Why Health Insurance is Important? It is very important to have health insurance as a healthy cover for yourself. If you are unexpectedly sick or injured or you have an accident, you need to have health insurance cover. Health insurance covers the cost of your medical bills and also pays you benefits in case you are unable to work. It also helps to cover your family in case of any unforeseen events. It is very important to have health insurance because:
Health Insurance helps in treating your illness faster and better than before. Health Insurance helps you in getting the best treatment available for you, without asking for a single penny from your pocket. Health Insurance gives financial support to help you recover from the illness fast and with ease. Health Insurance protects your family from financial loss that could occur due to any unforeseen event or accident like death or disability.
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Why Health Insurance is Important? And How Health Insurance is Beneficial For Us
Health Insurance gives you financial support to cover hospitalization expenses. Health Insurance provides you with cashless medical facilities. Health Insurance covers pre-existing conditions, critical illnesses, and chronic diseases. Health Insurance gives you peace of mind, knowing that your family is financially protected in case of any unforeseen event or illness.
Health insurance is very important for every individual and their family as it helps them in getting good treatment without paying any money from their pocket and also helps in protecting their family from any financial loss that could occur due to any unforeseen event or accident like death or disability.
Why Health Equity Is Important?
Health is wealth. Everyone wants to be healthy to enjoy life. Health is the most important asset for any individual and their family. If you are not healthy, you cannot enjoy your life to the fullest. Every individual and their family needs to stay healthy to live a happy and prosperous life. Just like financial security, any person or family needs to have good health to enjoy life without having any financial worries.
Health insurance gives you financial support so that you can get good treatment without paying anything from your pocket. If there are any expenses towards medical treatment, health insurance provides financial help with those expenses so that it does not affect your finances in any way and at the same time helps you get good treatment from a renowned hospital or clinic by availing the cashless medical facility.
Health insurance also helps in protecting your family from loss of income due to death or disability of an insured person as the insurance company pays out a sum of money as per the policy agreement so that his/her family doesn’t face any problems after losing their breadwinner or earning member due to death or disability caused by an unforeseen event or illness like an accident, heart attack, stroke etc.
Health insurance helps you get peace of mind as well as it ensures that your family will not face problems if something unexpected happens suddenly like the death of an earning member or some critical illness which requires a lot of money for its treatment but at the same time they will be able to get good treatment from a renowned hospital or clinic by availing the cashless medical facility.
Health insurance helps you get good financial help if you are diagnosed with a critical illness or an unforeseen accident happens due to which you have to undergo treatment from an expensive hospital or clinic and at the same time it ensures that your family doesn’t face any financial problems after losing their breadwinner due to death or disability caused by an unforeseen event.
Health insurance covers the following expenses:
1) Expenses on medical treatment for critical illnesses like heart attack, stroke, cancer, kidney failure etc.
2) Expenses on the treatment of non-critical illnesses like chronic diseases, diabetes etc.
3) Expenses on health checkups and wellness checkups that are recommended by doctors.
4) Expenses on preventive health checkups like mammograms, pap smears etc. (This is optional.)
5) Expenses on surgical procedures like organ transplantation, hip replacement surgery etc. (This is optional.)
6) Expenses on ambulance service for transportation of critical patients to hospitals/clinics in case of an accident/emergency at home or outside in case of an accident/emergency while traveling abroad as well as within India (This is optional).
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How To Choose Best Health Insurance: Step-By-Step Guide
Health insurance is a very important financial product. It’s a must have for every family. Choosing the best health insurance plan for your family is very important. The following step-by-step guide will help you choose the best health insurance plan:
1) Decide on how much coverage you need:
a) Critical Illness Coverage: Critical illness coverage covers expenses for critical illnesses like heart attack, stroke, cancer etc. This is very important because these are life-threatening diseases and can leave your family in financial ruin if you don’t have any health insurance. I recommend that you go for a critical illness cover of at least Rs. 5 lakhs or $10,000 depending upon the number of people dependent on your income. You can also choose to buy critical illness cover of Rs 10 lakhs or $20,000 if you want to be extra safe.
2) Decide on how much coverage you can afford:
a) Health Insurance Premium: Health insurance premium depends upon various factors like age, sex, height, weight etc., of the insured person as well as the sum assured and the term chosen by the insured person (i.e., whether he wants to pay monthly or yearly). To decide how much premium you can afford to pay per month/year, it’s important that you first calculate your monthly/yearly disposable income after deducting all expenses like rent/mortgage payments, car loan payments, EMI payments, credit card payments, school fees, grocery expenses, entertainment expenses etc.
You can use this calculator to calculate your monthly/yearly disposable income:
Health Insurance Premium = Monthly/Yearly Disposable Income x (1 + Health Insurance Premium %)
b) Term: The term of a health insurance policy is the number of years for which you want to buy the health insurance policy. If you choose a 1-year term, then you will have to renew your policy after 1 year. The premiums will be higher if you choose a longer-term because the insurer has to pay for your medical bills for a longer period. So if you are young and healthy and don’t have any major health issues, then you should choose a short-term policy (1-2 years).
On the other hand, if you are old or have some serious health issues or have a family history of major diseases like cancer or heart attack or stroke etc., then you should choose a long-term policy (5+ years).
c) Sum Assured: The sum assured is the amount that your insurer will pay in case of an unfortunate event like death or critical illness. I recommend that you buy at least Rs 5 lakhs ($10,000) worth of the sum assured because this amount can help your family survive financially in case something happens to you.
3) Choose an insurer:
Now that you have decided on the term and the sum assured, it is time to choose an insurer. There are two types of insurers in India:
a) Centralized Public Sector Undertakings (CPSUs): These are government-owned insurance companies like New India Assurance, Oriental Insurance etc. The premiums are usually low but the claim settlements can be delayed.
b) Private Insurers: These are private companies like ICICI Lombard, Bajaj Allianz, Tata AIG etc. The premiums are higher than those of CPSUs but the claim settlements are faster and more reliable.
You should choose a private insurer because they have better service and faster claim settlements than CPSUs.
The Waiting Period Clause:
Now that you have chosen an insurer, you need to decide on the waiting period. The waiting period is the number of days that your policy will be valid from the date of purchase. The longer the waiting period, the lower your premium will be. But if you choose a longer waiting period, there is a chance that you might not get any benefits from your policy because you may die before it becomes valid.
4) Choose a Policy Term:
Now that you have chosen an insurer and a waiting period, it is time to choose the policy term. The policy term is the number of years for which your insurance will be valid. You should choose a long-term because this gives you more flexibility in case something happens and also lowers your premium.
5) Choose an Option:
Now that we have covered all of the basics, it is time to choose one option from each of these three categories:
a) Family floater: A family floater covers all members of your family including your spouse and children under one single insurance plan at a low premium.
b) Critical Illness Cover: Critical illness cover pays out a lump sum amount in case any member of your family suffers from any critical illness like a heart attack or cancer etc.
c) Hospital Cashback: Hospital cashback covers all medical expenses incurred at hospitals during treatment for critical illnesses like cancer etc and pays out lump sum amount when hospitalization is required.
d) Personal Accident Cover: Personal accident cover pays out a lump sum amount in case you suffer from an injury or death due to an accident.
e) Critical Illness and Personal Accident Cover: This is the best option as it covers all critical illnesses and accidental injuries under one single policy at a low premium.
f) Term Insurance: Term insurance covers you for a specific period of time that you choose (policy term). It is cheaper than other options but provides limited coverage and is not renewable, which means that it will expire after the policy term expires. If your family has no major health issues, this might be the right option for you.
g) Whole Life Insurance: Whole life insurance provides complete coverage for your family throughout their lifetime (renewable). It offers complete protection against any major health issues and accidental injuries at a slightly higher premium than term insurance but it does not cover critical illnesses like cancer etc. It can be used as an investment tool as well because of its high liquidity feature (you can withdraw money from your policy).
Cashless Hospitalization Benefits:
In addition to the above, you should also opt for cashless hospitalization benefits. This covers all medical expenses incurred during treatment at hospitals and pays out a lump sum amount when hospitalization is required. This is an optional benefit. If you have opted for a health insurance policy, you should definitely opt for the cashless hospitalization benefit.
Critical Illness Coverage:
Another optional coverage that you can opt for is critical illness coverage. This covers serious illnesses like cancer, heart attack etc. It pays out a lump sum amount when the illness is diagnosed and also provides income protection if you are unable to work due to the illness. This is an optional benefit and will cost an additional premium over your basic health insurance policy.
Income Protection:
Another optional benefit that you can opt for is income protection (also called disability cover). This provides income replacement in case of accidental injuries or serious illnesses that make it difficult for you to work (for example, cancer). It pays out a lump sum amount in addition to your regular salary when you are unable to work due to a covered accident or illness. It is an optional benefit and will cost an additional premium over your basic health insurance policy.
6) Choose a Mode of Payment:
You can choose to pay your premiums in one of the following modes:
a) Single premium payment: In this mode, you will have to pay the entire premium amount at once at the time of purchasing your insurance.
b) Installment payment: In this mode, you will have to pay your premiums in installments along with interest charges. The interest rates are usually very high so it is better to avoid this option if possible. It is best to choose either single or multiple premium payments depending on your financial situation and convenience.
No-Claim-Bonus/No-Claim-Discount:
If you have been paying your premiums on time and have not made any claims against your health insurance policy, you will be eligible for a discount on your premium. This is called the no-claim-bonus or no-claim-discount. The amount of discount depends on the number of years that you have paid premiums without making any claims. Usually, this discount is given in the form of a rebate that is credited to your account at the end of each year.
You can use this rebate to pay your future premium installments. The discount is usually given for the first two years and then the discount rate is reduced by 10-15% every year after that. Insurance companies may also offer additional discounts if you are a senior citizen or if you have taken a health checkup recently.
Waiting Period:
If you claim your health insurance policy, there will be a waiting period before your insurance company starts paying the claim amount. This is called the waiting period and it varies from one insurance company to another. Usually, the waiting period is one year but it can be longer in certain cases. For example, if you have an existing medical condition when you purchase your policy, there will be a higher waiting period before your claim is paid out by your insurer. The longer the waiting period, the lower will be your premium amount as well as the no-claim-bonus/discount amount.
Pre-Existing Medical Condition:
If you have an existing medical condition when you purchase a new health insurance policy, there will be a higher waiting period before your claim is paid out by your insurer. This means that even if you are not making any claims against your health insurance policy, there could still be some delay in getting paid out because of this pre-existing medical condition clause in most policies. This can sometimes lead to situations where people who do not have pre-existing medical conditions are getting paid out faster than those who do.
7) Purchase Your Policy and Enjoy Life!
That’s it! Now all you need to do is purchase your policy and enjoy life without any worries about medical expenses or critical illness cover etc. Once you purchase a policy, make sure that you keep renewing it every year because if you don’t then your insurance will be canceled automatically after a certain period.
