An Introduction to how Health Insurance Works

Importance of Health Insurance

People now understand the importance of health and recognise the need to protect their finances against unexpected medical expenses. Healthcare services and medical treatments are getting more expensive day by day. A simple medical procedure nowadays can affect your financial health badly. Hence, being prepared for any medical emergency is the only way to deal with medical inflation. Investing in health insurance can help you avail quality healthcare while protecting your savings at the same time.

If you still don't have health insurance and wonder how health insurance works, keep reading to find out everything about health insurance.

Health Insurance: Meaning and Types

To understand how health insurance works, first know the meaning of health insurance. A health insurance policy is a contract between a health insurance company and a policyholder. Under this contract, the policyholder agrees to pay a premium to the insurer, who in return promises to provide financial cover to the policyholder in case of a medical emergency. The insurer covers medical expenses up to a limit as decided by the policyholder. This limit is the sum insured and is the maximum amount you can claim from the insurance company in a policy year.

Note that a health insurance policy covers only the medical expenses specified in the policy document. Every health insurance policy has exclusions for which no coverage is available. Understand the terms and conditions of the policy and know that all medical expenses are not covered. Always select a policy that covers the treatments you need. The coverage is provided in two ways: cashless settlement and reimbursement.

• Cashless settlement is done when the treatment is taken at a network hospital of the insurer. The insurer directly settles all the hospital bills and the policyholder does not have to pay anything.
• Reimbursement of medical bills is done when treatment is taken at a non-network hospital where the policyholder pays all the bills first and later asks the insurance company for reimbursement.

Let us understand the various types of health insurance policies before we discuss how health insurance works. Some of the most common types of health insurance policies are given below.

Individual Health Insurance

These are policies for a single individual where the sum insured is used to cover the medical expenses of one individual only.

Aditya Birla's Activ Fit health insurance plan provides coverage for youth and rewards them for maintaining good health. The plan is available on an individual as well as family floater basis.

Family Floater Health Insurance

A single health insurance policy covers all the members of a family where the entire sum insured is shared by all the members.

Activ Assure Diamond health insurance plan by Aditya Birla is one such plan providing comprehensive coverage for your entire family.

Group Health Insurance

Employers provide health insurance benefits to their employees by covering all employees in a group health insurance policy. Such a plan covers a group of individuals under a single policy.

Aditya Birla also offers Group Activ Corporate health insurance plan which is a group health insurance offering comprehensive coverage for the well-being of employees.

Senior Citizen Health Insurance

These health insurance policies are tailor-made to suit the needs of senior citizens above the age of 60 years. One such policy is Aditya Birla's Activ Assure Classic health insurance plan for senior citizens that provide coverage for all kinds of treatments and procedures as needed by them.

In addition to these types of policies, there are health insurance plans specially designed to cover specific diseases or conditions. Such plans can be added to your existing policies to enhance coverage. These are critical illness coverage, accident coverage, top-up health insurance etc.

How does Health Insurance Work in India?

Irrespective of the type of health insurance you choose the process of how health insurance works in India remains the same. Here is the complete process from selecting a plan to making a claim.

Finding the right health insurance plan

The first and foremost step is selecting a suitable health insurance policy. With so many choices available in the market, it is not an easy decision to make. Here are a few factors to consider that will help you decide.

• Coverage Amount - Assess your present and future needs and choose a coverage amount that will cover all those needs.
• Right Insurance Company - Select the right health insurance company. Check for the plans offered, a network of hospitals, the claim settlement process, premium amount and customer reviews.
• Customisation - Look for plans that can be customised by adding riders to enhance coverage, when you need it.
• Premium - Check the premium amount that you will be paying. It should be worth the coverage. Don't go for the cheapest plan available, as it may not provide comprehensive coverage.
• Terms and conditions - Read the policy terms and conditions carefully. Check and understand inclusions, exclusions, waiting periods, sub-limits, and co-payments.

Premium payment

Once you have shortlisted a plan, the next step is the premium payment. You can choose a premium payment frequency of yearly, half-yearly or monthly instalments as per your payment capacity. Choose a payment frequency you can easily maintain to ensure continued coverage for the long term. Also, if you want a large sum insured but cannot afford it due to high premiums, you can choose a base policy with a lower sum insured and add a top-up policy for an increased sum insured at a lower premium.

Making a claim

Making a claim is the process of requesting the insurer to compensate the medical expenses incurred by the insured. Check with your insurer to understand how the claim process works and what documents are required to submit a request. Also, understand the conditions when a claim can get rejected and avoid those conditions.

Aditya Birla Health Insurance company has a network of 10051+ hospitals, where you can avail of cashless treatment. In the case of treatment in a non-network hospital, you can request a reimbursement of the medical expenses.

Conclusion

After understanding how health insurance works, research well before buying a health insurance policy and select the best health insurance plan for you and your family.

Aditya Birla health insurance company is one of India's trusted health insurers, having a presence in more than 2300 cities. Visit the official website of the company to explore all the plans and services.