The Main Purpose of Health Insurance

A health insurance policy will either provide cashless treatment or will reimburse the medical expenses arising from any illness or injury that causes hospitalization, and is covered under the insurance policy of the insured. The cashless treatment can be availed by the insured at a network hospital as listed by the insurance company. The cost of health insurance is further subsidized by the government in the form of tax exemption under section 80D of the Income Tax Act, 1961.

Importance of Health Insurance in India

Bad eating habits along with a fast-paced life and a high risk of incidence of diseases at a young age are just a few of the factors that can lead to a medical emergency. Such medical emergencies can cause financial problems if you and your family aren’t covered under a health insurance plan. Moreover, good quality medical care remains beyond the reach of most Indians. This makes it very important that everyone must have a health insurance policy that is the best for them. The best medical insurance policy in the market provides coverage for hospitalization costs, medication and lab tests costs, and includes cover for critical illnesses.

Tax Benefits under Section 80D of Income Tax Act

As already mentioned, health insurance is subsidized by the government in the form of tax exemption. Under the Income Tax Act, 1961, health insurance is an important investment, which makes it all the more ideal to invest in health insurance. To do this, the incentive of tax benefits is offered in the form of exemption. If you have a health insurance policy, you can enjoy tax deductions for up to ₹25,000 under Section 80D of the Income Tax Act, 1961. According to Section 80D, income tax exemption is provided for premiums on health policies for self, spouse and children, and also towards policy for dependent parents.

Choosing the Best Health Insurance Plan

There are a number of health insurance plans available in the market, such as critical illness, medical insurance or mediclaim policies, individual medical policies, family floater plans or unit linked health plans. But, it is important that you choose the correct policy that fulfills all your needs without being overly expensive.

Here are some ways that will help select the best health insurance plan:-

• • Know Your Requirements

  Before you buy an insurance plan, it is important to know what you want from it. For example, if you have a spouse or children, then a family floater plan will be perfect for you as family will be covered under the same policy without paying any extra premium, and you will be able to avail discounts as well. If you happened to be registered in a group insurance by your employer, then you may need some extra coverage. Based on your age and health history, you need to analyze your medical insurance needs at present. You will also need to consider the need of critical illness in your insurance bouquet.

• • Compare Quotes

  Different health insurance plans have different features, premiums, coverage, etc. Once you know your requirements from a health plan, you can spend some time researching and comparing quotes. Most insurance providers allow you to know probable premium on the health insurance plan. You can get quotes for the shortlisted health plans and compare them to arrive at a decision and purchase the best medical insurance policy.

• • Re-read the Terms and Conditions When Re-enrolling

  If you happen to already have a health insurance policy and want to re-enroll yourself in it, then it is important that you re-read the terms and conditions of the policy again. This will ensure that you are aware of the updated terms and conditions of the policy, as there are chances that the insurance company might have changed or updated them.

• • Switching Plans

  If you find another policy that gives you higher benefits at the same price that is lower than your current policy, then you should consider switching plans. Your health insurance plan cannot remain the same throughout your life. Changing of plans should be considered if you are single and are planning to get married, or if you are already married and starting a family is on your mind then you may wish to have a maternity coverage as well. Changing health insurance plans may also help you deal with the ever changing medical requirements.

• • Check the Policy’s Tenure

  It is important that you are aware of your health insurance policy’s tenure. Most of the medical plans offered by general insurance companies ask for renewal of the plan every year. In comparison, health insurance policies offered by life insurance companies can be renewed after three years or even more, depending on the plan that you have opted for.

• • Don’t Get Attracted by Freebies

  The market is filled with many companies offering medical policies. The competition in the market is so strong that the insurance providers often try to attract potential customers by offering discounts, offers and freebies. It is advisable that you should not be lured by the discounts and freebies, and should concentrate on getting the health coverage you want from your medical plan. Getting lured by the freebies may lead you to getting over-insured or under-insured in a health insurance plan which may not serve your purpose.

• • Annual Limit

  The annual limit of the policy is another aspect that must be considered when purchasing a health insurance policy. If you are living in a small or a mid-sized city, then your aim of cover should between ₹2-3.5 Lakhs. Whereas, if you are put up in a metropolitan city than you should get a medical cover of not less than ₹4-5.5 Lakhs.

• • Network Hospitals

  When purchasing health insurance, make sure that you go through the list of network hospitals that are covered by your insurance provider. See to it that your preferred hospitals for treatment are in the list or not. If you have no fixed preference in terms of hospital, opt for a health insurance plan that has reputed hospitals and health-care centers in the list of network hospitals.

• • Clause on Sub-Limit

  The rising cost of health-care has compelled many insurance providers to introduce sub-limits in the mediclaim policies. Sub-limit means that you must the bear the expenses of medical care out of your own pocket if the costs go beyond a certain limit. This limit is set by the insurance provider. Diagnostics expenses, doctor’s fees and room rent are the most common expenses for which the insurance companies set sub-limits.

• • Pre-existing Disease Clause

  It is advisable to seek clarity on pre-existing disease clause, when you purchase a health insurance plan for a senior citizen. Check if there are any ambiguities in the renewal clause, and the waiting period for the pre-existing disease.

  The benefits of buying a health insurance policy are undeniable. Just keep the aforementioned points to save both your time and money when buying one.