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Insurance Article

Key concepts of Health Insurance

June 24 2008

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 theatre expenses, cost of surgical appliances, medicines and drugs and similar expenses
Pre-hospitalisation and post hospitalization expenses subject to conditions and limits .
 
What are the benefits of buying health insurance 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 a 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.

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