What is Health Insurance: Definition, Types, Benefits, & Features
July 28, 2021

What is Health Insurance: Definition, Types, Benefits, & Features

Health insurance is a financial product that pays for health-related expenses resulting from an ailment. These expenses may be in the form of the cost of medicines, hospitalisation fees or other medical fee expenses. However, you must understand what is health insurance in detail to make an informed decision of purchase.

What is health insurance?

A health insurance policy is a contract between the policyholder and the insurance company that states that the insurer pays all or partial benefits to the insured individual if they incur a listed medical expense. Most of these policies are provided by the employer and are available to employees as group coverage too. However, it is best to get a standalone health insurance policy for you and your family for better financial security.

What is health insurance?
Image Source: Shutterstock

Now that you know what is health insurance, let’s take a look at the type of health insurance plans available:

  • Individual health insurance: Individual health insurance involves the medical coverage of a particular individual upon payment of a premium amount.
  • Family floater plans: family floater is coverage that is extended to the dependents of the insurer.
  • Group insurance: Group health care insurance is generally paid by companies for their employees.This reduces the medical cost of companies

What is Health Insurance Benefits?

So, what are health insurance benefits? Let’s take a close look.

  • Certain benefits are included in a health cover that includes regular medical treatment. You should check with your health insurance policy if you get a yearly physical examination. This will help you determine if you need any major medical treatment in future.
  • Given the escalating cost of medical care in India, it is critical to obtain a good health insurance policy as soon as possible. The policy not only provides comprehensive coverage but it also protects you from hospitalisation costs in the event of an emergency, even if inflation is high. It not only relieves tension but also looks after your health.
  • Under Section 80D of the Income Tax Act of 1961, the government provides tax deductions on the premiums paid for health insurance, encouraging people to get the necessary financial protection.
  • Different health insurance plans have different features. The coverage provided by each policy is determined by the rating of the plan. Depending on your preference, you can select the deductible limits or the co-pay proportion for the health insurance plan.

What is Health Insurance Features?

Here are some common features of health insurance plans:

  • The primary goal of medical insurance is to ensure that you obtain the best medical treatment possible without putting your finances at risk. It includes, among other things, hospitalisation costs, daycare procedures, domiciliary fees, and ambulance costs. As a result, instead of worrying about such huge charges, you can completely concentrate on your quick recovery.
  • You can also find two additional types of coverage. One of them is critical illness insurance. In this type, you get coverage for several critical illnesses, including heart attack, stroke, paralysis, renal failure, etc. Critical illness insurance usually covers the cost of medication, hospitalisation and critical procedures.
  • In most cases, insurance companies have partnerships with hospitals, referred to as network hospitals, that provide cashless treatment to covered individuals in the event of hospitalisation. This means you can receive treatment at these facilities without having to pay anything for the medical expenditures, and the insurance company will repay you when you file a claim later. Note that the claim will be authorised if it is submitted in compliance with the policy’s terms and conditions.

In this era of uncertainty, health insurance has become extremely important. In 2020, nearly 500 million people across India were covered under health insurance schemes. With time, the threats to our life are only increasing, and it has become crucial to find the right financial instruments to deal with it appropriately. Hence, remember to opt for a trusted insurance provider such a Care Health Insurance to fulfil your health insurance needs at affordable premium rates.