Health Insurance Policy at an Early Age?

How to Calculate Your Insurance Premium?

• 1. Go to the insurance provider’s app or website
• 2. Select the number of people you want to insure
• 3. Enter details like age and gender, PIN/location
• 4. Share other information like your lifestyle habits
• 5. Get the quote based on the details shared

What are the Factors that Could Affect Your Health Insurance Premium

• 1. Your age: While medical conditions could affect the young and the old, the former is less prone to critical illnesses and diseases. As you grow older, you tend to develop more health conditions. Your insurance premium is somewhat directly proportional to your health condition. So, the younger you are, the lesser your insurance premiums.
• 2. Pre-existing diseases: If you have pre-existing medical conditions or a family history of a particular illness, your insurance premium could be higher due to the risk involved.
• 3. Location: Your location is also taken into consideration while determining your policy premium. Your city’s overall health-related statistics and medical costs are considered while deciding on the premium.
• 4. Lifestyle: Your lifestyle habits could have a direct impact on your health insurance premium. For instance, if you smoke, you could be considered a high-risk individual, which could lead to higher premiums.
• 5. Add-on benefits: Calculate your policy premium before purchasing an insurance plan. There should be a balance between the benefits offered by the policy and the premium you are supposed to pay.

Health Insurance Jargon Simplified

• 1. Waiting period: The waiting period is the timeline mentioned in your policy document during which you won’t be able to claim any policy benefits. Every policy comes with an initial waiting period of up to one month or 30 days. For pre-existing diseases, the waiting period could be between 2 - 3 years.
• 2. Copay: As per your insurance copay clause, a certain percentage of the amount incurred due to medical treatment would have to be borne by you while the remaining is paid by the insurer. For example, if your insurance comes with a Copay clause of Rs.5,000 and your total treatment cost is Rs.20,000, you have to pay Rs.5,000 out of your pocket. The remaining Rs.15,000 would be paid by the insurer.
• 3. Deductible: Some insurance providers require you to pay a certain sum for your hospitalisation/treatment bills before you claim policy benefits. The insurance company would reimburse or pay the amount on your behalf to the hospital once the deductible is paid by you. To be precise, the insurance company would only accept or cover your claim if it is above the deductible amount.
• 4. Pre-existing disease: Any disease or symptoms that you already have or have been treated for before getting your health insurance policy would be considered a pre-existing disease.
• 5. No-claim bonus: No-claim bonus (NCB) is a sort of monetary reward provided by your insurer for every claim-free year. No claim bonus in health insurance works in two ways - cumulative bonus and discount in premium. A cumulative bonus is when for every claim-free year, your insurance provider increases your coverage amount without increasing the premium. The increment in coverage is based on the percentage of NCB mentioned in your policy document. Similarly, some insurers provide discounts on premiums for every claim-free year.
• 6. Insurance portability: Let’s say, you are not satisfied with your insurance provider and want to switch to another insurer. You could do so by porting your insurance to another insurer under better terms and conditions.
• 7. Sum insured: It’s the amount up to which your insurance provider could cover in a policy year.
• 8. Pre-hospitalisation expenses: Any medical expenses incurred before getting admitted to the hospital are known as pre-hospitalisation expenses.
• 9. Post-hospitalisation expenses: Any medical expenses incurred that are above and beyond the hospital expenses are known as post-hospitalisation expenses. There are insurers that cover both pre-and post-hospitalisation expenses.

Common Health Insurance Myths Busted

• 1. An employer-provided health plan is sufficient: While your company-provided group health insurance could come to your benefit, it’s always recommended to have a separate health insurance policy. For instance, once you quit your job, your employer insurance plan becomes null and void. Also, the sum insured might not be sufficient to cover yourself and your family.
• 2. Insurance is for the old : Another common misconception is that young people don’t need insurance. However, that’s not true. According to a Government report, Coronary Artery Disease (CAD) occurs at a younger age in Indians with over 50% of Cardiovascular Disease (CVD) mortality occurring in individuals aged less than 50 years. Also, who could forget the unforgiving COVID waves when thousands of Indians lost their lives to the harrowing pandemic? Other than that, growing cases of cancer among young Indians have become a cause of concern in the healthcare sector.
• 3. Health insurance claim settlements are stressful: Actually, it used to be somewhat like that. But with modern insurance players like Navi Health Insurance coming into the picture, settling your claims has become extremely quick and easy.

Conclusion