What Is Health Insurance? Unveiling The Basics

Introduction

Ashish was a young and healthy person who enjoyed a very happy life. Then, one day, a searing pain in his stomach brought his carefree world crashing down. Hours later, doubled over in agony, a doctor confirmed – he needed appendix surgery. He had to spend 3 days at the hospital, and the recovery period was at least 4 weeks. Medical bills, time off work, and unexpected disruptions were overwhelming.

But Ashish was not all alone. His health insurance became his safety net, quietly taking over the unexpected medical bills of ₹66,000. He focused on healing while his health insurance handled the financial burden, without him paying anything from his pocket. 

That is the power of health insurance. It protects your savings, covers medical expenses, and guarantees peace of mind during unexpected emergencies.

Unfortunately, only 37%^[1] of Indians have adequate health coverage, including private, corporate, and government-sponsored health coverage. Most people are unaware of what government schemes they are covered under. Further, those who are aware, realise that the cover provided is menial and won’t help much in critical illness. Don’t be one of those walking the tightrope of medical bills, praying that you won’t stumble.

In this blog, let’s try to understand health insurance, its types, and why you need it. 

What Is Health Insurance?

Think of your health insurance as a financial umbrella, shielding you from the rain of medical bills. When you are ill, injured, or sick and need treatment for your condition, your insurance provider will pay for the medical expenses so you can access the best healthcare services without worrying about the cost aspect. There are two types of health insurance coverage:

• Cashless Claims – All you need to do is get admitted to a hospital, inform your insurer about the incident, and care for yourself. Your insurer will pay all your medical expenses.
• Reimbursement Claims – This is where you will pay the bills out of your pocket first. Then, you approach your insurer, and they will reimburse the costs.

Of course, not having to pay anything at all is better! However, it is essential to note that cashless treatments are available only at the insurer’s network hospitals you sign up for. 

Let’s understand this better with an example.

Rohit and Ayush decided to get health insurance together. When purchasing one, Rohit opted for insurer A, and Ayush chose insurer B.

Six months down the line, while on a trip, they both met with an accident and were admitted to the hospital. Rohit’s insurer had that hospital in its network. Hence, he could avail of the cashless treatment. On the other hand, Ayush had to pay a bill of ₹10,000 since his insurer did not have that hospital in its network. He had to arrange that amount on the spot, secure the bills and prescriptions himself, and submit them to the insurer when he returned home.

This concludes that it is essential to check the network hospitals of the insurer you buy insurance from.

Why Do You Need Health Insurance?

So, what is the importance of health insurance? Let’s discuss that with the following pointers:

• Zero Stress Before Medical Treatment – During medical emergencies, the first thing that strikes many people’s minds is the cost involved and how it will drill a hole in their pockets. Health insurance ensures you focus on getting the best possible treatment and recovery without worrying about medical bills.
• Protect Your Savings – Every penny you save is for a secure financial future. Your health insurance ensures you don’t need to touch your savings to pay your medical bills.
• Access Best Healthcare – Due to a modern lifestyle, you may be vulnerable to accidents and critical illnesses such as cancer, heart attack, etc. Health insurance ensures the best healthcare access and best healthcare services without worrying about its cost. 

• Protecting Your Loved Ones – If you want to protect your entire family with health insurance, family floater health insurance plans offer that flexibility. This ensures you stay at peace, knowing you are covering for your family too.
• Beat The Tax – You can claim a deduction of up to ₹25,000^[2] based on your insurance premium under Section 80D of the Income Tax Act. If you are paying a for your parents, you can claim even more.

Types Of Health Insurance

Picking the right insurance type is scary because you can’t anticipate what illness will affect you. Worry not! We shed light on different types of plans.

• Individual Health Plans – Focus on your health with an individual health insurance plan. Premiums are tailor-made for your age and health.
• Family Health Insurance Plans – Cover your dependents under a single policy. Pay a single premium and claim to cover the medical bills of anyone covered by the policy.
• Senior Citizen Health Insurance Plans – Got elderly parents? You can take plans that cover their unique medical needs like physiotherapy, elderly care, etc.
• Surgery And Critical Illness Insurance Plans – These plans are designed to meet the scariest health concerns. Although premiums may be higher, remember that bills can be even higher, and you need protection.

• Maternity Health Insurance Plans – Do you have a kid on the way? Handle medical expenses – prenatal, delivery, and postnatal care easily. This plan also covers your little one’s initial treatments and vaccination expenses. 
• Personal Accident Plans – A safety net will protect you when you get injured in an accident.

Key Takeaways

Remember, your health insurance will always be an invisible shield, deflecting unexpected medical bill missiles. Live your life to the fullest and ensure peace of mind for everyone in your family. Invest in yourself with the right plan and secure your finances against medical emergencies. With platforms such as PhonePe, managing your health insurance becomes even simpler.