Health Insurance Plans & Policy - Key Concepts

What is health insurance?
A health insurance policy will provide a cover to you and your family against sudden medical contingency or bodily injury.

Why health insurance?
Every human being is exposed to various health hazards.
- Medical emergency can strike anyone without pre-warning.
- Inadequate facilities in government hospitals
- Private hospitals are too expensive
- Medicines have become quiet expensive
- Diagnostic charges are beyond common man’s reach
- Specialists come at a price
- Tax benefit under section 80 D of the Income Tax Act

Health risk is a personal risk, which could arise from various factors viz.
a) Physical condition
b) Psychological condition
c) Accident related
d) Occupational related
e) Environment related
f) Life style related
g) Travel related

What is the kind of medical emergency that can strike?
A medical emergency can be:
- Medical illness
- Injury / Accident
- Major illness
- Critical illness
- Chronic illness
- Untreatable
- Terminal

What impact will a medical emergency have on you and your family?
A medical emergency can
- Burn a hole in your pocket
- Immediate need for medical aid
- Loss of quality life
- Loss of career options/Income
- Disruption in home life
- Mental trauma and incapacitation

What does a standard insurance policy cover?
A standard health insurance covers :
- Room and boarding expenses provided by the hospital
- Nursing expenses
- Diagnostic and medicine expenses
- Surgeon, Anesthetist, Medical Practitioner, Consultants, Specialist fees
- Anesthesia, blood, oxygen, operation theater expenses, cost of surgical appliances, medicines and drugs and similar expenses
- Pre-hospitalization and post hospitalization expenses subject to conditions and limits .

What are the benefits of buying health insurance plans at a young age?
Health insurance premium tends to increase with age - more the age, higher the premium. You can be covered for medical conditions that may be diagnosed over the years provided there is no break in the policy. In addition, each `no claim’ year would fetch you a discount on your premium or an increase in your sum insured amount at no extra cost. The treatment in case of ‘no-claim’ bonus varies from company to company. Lastly, income tax benefit under Section 80 D of the Income Tax Act.

How is premium determined?
Premium depends on several factors viz.
- Your age
- Amount of coverage required
- Number of family members covered
- Other additional benefits
- Your health condition
- Your income/earning

How does health policy differ vis-à-vis a life insurance policy?
The health insurance plan is more comprehensive in its coverage. All expenses involved in hospitalization fall under its purview. Life insurers usually cover critical illness and hospital cash extensions (only room rent charges) on life policies, which do not include doctor’s fees, expenses incurred on buying medicine and surgery costs etc.

Why is it important to disclose health details when I buy a policy?
Mention of details is critical since insurance companies assess the policyholder’s risk profile on the basis of his/her health. An insurance contract works on the principal of "utmost good faith", which implies that information furnished by a policyholder is true and correct. Moreover, non-disclosure can also lead to rejection of a claim.