Healthcare expenses are increasing at a rate higher than medical inflation, and that is why it is must for everyone to have a health insurance cover which not only helps you to save your emergency funds and saving of lifetime, in case any medical emergency occurs to you or your near and dear ones, but also supports you to deal with rising medical costs.
Experts believe that a health insurance policy must be a part of your financial planning and it should be purchased early when you are young and responsible to stay safe and secured. Investing in a health insurance plan at an early age also provides other numerous advantages such as better sum insurance coverage, lower premium rates, no medical tests and so on.
Here’s a guide which explains clearly all about health insurance policy , factors affecting health insurance, what are the different kinds of health plan which one can opt for and much more.
What Is Health Insurance: Health Insurance Meaning
Health insurance policy is an assurance which provides immediate financial help in case when any medical emergency arises. It is a contract between a policyholder and the insurance company which covers medical expenses that might occur due to illness, injury or accident. If you have a health insurance policy, then some or all the medical expenses will be borne by the insurance company, against which an insured is supposed to pay a certain amount known as premium.
There are two ways by which which the insurance company compensate for your medical expenses:
Cashless Treatment: Here, the policyholder is not supposed to pay anything to the network hospital. As the insurance company pays the hospital directly.
Reimbursement: Here, the policyholder is supposed to settle their medical expenses first and later ask for reimbursement from the insurance company.
Why Should I Have A Health Insurance Policy?
Purchasing a health insurance plan is something that we all avoid till the time we understand its importance. Before buying one, it is crucial to understand the various benefits of a health insurance plan as medical emergencies can knock anytime and could make a big hole in your pocket. Therefore, it is advisable to buy a health insurance policy at a very young age, where one can have the comprehensive coverage at an affordable premium cost, plus you also get the advantage of tax deductions on premium paid.
In a nutshell, one should purchase a health insurance policy because:
It facilitates you to get superior medical treatment without any worry of high medical costs.
Offers specialized coverage for critical illnesses.
Covers road emergency ambulance costs.
Offers an affordable premium for youngsters.
Provides cashless claim benefit, which allows you to take care of your health instead of worrying about hefty medical bills.
Protect your savings during medical emergencies.
Provides tax benefits under Section 80D.
Lastly, it safeguards you and your family and protects your savings.
Kinds Of Health Insurance Policies
There are basically two kinds of health insurance policies such as individual or self-plan and family floater policy. As the name suggests, individual policy would only provide coverage and benefits to the main policyholder. On the other hand, in case of a family floater plan, there is only one plan which provides coverage to your entire family such as spouse, dependent children, parent and parent-in-laws or dependent siblings.
One should select the plan, depending upon the factors such as your age, family medical history, children’s age, medical history and of course one’s budget. Let’s understand about each of these plans in detail:
Individual or Self Health Insurance Plan
An individual health insurance policy is issued under the name of a single policyholder, which means that the sum insured coverage and the benefits of the policy is totally dedicated to the insured and covers no one else. Here, the individual purchases the policy to maintain their own health which in turn provides financial help in case of their own medical emergency.
Family Floater Health Insurance Plan
Family floater policy is one policy which aims to provide sum insured coverage to individual and as well his family members. Rather than taking a single policy for each member of the family, the family health insurance plan is a better option, as it acts as an umbrella for the entire family. Here the sum assured coverage is shared by all the members who have been covered under the same plan.
However, it is advisable to have a separate plan for your senior citizen parent or parent-in-laws as it will prove to be a more affordable option. Similarly, if any member in the family has a huge medical history, then it is also better to buy a separate plan for them rather than covering them in the family floater plan.
Factors To Consider Before Deciding On A Health Insurance Plan
Step 1: Finding the Right Insurance Company
Here are some factors that you can use in deciding on the right health insurance company –
1. The Range of Plans Offered
Check out the different types of plans that a company offers as well as the plan USPs. Some companies offer a range of products to suit the varied coverage requirements that you have. Choose a company with a diverse range of plans so that you can find the right policy suiting your needs.
2. The Network of Hospitals
The network of hospitals is extremely important for availing cashless claims. The wider the network that an insurer has, the better it would be. This would allow you to locate the nearest cashless hospital with ease.
3. Claim Settlement Ratio
The claim settlement ratio points to one thing – what percentage of claims did the company settle in a financial year. A higher ratio indicates that the company is steadfast in settling its claims. A factor that works in favor of the insurer.
4. Claim-Based Loading
Some companies tend to increase the renewal premium if you made claims in the previous years. This converts to higher premium expenses. As such, avoid companies that follow this practice.
5. Premium Rate
Pricing policy is how much premium the company charges vis-à-vis its competitors. You can check the pricing policy by comparing similar plans across different companies.
For instance, the Aarogya Sanjeevani policy offers uniform coverage features across all insurers. Its premiums, however, depend on the insurer’s pricing policy. Compare the premium of the plan across insurers to find the insurer that charges the least. Chances are, its pricing policy would be fair across all its plans.
6. Ease of Claim Settlement
Insurers have revolutionized their claim process and made it simpler. The following concepts are gaining traction:
AI-enabled claim processing
WhatsApp intimation
Digital documentation
Quicker approvals
App-based claim intimation and tracking, etc.
Such facilities speed up the claim process and make it hassle-free. Thus, look for insurers that provide such facilities for quicker claim settlements.
7. Reviews
Lastly, don’t ignore customer testimonials and reviews. Most insurers showcase their customers’ reviews on their websites. You can check them out. Alternatively, you can talk to your friends and relatives about their insurers. If they have made a claim, find out their claim experience to know which company follows the best practices.
