Health Insurance is a contract between the insurance company and the insured customer in which the insurance company provides health insurance claims in the form of reimbursement or cashless of the hospital bills of the insured and in return the customer would be paying a considerable amount known as “Health insurance premium”. The health insurance premium paid by the customer is also eligible for income tax exemption as per the Indian income tax laws. Health insurance policies can be purchased online from the portal.
Health insurance is one of the most important in our life, everyone should know about how it works and what it is, Is it good or bad making a purchase. Health insurance policies are no longer just a convenience they will cover you from financial losses. Check the pros and cons of health insurance in India below.
While you might be working hard to achieve the financial goals that you've set for yourself and your family, an unexpected health problem could impact your journey downwards. If you are the sole worker in the family, the financial stress could be immense even if someone in your family suffers from a medical emergency.
The rising cost of private medical care in the country is so high, that hospitalization can give you a heart attack too it will impact your financial health too. Purchasing a health insurance policy is a smart way to keep your finances protected. When you buy health insurance policy, you get into an agreement with the insurance provider wherein the insurer agrees to compensate the medical expenses.
Why Health Insurance is Important?
Health Insurance is important because
- Lifestyle-related ailments are common these days
- Healthcare is becoming increasingly expensive
- It is difficult for a family to quickly arrange for huge amounts of money required for treatment
- Most of the savings of a family are in the form of fixed assets, which cannot be liquidated quickly
- For instance, most insurers now offer individual policy and family floater plans. You get to protect yourself with an individual plan, but with a family floater plan, you can ensure the health of your entire family.
Advantages of Health Insurance Policy
Rising costs of healthcare as well as the evident need for adequate healthcare today make health insurance policy a definite must. When it comes to critical illnesses, the strain that it can put on a family's wellbeing is undeniable, leaving people to turn to their life savings for aid.
This, however, does not ascertain a concrete solution due to inflation, meaning savings are rarely sufficient to meet such healthcare expenses.
In a typical average Indian household, the male head of the family is usually the only earning member with about 3-4 dependants. Oftentimes, if the primary breadwinner’s ability to work is compromised due to a major illness, the rest of the family remains in dire straits. It would not be possible for them to sustain their lifestyle, repay debts or even afford the high costs of treatment.
- Cashless hospitalization: In case if you are suffering from a health problem and get admitted to one of the network hospitals, you’ll mostly be able to take advantage of cashless hospitalization. The general insurance company will pay your medical bills to the hospital. Thus, you will not be required to bear the high treatment costs from your pockets. In case if you are admitted to a non-network hospital, you will be able to use the reimbursement claim facility here.
- Network Hospitals: Network or tie-up hospitals are the hospitals with which the insurance companies enter into an agreement to provide cashless treatment service to their customers. In cashless hospitalization, the customer need not pay medical bills to the hospital. They provide free and cashless services. The insurance company tie-up with those hospitals and they take care of the medical expenses charged by the hospital.
- No Claim Bonus:
No claim bonus or the renewal bonus is the increase in sum insured at the time of renewal provided by the insurance company for no claims made in the previous policy year. The maximum renewal bonus or No claim bonus provided by the insurance companies would not exceed 100% of the basic sum insured.
There are a few health cover plans which provide a 10% to 50% renewal bonus for each claim-free year. The higher the renewal bonus percentage each year, the higher would be the sum insured at the time of renewal. The best health insurance policy is the one that provides up to 100% renewal bonus or no claim bonus for each claim-free year.
- Add-ons or Riders: You can purchase a critical illness or accident cover add-on to make sure that your policy covers such exclusions as well.
- Financial Protection: If you unexpectedly die/ permanent disability happens due to an accident having a health insurance policy will cover you and your family with financial protection.
- Peace of Mind: Having a health plan eliminates the need for you to worry about healthcare expenses and allows you to choose the best medical care for yourself and your family. Best care can also give good recovery, allowing you to get back to your healthy life.
- Affordable healthcare:
Coverage and Premium are the most frequently compared things while deciding on the best health insurance policy. But comparing the coverage with the premium charged by the insurance companies is the big mistake people made. A health insurance policy has many things such as inpatient hospitalization, Ayush treatment, and other terms and conditions which should be thoroughly checked before buying it.
So, before buying the policy consider all the factors because a simple analysis of comparing different health insurance policies against the premium from different insurance companies can only result in disappointment at the time of claim settlement. Buy health insurance policy with PolicyBachat compare with different companies and get low premiums.
Disadvantages of Health Insurance Policy
One of the main disadvantages of having health insurance is the cost. Health insurance policy can be very costly even for those that have a health insurance plan through their employers.
Costs may be so high that many end up struggling to make payments. This can be quite challenging for those who have low incomes or are self-employed. Health care coverage for families may cause an added financial burden.
Health Insurance Benefits
Health insurance is a major necessity for the healthy life of an individual. Below are the benefits of having a health insurance policy
- Comprehensive Coverage:
Buying a policy online will help you tackle health-related issues and avail the best possible medical treatment without worrying about expenses. Most of the health insurance plans cover healthcare expenses such as In-Patient Hospitalisation Expenses, Pre-Hospitalisation and Post-Hospitalisation Expenses, Ambulance Expenses, Daycare Expenses, Domiciliary Hospitalisation Expenses, etc.
- Cashless Treatment:
Generally insurance companies have tie-ups with hospitals, known as network hospitals that offer cashless treatment to the insured in case of hospitalization. These hospitals reimburse the expenses related to treatment availed by the insured. This means, you can avail of treatment at these hospitals without paying anything for the medical expenses incurred, and the insurance company will reimburse you for the same later when you make a claim. Note that the claim will be approved if it is made in accordance with the terms and conditions mentioned under the policy.
- Portability Benefits:
Health insurance portability allows the policyholders to transfer their existing health insurance policy to a new health insurance provider. It safeguards customers from being taken for granted by the insurance companies, thereby giving them flexibility and offering them better options in case they are not satisfied with their existing health insurance plans.
- Financial Security Against Rising Medical Costs:
Considering the rising medical expenses in India, it becomes imperative to get a reliable health insurance policy on time. The policy not only offers you wide coverage but also protects you from hospitalization expenses in case of emergency even during inflation. It not only keeps you stress-free but also takes care of your health.
- Tax Benefits:
The government promotes health insurance by offering tax deductions on the premium paid for them, under Section 80D of the Income Tax Act, 1961.
- Lifetime Renewability Benefit:
Lifetime renewability benefit allows the policyholder to renew their health insurance policy without any age limit or upper restriction. Especially for senior citizens and parents, the lifetime renewability benefit takes off the financial pressure in case of a medical emergency. The Insurance Regulatory and Development Authority of India (IRDAI) has given guidelines to the insurance providers to offer this benefit under the health insurance plans that they offer.
Before purchasing a health insurance policy know about the advantages and disadvantages of health insurance in India. Compare health insurance quotes to get the best health insurance plan online at PolicyBachat easily.
Health Care Insurance-Pros and Cons
Healthcare insurance, in general, has its advantages and disadvantages which are to be weighed before purchasing the right health insurance policy. The rising cost of health care in the country has pushed many people towards purchasing health insurance as per their requirements. The COVID-19 pandemic has also brought much awareness among the general public in terms of the importance of health insurance due to the heavy costs involved with the treatment for coronavirus.
Health insurance is the only way of protecting yourself from spending heavily on medical bills and ensures that you walk out of the hospital with a healthy pocket. Can you name a few people who can help you with Lakhs of rupees at any point in time? What if you are admitted to a hospital at midnight? Where will you run for the money at the odd times? All these problems can be addressed with a single health insurance policy which can be taken based on your requirements.
There are many general insurance companies as well as Standalone health insurance companies offering health insurance products in the market. Even IRDA has suggested and asked the insurance companies to roll out a standard health insurance product to benefit the policyholders at the time of Porting the policy from one insurance company to the other.
What are the Pros and Cons of availing a Healthcare Plan
Pros of health insurance are Cashless hospitalization, Network Hospitals, No Claim bonuses, Add-ons, or Riders, Financial Protection, Peace of Mind, Affordable healthcare. One of the main cons of having health insurance is the cost, Pre-Existing Exclusion, Waiting Period, Increase in Premiums, Co-Pay.
Let us understand the advantages and disadvantages of Healthcare insurance before purchasing one:-
Advantages of Healthcare insurance:
Cashless Treatment & Reimbursement:
One of the biggest advantages of the health care insurance is its ability to provide the cashless facility in the network hospitals. Customers can directly go to the hospital and get admitted after showing the health insurance card provided by the insurance company. The insurance companies have a tie-up with the hospitals to provide cashless treatment to their customers and later claim from the insurance companies. This cashless system has proved to be beneficial to many people who cannot afford to spend Lakhs of rupees for treatment.
Another option provided by the insurance companies is to go for reimbursement. That is the customer has to pay the medical bills and later claim from the insurance company by submitting all the required documents. This is the least preferred method opted by the customers and another point to be noted is that Cashless hospitalization is available only in those hospitals where the insurance company is having a tie-up.
Ease of admission in Hospitals:
Hospitals normally admit a patient after paying a token amount and starting the treatment. The rest of the amount is to be paid before discharge without which the treatment would be halted and the discharge process would be affected. This kind of situation is not faced in case of admission in the hospital with a valid health insurance policy.
You can get admitted to the hospital by showing the health insurance card given to you by the insurance company. This card acts as the token amount for admission to the hospital. This ease of admission in the hospital at any point of time is possible only with the health insurance policy.
Income tax exemption:
Indian government has been encouraging people to purchase health insurance and is also providing tax benefits for purchasing health insurance. Below are the income tax exemption amounts under Section 80D of the Income-tax act.
- Family age below 60 years: The deduction for the medical insurance premium paid for family ( Self, Spouse and Dependent Children) is up to Rs.25, 000/- and the Health care insurance premium paid for Dependent Parents below the age of 60 years is Rs.25, 000/-. The total deductions that can be claimed for the family with the age band below 60 years are Rs.50, 000/-.
- Parents aged above 60 years: In case either of the parents is aged above 60 years, the deductions for the health insurance premium is up to Rs.50, 000/- for the premiums paid towards Parent’s Health insurance. The deduction for the medical insurance premium paid for the Family (Self, Spouse, and Dependent Children) is up to Rs.25, 000/-. Hence, the total deduction, in this case, is Rs.75, 000/-.
- Self/Spouse & Parents aged above 60 years: When one family member is above 60 years of age, one can claim up to Rs.50, 000/- under the Income-tax. Additionally, for parents over 60 years of age, medical insurance paid is exempted up to Rs.50, 000/- under the Income-tax act. The total deduction for family members aged above 60 years and parents aged above 60 years is Rs,1, 00, 000/-.
The biggest benefit of Health insurance is that it prevents the sudden erosion of your savings and assets. You might be investing an amount for your child's study or marriage and the same amount might be eaten in case of your hospitalization if you don’t have proper health insurance coverage. Health insurance with Cashless or Reimbursement option protects your financial health and prevents you from liquidating your assets to pay the hospital bills in case of hospitalization.
Having a health insurance policy can provide a good sleep to you thinking that the hospitalization expenses will be taken by the insurance company and all your savings and assets will be safe. The premium paid for a health insurance policy depends on the sum insured required and the age of the family members. The premium paid per year would not be more than 5% of your annual income but prevents you from spending your annual income in case of hospitalization.
Disadvantages of Healthcare insurance:
Health insurance policy is like any other insurance policy when it comes to terms and conditions. A normal health insurance policy contains three types of waiting periods:-
- Initial/30-day Waiting Period: This waiting period is applicable to all the new policyholders who have to wait for at least 30 days before claiming for any hospitalization. Hospitalization due to an accident is exempted from this waiting period.
- Specific disease waiting period: There are certain diseases mentioned in the policy copy such as Knee cap replacement, Hernia, Cataract treatments where the waiting period is at least one 1year. You have to wait for one or two years before claiming for the diseases or illnesses mentioned in the policy copy.
- Pre-existing disease waiting period: Pre-existing illness or disease is a condition or ailment that already exists 48 months prior to the time of purchasing the health insurance policy.
Health insurance policy has these three types of waiting periods which are applicable to all the customers after taking the policy. The main disadvantage of health insurance is the waiting period mentioned in the policy copy. There might be instances where the customer has taken the health insurance policy but might not be able to use it owing to the waiting periods mentioned in the policy copy.
Premium increases with Age:
Health insurance premiums are based on the age of the customers and the sum insured selected. The premium increases with an increase in age and would be on the higher side for people aged above 60 years of age. This is due to the increased risk of hospitalization at old age. The higher the risk of hospitalization, the higher would be the health insurance premium.
There are separate health insurance products designed specifically for senior citizens. Insurance companies have also launched health insurance products covering the specified diseases and charging premiums for the same. Although there are health insurance products specifically for senior citizens most of them have a Co-pay clause.
The co-pay clause specifies that a certain percentage of the claim amount has to be borne by the customer. The co-pay can range up to 50% of the claim amount. Having co-pay in the health insurance policy is also a burden to the customer who may not afford the co-pay claim amount.
Health insurance policy comes with standard exclusions as well as specific exclusions. The standard exclusions are the same for all the health insurance policies which are specified by the IRDA, while the Specific exclusions are not standard across the insurance companies. Each insurance company can insert specific exclusions in the policy copy to and the same has to be verified by the customer before making the purchase.
Standard Exclusions such as Cosmetic treatment, Diagnostic costs, Medical expenses to treat Suicide attempts, etc are not covered under any health insurance policy unless specifically mentioned in the coverage.
Specific exclusion such as 9 months waiting period for Pregnancy-related hospitalization is also mentioned in the policy copy and varies from one insurance company to the other.
The disadvantages of healthcare insurance are negligible when compared to the advantages offered by healthcare insurance policies. The disadvantages can be overcome by the proper understanding of the terms and conditions mentioned in the policy copy.
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