Medical insurance is an agreement where insurance companies agree to take a guarantee of compensation for expenses of medical care in case the insured falls to ills or meets with an accident that leads to hospitalization. Normally, insurance companies have a connection with the hospitals, so they can provide cashless treatments to the insured person. That’s why medical insurance is important.
The government also promotes medical insurance by providing a deduction from the income tax. Purchasing medical insurance for your family and yourself is important because medical care is expensive, especially in the private sector hospital. And hospitalization that leads to a burn hole in your pocket and derails your finances. So, that’s why medical insurance is important.
Have you ever thought about it? That the person in your family who brings money is now in a hospital bed at that time it’s so tough to manage every finance. All this can be avoided if you have medical insurance. So, that’s why medical insurance is important. Usually, The sum assured for the medical insurance plan doesn’t exceed 5 lakh rupees. Here, in this article, we were going to know some benefits of having medical insurance.
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What Is Health Insurance?
Basically, health insurance is a way of paying for your medical bills and health care costs. Most people can’t pay for all their health care out-of-pocket, and just put it on a debit or credit card.
Health insurance can make it easier to pay your health care bills, and help you get the care you need.
Different Kinds of Health Insurance: Private and Government-run
There are many different kinds of health insurance plans. Some plans are run by the government. For example, you’ve probably heard of Medicare and Medicaid, which are government-run:
- Medicare – health insurance for people age 65 and over, as well as some people under age 65 with a disability.
- Medicaid – health insurance for people with a low income.
There are also private health insurance plans. Many people get private health insurance from their employer, and self-employed individuals often purchase private health insurance, too. With private health insurance plans, you typically pay the health insurer a monthly premium; with government-run health insurance, there often is no monthly premium.
How Health Insurance Works
When you have health insurance, your medical bills go first to your health insurance plan. Then, they pay for some or all of that bill according to the plan’s details.
In a way, health insurance is a lot like car insurance. If your car is in a bad accident and needs a lot of work to repair it – or maybe it needs to be replaced entirely with a new car – car insurance picks up some or all of the cost. And that’s good, because the cost of fixing or replacing your car could easily be more than you have in your bank account.
But, unlike car insurance, health insurance covers far more than just the costs from a bad accident. Health insurance often covers things like annual checkups, vaccinations, preventive health and other “routine maintenance” for your body and mind. It’s like if car insurance helped pay for oil changes and tire rotations.
Why Should I Get Health Insurance?
Broadly, there are two reasons to have health insurance:
- Health insurance supports you if you get sick
- Health insurance helps you avoid getting sick to begin with
Let’s look at each of these reasons in more detail:
Health Insurance as a Safety Net
It’s important to have health insurance as a safety net. If you unexpectedly get sick or injured, health insurance is there to help cover costs that you likely can’t afford to pay on your own.
Health care can be very expensive. It can be an enormous financial burden. Surgery, emergency care, prescription drugs, lab work, scans and examinations – these sorts of costs can add up very quickly. They can even be high enough to cause individuals to go bankrupt, or to turn down care that they need but can’t afford out-of-pocket.
But, with health insurance, you’re not facing those costs as an individual; there’s an insurance plan helping you cover the costs, and helping you navigate the confusion of medical billing.
Let’s face it, medical bills aren’t the sort of thing you want to be dealing with while ill, injured, in a hospital bed or the emergency room. It’s smart to make difficult financial decisions ahead of time, by getting health insurance before you get sick.
The other reason it’s important to have health insurance is that it makes it easier for you to keep from getting sick in the first place.
Having health insurance makes it easier for you to access – that is, find and pay for – routine and preventive health care. This includes:
- Annual checkups
- Vaccinations (flu shots, MMR, etc.)
- Blood tests and lab work
- Scans and screenings
These all play a role in keeping you healthy, and diagnosing any illness you might have as soon as possible.
More, health insurance helps cover the costs of managing any chronic conditions you might have, such as diabetes, heart disease or depression. Health insurers typically offer disease management programs for these kinds of conditions. They can also point you to specialists and other resources that can help. That makes it easier for you to keep on top of everything and stay healthy.
Routine and preventive care is especially important where children are concerned. Kids, infants and pregnant mothers all need regular medical care to keep them healthy and thriving. Early intervention prevents problems down the road, and can even save lives.
And it isn’t just about physical health: health insurance typically covers mental and behavioral health care, as well.
Can I Afford Health Insurance?
To sign up for a private health insurance plan, you typically have to pay a monthly premium. It’s far more likely that you can afford health insurance than that you can afford to pay for a surgery, illness or emergency room visit out of your own pocket.
Private health insurers usually offer a variety of plans with different premiums in order to reach a wide range of income levels.
If you can’t afford a private health insurance plan, you might be eligible for a government health insurance plan, such as Medicaid or Medicare. Or you might be eligible for subsidies (i.e., financial support) on the healthcare.gov Health Insurance Marketplace.
Health insurance doesn’t cover everything, though. Apart from paying your monthly premium, there are several forms of cost-sharing in most insurance plans. We’ll go over them below and explain how they work.
First there’s the deductible, which is the amount of health care costs you have to pay for before the insurance plan starts sharing those costs. So, if your plan’s deductible is $1,000, then you have to cover the first $1,000 of medical costs before your health insurance plan begins picking up its share of the bill.
Insurance plans often have you pay a copay when you see a doctor. There can also be a coinsurance arrangement where, for example, you pay 20% for some medical bills and the insurance plan picks up the other 80%. Co pays and coinsurance typically come into play after you’ve met your deductible (though sometimes they’re at work even before you’ve spent that amount).
Finally, there is the out-of-pocket maximum (or maximum out-of-pocket). That’s the amount of money that, once you’ve spent it on health care costs in any year, the health insurance plan pays for 100% percent of your health care bills. All you pay is your monthly premium.
Here’s an example of how it works with numbers plugged in. We’ll call it the “Ten Plan”, and keep the number simple.
Ten Plan (example)
- $10 Copay (after deductible met)
- 10% Coinsurance (after deductible met)
- $1,000 Deductible
- $10,000 Out-of-pocket maximum
So, in the Ten Plan, apart from paying your monthly premium, you’re going to pay out of pocket for the first $1,000 of your health care costs (i.e., your deductible). That includes doctor visits, lab work, x-rays, surgery, physical therapy, everything. After that, though, you’ll only pay $10 per doctor visit, and only pay 10% of other health care costs.
And, if you wind up spending $10,000 altogether in a given year, your health insurance plan picks up the cost of everything for the rest of the year. All you pay is your monthly premium.
What If I Don’t Get Sick? Don’t I Lose Money?
You might be wondering, “If I sign up for health insurance, pay my monthly premium, but I don’t get sick and don’t get any health care, then I’ve lost money.”
That’s not quite right, though.
First, there are many health insurance benefits you can use even without getting sick, such as vaccinations and check-ups, that help keep you healthy over the long run.
Second, even if you don’t get into an accident, have large health care costs, or need to use your health insurance benefits, you still get the peace of mind of knowing that, if you had gotten sick, you wouldn’t be facing all those medical costs on your own.
Last, even when you don’t use your own health insurance benefits, your premiums go to pay for the benefits and health care of others on your plan. And, some day, when you do get sick and need help paying your medical bills, the others on your plan will help you in the same way.
7 Benefits of having Medical Insurance.
A good medical insurance policy would normally cover expenses that are made towards doctor consultation fees, charges of the ambulance, costs of hospitalization, medical tests charges, and even post-hospitalization recovery expenses to a certain extent. Now, let’s know the 7 benefits of having medical insurance.
- Medical checkup: Medical insurance policy provides options for medical checkups. A free medical checkup is also provided by some insurers based on your no-claim bonus (NCBs).
- NCB (No claim bonus): NCB is nothing but a bonus element that is only paid to the insured if the insured does not file a claim for any services or treatments in the previous year.
- Cashless treatment: being an insured person, you can get cashless treatments as your insurance company would work with connections within various networks of hospitals.
- Post and pre-hospitalization cost coverage: medical insurance policy can also cover post and pre-hospitalization charges up to the period of 60 days, depending on the buying medical insurance plans.
- Prices of transportation: medical insurance policy also covers the amount that is paid to ambulances towards the insured transportation.
- Rent of a room: your medical insurance policy may also cover the rent of room expenses depending on the premium that is paid by the insured.
- Tax advantages: medical insurance premium paid also covers the tax-deductible.
Medical emergencies are sudden and can cause financial issues immediately. One may have to put in all their savings or sell their belongings to pay for treatment. A medical insurance plan can give stability by covering such expenses and give one the opportunity to priorities their expenditures.
Choice of insurance
One can select an insurance plan based on their medical history, family history, age, gender, and requirement. Many people get medical insurance for parents, and some opt for floater family medical insurance. One should clearly understand all the aspects of their medical insurance and clear their doubts before choosing a policy.
Many insurance companies are associated with hospitals for cashless insurance payments. Cashless payment is one of the most important benefits of any medical insurance. When one requires urgent medical attention, their family doesn’t have to run around looking for cash. The insurance company can bear all the hospital expenses incurred, even when the patient is actively getting treatment.
One tends to compromise on treatment when money is an issue. With the ability to pay using family medical insurance or any other policy, one can choose the best doctors, medical facilities, and treatment options.
Remember, the benefits or advantages of medical insurance can vary from one insurance company to another so be careful with these insurance companies. Now, as we read above the benefits and advantages of medical insurance. Now, let’s know about the types of medical insurance that you should know about.
Types of medical insurance
Medical insurance covers hospitalization expenses, treatment expenses that are due to an accident, and other specific diseases. Usually, it comes with the pre-decided sum assured. Medical insurance policies premium is formulated the proposer’s age, location, gender, and the duration that is opted of the insurance preferred plan. Remember, medical insurance doesn’t offer any add-on coverage.
Medical insurance plans are processed in the form of reimbursement as well as cashless treatment. Insurance plans can be purchased on an individual as well as for family floater-based. A family floater policy plan, covers self, dependent children, spouse, and the dependent parents.
There is no flexibility in medical insurance when it comes to coverage. The features of medical insurance vary from insurance provider to insurance provider. Usually, different medical insurance providers provide different-different medical insurance coverage. As we got the importance of medical insurance above. Now, let’s discuss the types of medical insurance you need to know.
Family medical insurance
Under this family medical insurance policy, an individual can include all the family members he or she has against various diseases under a single cover. Family medical insurance plans offer you a fixed sum assured for the family members, which can be availed by all the family members or any one of the individuals from the family member.
Individual medical insurance
Individual medical insurance is only for the individual person not for the whole family. This medical insurance policy covers the medical expenses and hospitalization expenses of individuals who have taken the policy. Under this policy, the premium is determined as per the age of the insured.
Personal accident medical insurance
This policy covers all the expenses of medical care such as hospitalization expenses in the event of an accident. And the premium amount is depending on the amount of cover taken by the insured.
Senior Citizen medical insurance plan
Senior citizen medical insurance plan is designed especially for senior citizens or individuals over 60 years of age that offer protection from health issues during old age.
Surgery or critical illness insurance policy
Surgery or critical illness insurance policy is suitable for the insurer that requires treatment on a critical illness such as paralysis, heart attack, cancer, and kidney failure, etc. As we know, the medical treatments of all these treatments are very high, the premium applicable to all these types of policies is also high. Critical illness may be or may not be provided in the medical insurance. So, do clear it with your agent or insurance company.
Maternity medical insurance plan.
Maternity medical insurance policy covers costs, including postnatal and pre-care, child delivery expenses of new born babies. It also covers the newborn up to a certain period of time mentioned in the policy plan. Even ambulance costs will also be covered.
Unit linked medical insurance:
Unit linked medical insurance policy provides a unique combination of insurance and savings both at the same time. This insurance policy helps you in building a corpus that can be availed to meet these expenses which are not c
It’s not easy to get the right medical insurance policy you need. As we know, all insurance companies provide similar medical insurance policies but not the same. Hence, here are some of the important points you should consider at the time of finding the right medical insurance you need, that suits all the conditions. So, let’s get started. Firstly, you should know the sum assured by the insurance you chose.
After that, the minimum entry age and renew ability clause that you should know about before having a plan. Then. the room rent capping, inclusion, and exclusion, and last but not least no claim bonus or other benefits. Do read 2 to 3 times your insurance papers before getting it started. Be Careful, from the fraudsters. Do not choose those companies whom no one knows about, always choose the popular companies.
After choosing the right medical insurance they will ask you for some documents such as an age proof document, an identity proof, an address proof and some plans that require a medical check-up, and lastly a passport size photo of the insured one.
As we know, no one knows what is going to happen in the future. Any disastrous moments can come anytime in your life to ruin your life. Maybe the person who brings money can get hospitalized. So, to not get stuck with those unexpected moments, medical insurance is important. At that moment, we realized why medical insurance is important. Nowadays in this covid situation, we get to know the importance of medical insurance. I hope you get all the information you need to know. All the best.
Frequently Asked Questions
Which are the network hospitals in your vicinity?
Ans. To avail a cashless settlement of your claim, you should be admitted in a network hospital. A company has a list of such hospitals and you need to find out whether the hospital in the company’s network is your preferred choice of hospital and/or located in your area.
Is my policy valid PAN India?
Ans. This is one of the most important health insurance questions to be considered because medical emergencies may arise anywhere. Usually, health plans cover treatments anywhere in India but you should make sure of this clause. Find out whether the claim settlement in your policy has any geographical limitations or not. There are some medical insurance plans that offer international coverage too.
Will I get covered for my pre-existing illnesses?
Ans. Every insurer excludes coverage on the pre-existing illnesses for certain tenure at the starting of the policy. You need to find out what this waiting period for your pre-existing illness is and how soon you can be covered for your pre-existing illnesses. Basically, you need to understand whether your pre existing condition is temporarily not covered or is it completely excluded from the scope of coverage.
Whom do I call at the time of an emergency hospitalization?
Ans. An emergency situation involves a lot of stress and you don’t need the additional burden of finding out the claim settlement process. If your policy facilitates cashless settlement of claims, find out the policy of emergency hospitalization. Ask about the documentation and, most importantly, whom to contact at the time of such emergency hospitalization. Good brokers have a customer service desk or a specifically appointed representative who would help at the time of claim.
What to do if I am admitted to a non-network hospital?
Ans. In an emergency situation, you might be admitted in a non-network hospital and knowing the claim protocol at that time is imperative. Always remember that treatment in a non-network hospital would be on a reimbursement basis only where you would have to shoulder the medical bills and then get them reimbursed from your insurer. So find out the reimbursement process, the documents required in this case, and the deadline for informing the insurance company, etc. for this situation.
What are the documents required for claiming?
Ans. This is one of the most common health insurance queries, and knowing the answer from the get-go makes the claims process much smoother. Essentially the company asks for the identity proof of the members covered, the health card, the hospital bills, etc. at the time of a claim. A pre-authorization form is required in case of cashless claims which are to be submitted to the TPA. Other documents might also be required and you should have the knowledge of the required documents so that you can get your claim processed smoothly.
What is the method of claim processing followed by the company?
Ans. The claim settlement process is the true test of your health plan. You should ask about the company’s claim settlement process to assess whether the process is simple or ambiguous. Moreover, take special care to notice whether the company settles the claims through a cashless facility or by reimbursement. A cashless facility is your best bet to avoid any financial burden of medical bills.