Importance of Health Insurance Plans: A Complete Guide

Sonal Pruthi

12 Feb, 2021

The article speaks about the importance of health insurance plans.  Securing a health insurance plan is crucial during these days. Hefty medical bills require individuals to take different health insurance plans.

We have been working continuously for our financial Stability, and so our health is compromised in between. From investments to savings, we have to carefully manage our finances to be closer to our sustainable living goals. The problematic health situation can be a pinch on finances. Health insurance is a smart way to deal with financial emergencies without touching our savings.

Importance of Health Insurance Plans

1. Financial Stability– The cost of quality healthcare services has been increasing. To understand this, consider data from last few years’ financial years of 2014 to 2019, where the number of lives covered for health insurance schemes is 472 million people across India. The Health Insurance coverage stands at 35% in 2018. This shows the rising need for health insurance plans.

The health insurance plans are customizable according to the prevailing health conditions of the customer. It helps in covering your extra expenses, for quality health care services.

2. Rising Modern Lifestyle– The lifestyle comparatively of an average urban people have changed. This way, it has impacted the importance of health insurance. Severe health conditions like Blood Pressure or Blood Sugar or Heart Attacks are all stress-related diseases, which have become common. This can be cured as modern science has grown so fast and health insurance plans are essential to managing their finances.
3. Tax Saving– The government has introduced benefits of taking health insurance plans. It reduces the burden of premium borne every month by the individual on their income sources. The benefits are given under section 80D of the Income Tax Act, 1961. Here, you can claim the deduction of up to Rs. 25,000 for the individuals and senior citizens when the health insurance premium is paid. A tax deduction up to Rs. 50,000 is allowed. Tax saving is an added advantage to the citizens.
4. Multiple Policies-Insurance companies understand the importance of health insurance and customer needs in society. They have introduced multiple health insurance policies. They have come up with different plans for customers according to their needs. Considering the conditions, the premiums have not been high. The claim filing process has been simplified.

Important Check Points knowing the Importance of Health Insurance Plans

Before you undertake the plan, it is essential to understand the importance of health insurance plans:

1. Important to understand about your health conditions and policies that you has to undertake.
2. Do not wait for getting sick to opt for the health insurance plan.
3. The lesser number of health issues you have, the better health insurance policy you can undertake.
4. All policies are not the same and are not on equal footing. The policies give different coverage, some include terminal illness and while some may not. Give a careful reading to the policy opted.
5. Don’t agree on the policy on verbal communication. Well, understand the terms and conditions carefully attached to it. Acceptance must be considered only on the written document which is signed.
6. Consider settlement Ratio. It means the amount paid by the company against the claims which have been made. Higher is the settlement ratio, and faster is the settlement time.
7. Inflation Index calculated-The inflation has to be kept in mind while opting the policy. The plan that might seem attractive today might cost your pocket heavily in the near future. Consider the inflation rate for next twenty years.
8. Consider the co-payment policy-this means, where the policyholder has a pre determined amount or percentage of the claim as fixed and rest the insurer bears it. Compare the policies and choose the policy which is least paying for the insured.
9. No reliance on employee insurance only. The employee is dependent on the coverage of the employer and its budget, which might be less.
10.  Don’t wait till 45 Years– A health insurance plan can also be taken soon in your life. As the health insurance companies do not provide plans to people who are old.
11.  Hospitalization charges– Whenever the policyholder chooses the higher standard, then he may to have to shell out the additional room rent.
12. Family coverage policy– The individual has to ascertain the importance of the family coverage policy and the risk associated with it. Understand what is covered in it, and what age difference will affect the most.
13. Cashless facilities– Check for the cashless facilities. This will allow you to receive treatment in the hospital registered with the health insurance companies, without paying bills upfront. The company should have a vast network of plans, which are useful in emergency. 
14. Pick with lowest insurance premium plan.

Conclusion

It can be concluded that growing concern for the importance of health insurance has taken a reform in IRDAI legislation. The reform has impacted the IRDA Insurance license holders to bring the change in health insurance plans accordingly. The impact is prominent on Insurance Companies. Insurance companies introduced the policy after the issue of guidelines in 2016- IRDA (Health Insurance Regulations) 2016. The government is also sponsoring various plans under Ayushman India.  In the past, the government was regulating mediclaim or health insurance plans through National health Insurance plans. To benefit society tax saving schemes has been introduced under the Income Tax Act, 1961. Underlying importance is that with the changing needs, health insurance stands equally essential.

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