Health Insurance

What is Health Insurance ? Defination & Types health insurance premium

What is Health Insurance ? Defination & Types health insurance premium

Health Insurance
Health Insurance Defination & meaning 

Health insurance is a type of insurance coverage that pays for medical and surgical expenses incurred by the insured. It is designed to protect the insured from high and unexpected healthcare costs.

There are several types of health insurance, including:

  1. Private health insurance: sold by private companies and often tied to employment.
  2. Public health insurance: provided by the government and typically based on income, such as Medicaid and Medicare.
  3. Consumer-driven health plans: plans that combine a high-deductible health plan with a health savings account.
  4. Short-term health insurance: temporary coverage that may be an option for people transitioning between jobs or waiting for other coverage to begin.

A premium is the amount of money that an individual or employer pays to a health insurance company to maintain insurance coverage. It is typically paid on a monthly or quarterly basis.

What is Health Insurance ? Defination & Types health insurance premium

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what is a deductible in health insurance ?

  • A deductible is a specified amount of money that the insured individual must pay out-of-pocket before their health insurance coverage begins to pay for medical expenses. For example, if an individual has a $1,000 deductible, they will be responsible for paying the first $1,000 of their medical expenses before their insurance coverage kicks in.

 

  • Deductibles can vary widely, depending on the type of plan and the insurance company. Some plans may have no deductible at all, while others may have a very high deductible.

 

  • Deductibles are typically higher for individual plans than for group plans, and for plans with lower monthly premiums. High-deductible health plans (HDHPs) which have high annual deductibles, but lower monthly premiums are also available.

 

  • Deductibles are an important consideration when comparing health insurance plans, as they can have a significant impact on the overall cost of healthcare.

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Types of Health Insurance

 

There are two basic types of health insurance:

  1. Mediclaim Plans

Mediclaim or hospitalization plans are the most basic type of health insurance plans. They cover the cost of treatment when you are admitted to the hospital. 

The payout is made on actual expenses incurred in the hospital by submitting original bills. Most of these plans cover the entire family up to a certain limit.

  1. Critical Illness Insurance Plans
  • Critical Illness Insurance Plans cover specific life-threatening diseases. These diseases could require prolonged treatment or even change in lifestyle. 
  • Unlike hospitalization plans, the payout is made on Critical Illness cover chosen by the customer and not on actual expenses incurred in the hospital. The cover gives the flexibility to use the money for changing lifestyle and medicines. 
  • Also it’s a substitute for income for the time you could not resume work due to illness. Payout under these plans are made on the diagnosis of the disease for which the original medical bills are not required.
  • Why do you need Health Insurance now?
  1. No one plans to fall ill or get hurt, but a serious illness can strike anyone at any time. The cost of treating the illness can cause severe financial strain on the savings you have accumulated over time. 
  2. This means that you might have to compromise on providing your child the best quality education or defaulting on your home loan payments. Today, the cost of medical treatment is continuously rising.
  3. For e.g., Herceptin, a cancer medicine costs approximately  1,10,000 for a vial of 440 mg. Depending on the weight, a patient usually requires 17-19 bottles for treatment over a year . That’s  18 – 20 lakh just for the medicine~
  4. Then add hospitalisation costs, doctor consultation fees, chemotherapy costs, etc. and your overall expenses could exceed 25 lakhs. These costs which are already very high, are increasing every year. Most smart people have taken necessary precautions to insure their health as soon as possible. 
  5. Health insurance is a living benefit, where you would need money at the time of dire need. One disease can drain out all the savings you have made for your children’s education, marriage, for buying a house or event 
  6. You would not want your family’s dreams to get shattered just because of an illness, especially when you could have protected yourself financially.  
  7. It is beneficial to take a health insurance policy when you are young and healthy . As you get older, not only does your premium increase, but you also stand a chance of being denied a health cover by the insurance company.

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How to choose a good health insurance plan?

Anybody who has a health insurance policy will tell you that buying one is one of the smartest financial decisions by any earning individual. 

Now that you have decided to buy a health insurance policy, you need to know how to select a good health insurance plan that will take care of all your needs. Here is a list of benefits any good health insurance plan should offer you:

  • Protection against a large number of critical illnesses
  • Flexibility to choose your health cover
  • No increase in premiums during the policy term even if your health condition changes
  • Long policy term that covers you even in your old age
  • Large hospital network for easy access to medical treatment

Health Insurance

Should I buy a Mediclaim plan or a Critical Illness Insurance plan?

  1. A Mediclaim plan will either reimburse all your hospitalization expenses or settle the hospital bills via a cashless facility. With a Critical Illness Insurance plan, you will receive a lump-sum payout on the detection of a critical illness. 
  2. You don’t have to be hospitalised for the same. If you are unable to work because of the illness, then you can use the amount as a substitute for your monthly income. You can even use the money to cover expenses for doctor visits, medicine purchases, medical tests or any other expense that might arise during this time. 
  3. That is why you need both – a Mediclaim plan to cover your hospitalization expenses and a Critical Illness Insurance plan to cover your loss of income and other expenses that arise due to an illness.
  4. Health insurance is a type of insurance coverage that pays for medical and surgical expenses incurred by the insured.
  5.  It is an agreement between an insurer and an individual or group in which the insurer agrees to pay for the insured’s medical expenses in exchange for a premium. 
  6. There are several types of health insurance, including employer-sponsored plans, individual plans, and government-funded plans. Some common types of health insurance include HMOs, PPOs, EPOs, POS, and Indemnity plans.

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