Health is wealth indeed. But one hardly thinks of insuring oneself against possible illness until it is too late. Health insurance is a necessity in today’s world. The cost of medical care and treatment has soared to new heights in recent years and is expected to rise even further in the years to come.
What is health insurance?
Simply put, health insurance is protection against medical costs. Non-life insurance companies offer health insurance. However, it can be bought as an additional benefit rider with your life insurance policy but has some limitations. Depending on your policy, your premium may be payable either in lump sum or in installments. Health insurance usually provides either direct payment or reimbursement for expenses associated with illnesses and injuries. The cost and range of protection provided by your health insurance will depend on your insurance provider and the particular policy you purchase.
Why do you need health insurance?
Think for a moment about the enormous medical costs that you would incur if you suffered a major injury tomorrow or were suddenly stricken with a life-threatening illness. Uninsured people live with such risk every day of their lives; health insurance can shield you from that risk. Even if you’re healthy today and have never had any major problems in the past, you simply can’t predict the future.
The escalating cost of medical treatment today is beyond the reach of common man. Research indicates that life expectancy at 50 is likely to go up from 8 years in 1971 to 18 years by 2021. Rising cost of health care and increasing life span will cause the current generation of working class to think about a prudent mix of investment and risk covers to meet future challenges.
In case of a medical emergency, cost of hospital room, the doctor’s fees, medicines and related health services can work out to be a huge sum. In such times, health insurance provides much-needed financial relief.
Still, not convinced? Well, it also provides you with tax benefits. Section 80D 2A of Income Tax Act allows you a deduction up to Rs. 15,000 per annum for the premium paid to service a medical insurance policy for you and your family. If you are also paying for the medical insurance premium of your parents, you get an additional deduction under section 80D 2B up to Rs. 15,000 per annum. If your parents are senior citizen (i.e., attained 65 years of age), this additional deduction limit is raised to Rs. 20,000. It is a great tax saving option and can play wonders. However, one should look upon health insurance as a necessity rather than as a tax saving option.
What you need to know about Health insurance?
You should understand the policy, and become familiar with common health insurance provisions, including limitations, exclusions, and riders. It’s very important to know what your policy covers, and what you will have to pay from your own pocket.
Health Insurance policies generally cover boarding, nursing and diagnostic expenses, which include room rent charged at the hospital or nursing home, fees of the surgeon, anesthetist, doctor, etc. Some policies even offer fixed cash amount for each day you stay at any hospital for treatment. Once out of the hospital, your expenditure on further treatment over 60 days may also be covered.
If you have a persistent health problem and then decide to take insurance, it might not be covered. Expenses on hospitalization, incurred in the first 30 days after taking a policy are also not entitled, except in case of an injury from accident. Treatment of certain diseases is not covered during the first year of your policy. The list of diseases may vary from one health policy to another.
Popular health insurance product “Mediclaim” offered by four subsidiaries of GIC does not cover costs of acquiring spectacles, contact lenses or hearing aids. Expenses on dental treatment or surgery of any kind are also not covered unless requiring hospitalization. Expenses on treatment of situations arising from or traceable to pregnancy or childbirth, treatment of AIDS and naturopathic treatment too are not covered.
Under Mediclaim, coverage of hospitalization is subject to a minimum of 24 hours except in case of dialysis, chemotherapy, radiotherapy, eye surgery, dental surgery, lithotripsy, tonsillectomy; D & C taken in the hospital and the insured is discharged on the same day.
You do not need to be treated in any particular hospital to be eligible for the cover. However, the hospital you choose must satisfy some conditions. Firstly, it should have at least 15 in-patient beds for ‘A’ & ‘B’ class cities and 10 in-patient beds in class “C” cities. Fully qualified nursing staff must be under its employment, round the clock. Lastly, it should have a fully equipped operation theater.
When to get health insurance?
Normally you can take a medical insurance any time. The age limit is from 5 to 75 years. Even at the age of 60, you can get a policy for the next 15 years. But you can’t insure yourself against any disease you already have. And it gets costlier with age.