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 in lump sum or installments. Health insurance usually provides either direct payment or reimbursement for expenses associated with illnesses and injuries. The cost and range of protection your health insurance provides will depend on your insurance provider and the particular policy you purchase.
Why do you need health insurance?
Think briefly about the enormous medical costs 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 can’t predict the future.
The escalating cost of medical treatment today is beyond the commoner’s reach. Research indicates that life expectancy at 50 will likely increase from 8 years in 1971 to 18 years by 2021. The rising cost of health care and increasing life span will cause the working class’s current generation to think about a prudent mix of investment and risk covers to meet future challenges.
Still not convinced? Well, it also provides you with tax benefits. Section 80D 2A of the Income Tax Act allows you to deduct up to Rs. 15,000 per annum for the premium paid to service a medical insurance policy for you and your family. If you also pay for your parent’s medical insurance premium, you get an additional deduction under section 80D 2B up to Rs. 15,000 per annum. If your parents are senior citizens (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 consider health insurance a necessity rather than a tax-saving possibility.
What do 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 essential to know what your policy covers and what you must pay from your pocket.
Health Insurance policies generally cover boarding, nursing, and diagnostic expenses, including room rent charged at the hospital or nursing home, surgeon, anesthetist, doctor fees, etc. Some policies even offer a 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 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 an accident. Treatment of certain diseases is not covered during the first year of your policy. The list of conditions may vary from one health policy to another.
Popular health insurance product “Mediclaim,” offered by four subsidiaries of GIC, does not cover the costs of acquiring spectacles, contact lenses, or hearing aids. Expenses on dental treatment or surgery are also not covered unless requiring hospitalization. Payments on treating situations arising from or traceable to pregnancy or childbirth, treatment of AIDS, and naturopathic medicine are not covered.
Under Mediclaim, hospitalization coverage is subject to a minimum of 24 hours except in 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 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 ten in-patient beds in class “C” cities. Fully qualified nursing staff must be under their employment around the clock. Lastly, it should have a fully equipped operation theater.
When to get health insurance?
Normally you can take medical insurance at any time. The age limit is from 5 to 75 years. Even at 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.