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Advantages and Disadvantages of Health Insurance Policy

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.

Advantages and Disadvantages of Health Insurance

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.

  • Pre-Existing Exclusion: Another disadvantage would involve people who have pre-existing diseases. They have to undergo a waiting period which is typically four years. Insurers typically require you need to wait for four years for any pre-existing illness to be covered.

    This becomes a major obstacle for older individuals with pre-existing medical conditions. This is particularly so because pre-existing illnesses don't only include illnesses you may have received treatment for in the recent past. It includes illnesses for which there were signs or symptoms in the 48 months prior to the payment of the first premium.

  • Waiting Period: In the Waiting period you must wait for a specified amount of time before you make a claim. But you cannot claim some or all benefits of the health insurance from your company. The initial waiting period or 30 day waiting period is the time where the customer has to wait before making a claim under the health insurance policy. Any accident-related claims are exempt from this waiting period rule. This is also added to prevent people from taking health insurance only at the time of illness.
  • Increase in Premiums: The premiums of your Health insurance policy mostly depend upon your age. There can be a significant difference in the premium amount when you purchase a health policy when you are 30 years old and when you buy one after crossing 50 years. The insurers get increased risk by charging a higher premium. This is the reason why it is said that you should purchase health insurance when you are young.
  • Co-Pay: Co-pay is the way of making customers liable and participating in the claim settlement process. Co-pay is the amount of claim which is to be borne by the insured customer at the time of claim settlement. Most of the health insurance policies have a co-pay condition if there are senior citizens included in the policy. Higher the co-pay amount selected by the customer lower would be the health insurance premium.

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.

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