INSURANCE

 

INSURANCE

 

Insurance is the protection one gets from financial losses.  A company or the state provides various kinds of insurance as compensation for the uncertain risks that come unannounced at any point in time and charge a specific amount of premium for the same.  The company that provides the insurance is called the ‘INSURER’ and the person buying the insurance is known as the ‘INSURED’.

 

HEALTH INSURANCE

Health Insurance, also known as Medical insurance is a contract between the insurer and insured that covers the amount of medical expenses of a person as a whole or some part of it in exchange for a premium.  It includes reimbursement of medical, surgical, prescribed drug expenses that the insured occurs. 

Health insurance companies in India provide the following types of insurance:

 

1.     INDEMNITY PLAN:

It comprises of reimbursement of hospitalization or expenses for the doctor's fees incurred by the insured. The insurance company pays a set sum of the total charges and this type of insurance plan is also referred to as a ‘Free-for-Service’ insurance plan. The types include Individual insurance, Group Medical Insurance, Family Floater insurance, Senior Citizen Insurance, ULIPs, and Maternity Insurance.

 

1. INDIVIDUAL INSURANCE:

It is meant for an individual who gets himself insured and is paid back for the expenses that arise due to an illness or any other medical condition. It covers all the hospitalization expenses both pre and post-treatment till the maximum limit of insurance is exhausted. The premium depends on the age and medical history of the person but he can get his spouse, children, and parents insured for the same by paying a little extra sum.

 

2. FAMILY HEALTH INSURANCE or FAMILY FLOATER PLAN:

This plan secures the whole family all together under one cover, i.e., the insured’s spouse, children, and parents all are insured under the same plan. The premium for which is set on account of the age of the eldest member and is paid by only one family member irrespective of how many people are insured. It can be claimed for two family members attaining treatment simultaneously till the limit is exhausted.

 

3. SENIOR CITIZEN HEALTH INSURANCE:

This type of plan takes into account people of and above 65 years of age. The allowance covers hospitalisation and medical costs both during and post-treatment with a higher premium as senior citizens are more prone to health issues. Some plans also guarantee Domiciliary Hospitalization and Psychiatric benefits.

 

4. GROUP HEALTH INSURANCE:

This type of insurance is basically incorporated by an employer for his employees to meet financial crises if any arise in the company. The rate of premium is comparatively lower than that of Individual Health Insurance.

 

5. ULIPs

Expanded as Unit Linked Insurance Plans, besides providing safety it reinvests a part of the premium provided by the insured to buy health covers. The amount earned by this plan is delivered at the end of the policy and is subject to market risks.

 

 

 

2.     FIXED BENEFIT PLAN:

This plan covers expenses for a preordained illness or condition that has been insured for. A fixed sum of amount i.e., the amount that was insured, is paid and can be considered as a supplement of funds in the time of need. The types comprise insurance for Critical Illnesses (Cancer, Heart disease), Personal Accident, Hospital Cash Plan, and Preventive Insurance.

 

1. HOSPITAL DAILY CASH

This kind of health insurance comes to aid when paying unexpected hospital expenses. The insured gets a daily cash benefit of 500-10,000 Rupees as per the conditions mentioned in the contract. Convalescence benefits are also offered in some of the plans if the individual gets hospitalized for more than seven days including Parental accommodations, and a wellness coach.

 

2. PERSONAL ACCIDENT INSURANCE:

Due to the rise in the number of road accidents and the traumas that accompany it, availing of personal accident insurance is a clever idea. It provides the victim and their families support by paying the lump sum amount. The additional benefits that it offers are educational benefits, orphan benefits, and the loan obligations of the insured are also covered in some cases.

 

3. CRITICAL ILLNESS INSURANCE:

It provides the lump sum amount for fatal diseases, at the time of the contract specific ailments are included for which the insured can claim the insurance for along with a pre-determined amount to be paid. Only with a mere diagnosis of the disease the benefits can be claimed, hospitalization is not mandatory under this plan. The ailments include: major organ transplant, heart diseases (stroke, bypass), kidney failure, cancer, paralysis, and multiple sclerosis.

 

 

 

     3.   OTHER TYPES OF INSURANCE PLANS OFFERED:

1. TOP-UP HEALTH INSURANCE:

With a “Deductible Clause” added along with the policy it covers higher amounts. At the end of the term,  payment made is a much higher amount than the pre-defined one.

2. MEDICLAIM:

Covering the in-patient expenses including hospitalization, surgery, doctor’s fees, nursing charges, oxygen, and anesthesia and is offered as individual, group, and overseas medical insurance.

3. DISEASE-SPECIFIC (M-CARE, CORONA KAVACH, ETC)

Due to the rise in Covid-19 cases, Bajaj Allianz has come up with a new insurance policy ‘CORONA KAVACH’ that provides coverage for a person affected by Covid-19. The M-Care Health Insurance deals with mosquito-prone diseases like Dengue, Malaria, Chikungunya, and Zika Virus.

 

The following tables summarises the above mentioned types of Health Insurance.

 

IMPORTANCE OF HEALTH INSURANCE

Hospital expenses can burn a hole in your pocket and derail your finances so it is of utmost importance to get yourself health insurance to face the contingent issues that may arise in the future.

The following are a few reasons why health insurance is important:

1. TO DEAL WITH MEDICAL INFLATION:

With the rise in the array of diseases, the figure of medical expenses increases manifolds. Doctor’s fees, diagnosis, unlimited tests, ambulance charges, surgery costs, medicines, hospital expenses become burdensome and put a strain on the financial position of an individual when they go through a medical condition. With pocket-friendly health insurance, one can conquer these obstacles between a person and his wellbeing and helps to beat medical inflation.

 

2. TO DEAL WITH CHANGING LIFESTYLE:

Due to changes in lifestyle people have started facing illness at a very young age. Pollution, the pace of life, excess stress are a few factors that influence lifestyle changes. As the saying goes ‘ Prevention is better than cure’ it is always advisable to have health insurance considering the uncertainty of life.

 

3. TO PROTECT THE FAMILY:

Rather than purchasing separate policies for each family member, one can go for family insurance. With age comes the risk of easily being prone to various diseases. Ensuring that the family gets the best treatment is the priority of all and purchasing health insurance reduces that stress.

 

4. PROTECT YOUR SAVINGS:

Diseases often knock at your door without invitation. Not having an adequate financial position to fight them adds stress and anxiety. Health insurance plays an extremely important role here by not only backing your treatment expenses but also providing a sense of relief to both the ill and their family.

 

5. TAX BENEFITS:

The government of India offers a certain amount of tax deduction when it comes to purchasing health insurance which saves one their hard-earned money. Section 80D of the Income Tax Act furnishes the provisions for the same.