Is Health Insurance Important for Indians?

A health insurance policy is a type of policy where the insurer bears the expenses that you incur during hospitalisation or medical treatment. How it works is you pay monthly premiums to keep your policy active, and in case you’re diagnosed with ailments that are covered in your policy, then either your insurer will directly pay your treatment expenses to the network hospital, or reimburse the amount that you paid for your treatment after due process.

We are all aware that medical costs in India are shooting through the roof. If you want the best treatment available in India today, you’re likely to burn a hole in your pocket and eat into your savings. What health insurance allows you to do is to make sure that your and your family’s medical needs are taken care of. For quite affordable premiums you can avail insured sums that are quite significant and when the need arises to claim your policy, you can rest assured that your savings remain untouched because you can rely on your health plan.

A health insurance policy has the following features:

Cashless Treatment

Most good health insurance policies offer cashless facilities, which means that you do not have to pay a single penny to the hospital. This feature is usually reserved for network hospitals, where the insurer has a tie-in with the hospital and pays your claimed amount directly to the hospital.

Pre and Post Hospitalisation Expenses

Apart from the actual treatment and hospitalisation costs, your health insurance policy will also offer expenses incurred by you for diagnostic tests, doctor’s visits etc. in the pre and post hospitalisation period. This can be anything from 30 to 90 days depending on the health policy.

Cost of Transportation

Health insurance plans also offer coverage for ambulance cost and transportation from a remote location.

No Claim Bonus

In case you do not claim your insurance in a given year, a bonus amount will be added to your total coverage amount, thus providing higher health coverage than before.

Annual Medical Checkups

Your health insurance policy will also include an annual health check up totally free of cost. A regular health assessment can help you discover illnesses early and begin treatment.

There are a few factors that you have to consider when selecting the right health insurance:

• Inclusions and exclusions
• Sum Insured
• No Claim Bonus
• Copayment Clause
• Renewability Clause
• Waiting period for Pre-existing Conditions
• Number of family members included in the family floater plan.
• Premium Paying Term
• Premium Amount

According to Section 80D of the Income Tax Act, premiums paid towards your health insurance policy are tax deductible.A deduction of Rs. 25,000 is applicable for premiums paid for health insurance for yourself, your spouse and children. If insurance has also been availed for parents under 60 years of age, an additional Rs. 25,000 can be deducted. If parents are above 60, their deduction can go upto Rs. 50,000. If the taxpayer and the parents are both above 60 years of age, then the total deduction applicable would be Rs. 1,00,000.

An individual health plan offers health coverage to a single person or individual. Premiums are decided by factoring in the insured sum, age and health of the policy buyer.

Family Health Insurance

A family health insurance plan offers an umbrella protection to the entire family within a single policy. The couple themselves and two children are usually included in a family floater policy.

Senior Citizen Health Plan

A senior citizen plan is specially designed to provide health coverage of persons above 60 years of age.

Critical Illness Plan

Critical illness insurance protects you from critical illnesses like cancer, stroke etc. and covers treatment expenses for these diseases that are not usually included in a regular health plan.

Maternity Cover

A maternity cover is a type of health insurance that covers expenses related to childbirth and pre and postnatal care.

• RashtriyaSwasthyaBima Yojana (RSBY)
• Pradhan Mantri Suraksha Bima Yojana
• Central Government Health Scheme (CGHS)
• AamAadmiBima Yojana (AABY)
• JanashreeBima Yojana (JBY)
• Employees State Insurance Scheme (ESIS)
• Universal Health Insurance Scheme (UHIS)

• Proof of identity
• Proof of residence
• Bank statement or proof of income
• Application form
• Medical test reports if applicable.

Health insurance is one of the most vital plans that you could put in place for you and your family. It safeguards you from the heavy financial burden that medical treatment can bring. Medical costs are rising and will continue to rise, and a good health insurance policy will ultimately allow you to keep your savings safe because when the need arises for expensive medical treatment, your health insurance will take care of it.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.