Understanding Medical Health Insurance

Medical health insurance is an essential aspect of every individual’s financial planning. It is a type of insurance that covers medical expenses incurred by the insured person in case of illness, injury or disability. With the increasing cost of healthcare, it becomes imperative for everyone to have a medical health insurance policy.

How does Medical Health Insurance Work?

Medical health insurance works on the principle of risk-sharing. When an individual buys a medical health insurance policy, he/she pays a premium to the insurance company. In return, the insurance company agrees to pay for the medical expenses incurred by the insured person in case of illness or injury, up to the sum assured.

The sum assured is the maximum amount that the insurance company will pay in case of a claim. The premium paid by the insured person depends on various factors like age, health condition, medical history, etc. The premium amount is typically higher for older people and those with pre-existing medical conditions.

When the insured person falls sick or gets injured, he/she needs to inform the insurance company about the same. The insurance company will then coordinate with the hospital to settle the medical bills. The insured person may need to pay a deductible or co-payment, depending on the policy terms.

In case the medical bills exceed the sum assured, the insured person will have to bear the additional expenses. This is known as out-of-pocket expenses. However, most medical health insurance policies have a cap on out-of-pocket expenses, beyond which the insurance company will pay for all the medical expenses.

Types of Medical Health Insurance Policies

There are several types of medical health insurance policies available in the market. These policies differ in their coverage, premium amount, and the sum assured. The most common types of medical health insurance policies are:

Individual health insurance policies are preferred by individuals who want to have a separate policy for themselves. Family floater health insurance policies are ideal for families as they provide coverage for all members under a single policy.

Critical illness insurance policies are designed to provide financial assistance in case of specified critical illnesses, which require expensive treatments. Group health insurance policies are usually offered by employers to their employees as a part of their employee benefits package.

Factors to Consider While Choosing a Medical Health Insurance Policy

Choosing the right medical health insurance policy can be a daunting task, given the numerous options available in the market. Here are some factors that you need to consider while choosing a medical health insurance policy:

Coverage

The first and foremost factor to consider is the coverage provided by the policy. You need to ensure that the policy covers all the medical expenses that you are likely to incur. You should also check if the policy covers pre-existing medical conditions.

Premium

The premium amount is another important factor to consider. You need to choose a premium that is suitable for your budget. However, do not compromise on the coverage provided in order to get a lower premium.

Sum Assured

The sum assured is the maximum amount that the insurance company will pay in case of a claim. You need to choose a sum assured that is adequate to cover all your medical expenses.

Network Hospitals

Most medical health insurance policies have tie-ups with specific hospitals. You need to ensure that the policy has tie-ups with hospitals that are near your residence or workplace.

Claim Process

The claim process should be simple and hassle-free. You need to check the claim settlement ratio of the insurance company to ensure that they settle claims quickly and efficiently.

Benefits of Medical Health Insurance

Medical health insurance offers several benefits to the insured person. Some of the key benefits are:

Covers Medical Expenses

Medical health insurance provides coverage for all the medical expenses incurred by the insured person in case of illness or injury. This ensures that the insured person does not have to bear the financial burden of medical expenses.

Tax Benefits

Premium paid towards medical health insurance is eligible for tax deduction under section 80D of the Income Tax Act.

Cashless Treatment

Most medical health insurance policies provide cashless treatment facility at network hospitals. This means that the insured person does not have to pay for medical expenses upfront.

Peace of Mind

Medical health insurance provides peace of mind to the insured person, knowing that they have financial protection in case of a medical emergency.

Frequently Asked Questions

Q. Is it mandatory to have medical health insurance?

A. No, it is not mandatory to have medical health insurance in India. However, it is advisable to have medical health insurance to protect yourself from financial burden in case of a medical emergency.

Q. Can I buy a medical health insurance policy for my parents?

A. Yes, you can buy a medical health insurance policy for your parents. Most insurance companies offer policies specifically designed for senior citizens.

Q. Can I claim tax deduction on medical health insurance premium paid for my parents?

A. Yes, you can claim tax deduction under section 80D of the Income Tax Act for the medical health insurance premium paid for your parents.

Q. What is the waiting period in a medical health insurance policy?

A. Waiting period is the period during which the insured person cannot make a claim for certain medical conditions. The waiting period varies from policy to policy and can range from 30 days to 4 years.

Q. What is a deductible?

A. A deductible is a fixed amount that the insured person needs to pay before the insurance company starts paying for the medical expenses. The amount of deductible is decided at the time of buying the policy.

Q. What is co-payment?

A. Co-payment is a cost-sharing arrangement between the insured person and the insurance company. It means that the insured person needs to pay a certain percentage of the medical expenses, while the insurance company pays the remaining amount.

Conclusion

Medical health insurance is a crucial aspect of financial planning, especially in today’s scenario of rising healthcare costs. It provides financial protection to the insured person in case of a medical emergency, ensuring that they do not have to bear the financial burden of medical expenses. By considering the factors mentioned above and choosing the right medical health insurance policy, you can ensure that you and your family are adequately protected.