According to Wikipedia, Health insurance is an insurance that covers the whole or a part of the risk of a person incurring medical expenses, spreading the risk over a large number of persons. At a more basic level, it is an insurance policy which covers an individual/family against medical and surgical expenses where the policyholder chooses a limit of coverage under an insurance plan and he/she will be reimbursed the expenses incurred for treatment due to an injury (due to an accident or sickness) or illness.
Health insurance provides people with a much needed financial backup at times of medical emergencies. Health risks and uncertainties are a part of life. One cannot plan and get sick but one can certainly be prepared for the financial aspect. One of the ways to be financially prepared against uncertain health risks is by buying health insurance. There are however some popular myths around Indian mediclaim insurance, which we will try and decode…
As per the law, it’s not mandatory for an individual to have a health insurance coverage like Third Party motor insurance.But honestly, it is even more important and critical for every single individual to have health insurance since it protects not only the insured person, but also provides financial support to the family at a critical juncture in their lives.
Popular Myths about Health Insurance
Health Insurance Coverage is from Day 1
Many Individuals who have opted for mediclaim insurance in India believe that they will be covered for all treatment and illnesses from the day their policy starts. This however is not true, since almost all coverages have a waiting period of anywhere between 1-4 years. There are also stated exclusions under Indian medical insurance, which are not covered under the policy. Accident related coverages however start within 30 days of the policy being issued.
Drinkers and Smokers Cannot buy Health Insurance
More than half of the individuals who today smoke and drink are of the view that they are not eligible for purchasing Health Insurance and this is completely not true. While it is a fact that drinkers and smokers present a more riskier profile for the insurance company to offer coverage to, they can definitely buy health insurance from almost all insurance companies. There will however be a more stringent medical examination prior to them being covered and they can expect the premiums to be relatively higher than a non smoking/ non drinking individual.
Company sponsored Group Health Insurance is Sufficient Coverage
Most organisations today, provide health insurance coverage for their employees as part of their Employee Benefits (EB) programs. Most of these programs have a relatively lower and fixed sum insured available to the employee and some companies do not offer coverage for the employee’s family. The coverage provided under such programs may not be sufficient in case of an unfortunate critical illness and the employee could end up paying for the remaining treatment from their pockets. Another risk is if the employee chooses to leave the organisation to better their prospects, they could be stranded without health insurance. Hence it is advisable to have an individual health insurance plan for oneself and their family.
Indian medical insurance is for Senior Citizens
Many people who do not have health insurance believe that health insurance is only for old/aging people. After all, what could happen to a younger person? This is because they associate falling ill/requiring hospitalisation or surgery are related directly to age. They tend to forget that Health insurance is not only for Sickness related treatment but also for Accidents. Another major benefit of buying health insurance at a young age is that the cost of such a policy is lower and also for every claim free year, there is a bonus sum insured added to the policy which ensures that for similar premiums, additional coverage is available when one starts young.
Insured can Claim unless Hospitalized for 24 hrs
There is a general belief among individuals that only treatments (including surgeries) which are followed by hospitalization of atleast 24 hrs only are covered under a health insurance policy. However today, due to technological advances in medicine, it is not always necessary that all surgeries required 24 hrs hospitalisation. There are many surgeries called Day Care procedures like a cataract operation, kidney stone removal, which take a few hours and do not require hospitalisation of patients. Almost all health insurance policies cover Day Care procedures.
Health Insurance Policies do not cover Maternity/Pregnancy
There is a popular misconception that mediclaim insurance in India do not cover maternity/pregnancy, which is not correct. Almost all health insurance policies/companies offer Maternity coverage but it does come with a waiting period of between 12-24 months. Therefore parents to be need not be worried, and can definitely go in for a policy which covers maternity/pregnancy.
Claim processing and Reimbursement take months
Most individuals who do not have health insurance feel that insurance companies take very long to settle claims (which are not cashless) and also find frivolous reasons to deny settling what the insured believes is a genuine claim. If the insured files their claim accurately by providing all the relevant information on the claim form, submits all bills and documents pertaining to the hospital visit and treatment, there is no reason for the insurer to delay settling the claim. Most insurers in India process claims in a matter of 7-10 days from receiving the complete claim application.
Some of the key reasons it is absolutely necessary to take health insurance include:
Medical Emergencies Can Bankrupt You With today’s medical inflation and every increasing cost of healthcare, it would not be advisable to be without sufficient health insurance. With the advancement in medicine, doctors and hospitals and starting to bill their patients much higher for routine and complicated treatments that the customer will have to cough up without sufficient health insurance.
Changing lifestyle There are many reasons to have a health insurance policy in place. The paradigm shift in our lifestyle has made us more prone to a wide range of health disorders. Commuting, hectic work schedules, wrong eating habits, quality of food, and rising levels of pollution have increased the risk of developing health problems. Health insurance once again will come to the rescue were one to be hospitalised.
Preventative Care and Early Intervention When one doesn't have insurance, one may avoid getting treated for minor issues which can escalate into bigger and costlier problems later. Preventive medicine and quick treatment are the best ways to avoid expensive hospital stays. Many insurance plans today encourage and support wellness and an overall healthy lifestyle of the insured. Some insurance plans have an inbuilt annual health check up free of cost to the insured.
Coverage for Many Additional Benefits Today’s insurance plans are not only about covering Inpatient hospitalisation. It also includes coverage like Pre & Post Hospitalisation, Coverage for AYUSH treatment, Maternity & New Born baby cover, Organ Donor Expense cover, Ambulance charges cover, Daycare and Domiciliary Hospitalisation expense coverage and many more.
Income tax benefit Earlier, this used to be the primary reason for individuals to buy insurance. Payments made towards health insurance premiums are also eligible for tax deductions under section 80D of the Indian Income Tax Act. Individuals up to 60 years of age can claim a deduction of up to Rs. 25,000 for the health insurance premium paid for themselves, or for their spouse or children. One can also claim another Rs. 50,000 as deduction if you buy health insurance for your parents aged 60 years and above.