What is Health Insurance & its Benefits

Today, in the purview of medical inflation and the growing risks of various illnesses due to sedentary lifestyle,health insurance has become a necessity for all. Health insurance policy, which is also known as Mediclaim policy, is an agreement between the insurance company and the policyholder where the former agrees to compensate the insured for the expenses incurred for treatment and hospitalisation charges in lieu of a premium.

Usually, insurance companies have tie-ups with leading hospitals, to facilitate direct payment of the bills of the insured person under the cashless facility. These hospitals are called network hospitals, and you can find the names of these hospitals in your policy documents or website of the insurance company.

Insurance companies offer different health insurance plans to suit the varying needs of people. For example, individual health insurance policy is meant or unmarried people, Family health insurance is ideal for people who have spouse, children and dependent parents. Whether you buy a family health insurance or individual plan, there are many benefits of health insurance, such as:

Daily allowance

When an individual is hospitalised for a longer duration, especially the sole earning member of the family, it can be challenging for the family to manage their daily expenses. In such times, health insurance policy provides the family of the insured with daily allowance. This helps to run the daily expenses smoothly.

Cashless facility

As discussed earlier, cashless facility is one of the significant benefits that a health insurance policy provides. When you get hospitalised in any of the network hospitals that have a tie-up with your insurance company, you need not worry about the bills, as it gets settled directly by the insurance company.

Tax benefits

Under section 80D of Income Tax Act of India, the premiums paid on health insurance are subject to a tax deduction. The deduction available for individuals is generally up to ₹15,000 and for senior citizens (above age 65 years) it is up to ₹25,000. In case of an individual paying his/her parent’s premium, an exemption of ₹30,000 is available. Yet, tax exemption must not be only motive for you to buy health insurance; you must invest in health insurance to get coverage against the health risks.

Critical illness coverage

Severe illnesses like cancer or stroke do not come with prior notice or any visible symptoms. One must, therefore, always be financially prepared to face such situations. Nowadays, almost all health insurance policies offer coverage against major illnesses like cancer, bone marrow transplant, kidney failure, stroke, etc. The coverage provided against critical illness covers the cost of treatment, daily expenses incurred and more, limited to the sum assured.

Other than the health insurance benefits mentioned above, you can avail additional benefits on your health insurance policy by choosing add-on covers. These add-ons or riders offer supplementary protection against the risks that are not covered in the original policy. So, select a health insurance plan that suits your particular requirements.