Health insurance is a financial shield that safeguards you and your loved ones during medical emergencies and hospitalization. A health insurance plan will pay for any medical costs you or your family may incur due to illness, injuries, or accidents.
A health insurance policy is a contract between you (insured) and the medicare insurance company (insurer). It means the insurer will cover all or a portion of your medical costs in exchange for a fixed fee (premium).
The insurer usually pays for your medical bills in one of two ways – a cashless treatment where payments are made by the insurance company directly to the hospital. Another is where you initially pay for your medical bills and later get reimbursed from the insurance provider.
Why Do You Need Health Insurance?
Due to advances in medical research and innovative technologies, treatments or palliative care are now readily available for almost all ailments. However, these treatments are not accessible to all. An unexpected medical emergency can occur at any time. Healthcare cost is rising faster than medical inflation. Some people deplete their life savings, take out expensive loans, or sell off their assets to pay for treatment.
Buying the best health insurance policy for you and your family will shield you from this financial hit to your life savings and act as a cushion against the shock of medical inflation. It gives you the much-needed buffer to pay for medical treatments, tests, medications, and other procedures.
Types of Health Insurance Policies:
There are many health insurers in India offering different types of health insurance plans on the market. However, you must choose one of the best health insurance plans in Canada. To do that, you must first know the different types of plans that are available.
1) Individual plan: The plan provides coverage on an individual basis. Under this type of plan, you are eligible to get reimbursement for any hospitalization costs incurred. A claim is allowed up to the insured amount.
2) Family floater plan: The plan provides coverage for the entire family. Your family is protected under a single policy, and beneficiaries split the insured amount equally. Compared to an individual health insurance policy, the premium is relatively lower.
3) Senior citizen plan: This plan provides coverage for those above the age of 65. You should select this plan if you wish to purchase health insurance for your parents or other senior citizens. Hence, when looking for medical insurance for senior citizens, choose the best health insurance company in Canada that offers the best coverage and includes several benefits.
4) Critical Illness plan: The plan is designed to offer coverage if you are diagnosed with critical or serious sickness or ailment. Critical illnesses covered under this plan include kidney failure, cancer, cardio-related problems, paralysis, etc.
5) Top-up plan:
This plan is suitable if you want coverage that replenishes the sum covered up to a specific amount. The plan is activated once you have used the maximum insured amount.
6) Personal accident (PA) plan:
The PA cover protects against accident-related mortality and partial or total disability.
7) Maternity plan:
The maternity plan is an optional purchase that can be made in addition to the basic plan. The add-on is intended to pay for costs incurred during prenatal, delivery, and postnatal stages.
Factors to Take into Account When Choosing Your Health Insurance Policy:
Here are a few crucial factors you should take into account while selecting the best health insurance in India.
1) Comprehensiveness of Cover: When choosing the amount of coverage, or “Sum Insured.” Consider the cost of medical care now, the rate of inflation, and your present needs.
2) Premium: Your premium is based on factors such as the amount of coverage you choose (sum insured), your medical history, age, the type of plan you choose, etc. When comparing the alternatives, try to find an insurance company that provides you with maximum benefits and features at the most affordable price.
3) Inclusions: When selecting an insurance policy, check what is covered and the circumstances in which a claim cannot be made. Having clarity prevents the hassle of claim rejections.
4) Room rent sub-limits: The room rent limit outlines the maximum amount of room rent that your health insurance will pay. The policy document will make clear any specific restrictions for room rent and capping. Make sure you understand how the room rent cap works before purchasing a health insurance policy, so you can make an informed choice.
5) Network of hospitals: Look up the list of hospitals covered by the policy that offer cashless services. Consider selecting a policy with a broad hospital network. If you frequently travel, also look into international hospital networks.
6) Co-pay: Co-pay helps in reducing the premium when purchasing health insurance coverage. You can reduce the premium by agreeing to pay a certain percentage of all claims made during the policy year. If you choose to pay a co-pay, you can decide upfront what proportion you will pay.
7) Waiting period: This is the time period within which claim acceptance will not be permitted. The waiting period is longer for pre-existing condition claims. It would be best if you chose a policy with the shortest waiting period.
8) Critical Illness: Critical illnesses like cancer, heart attacks, and strokes are becoming more common. These life-threatening disorders also have very high treatment costs. You should select a health plan that can cover these costs. However, this comes at an extra cost; therefore, carefully consider your needs before purchasing.
9) No Claim Bonus (NCB):
This is the reward your insurance company gives you for a policy year for not filing any claims. The bonus may be in the form of a reduction in your insurance premium for the upcoming year or a higher sum insured at the same cost.
10) Procedures for daycare:
Some medical treatments, including cataract surgery, can be completed in a single day without a stay in the hospital. It is crucial to understand whether your insurance policy covers such treatments.
Tax Benefits:
Health insurance plans are a blessing because they cover medical costs and work well as a tax-saving strategy. Under Section 80D of the Income Tax Act of 1961, policyholders are entitled to a tax deduction on the premiums they pay to purchase health insurance plans.
The Income Tax Act allows policyholders to receive tax advantages regardless of whether they are self-employed or employed by a company.
Exclusions: What Your Policy Won’t Cover
Here are a few typical exclusions for health policies.
- Dental procedures,
- Cosmetic procedures,
- Congenital diseases,
- Some pre-existing conditions,
- Non-prescription drugs,
- Injuries incurred from terrorism, suicide, and war.
Final Thoughts:
You may have heard the saying, “health is wealth.” However, given the uncertainty of life, in addition to good habits and a healthy lifestyle, you also need money to maintain good health. And when you most need that money, health insurance can make it much simpler to get access to it.