Knowledge Centre

Layman's Guide to Understanding Health Insurance

A health insurance plan plays an important role in providing financial stability in case of medical emergencies. After all, with healthcare costs shooting up every single day, it can be tough to meet treatment costs by shelling out money from your savings. It is an effective way to protect your finances from huge expenses of medical treatment. To avail the benefits of health insurance it is important to understand its nuances though. This article will help you with the same.

What is health insurance?

Health insurance is also known as medical insurance. It is a type of insurance which covers the cost of medical and surgical expenses of an insured person. Health insurance either reimburses the expenses of treatment or directly pays to the care provider of the insured individual. When you buy health insurance your insurance provider give you legal assurance to offer financial help in case of any health issue. Health insurance promises to cover whole or a part of the person’s medical expenses.

Some important health insurance terms:

Pre-existing diseases

The diseases which you have before buying the insurance policy, are called pre-existing diseases. Most of the insurance providers do not offer coverage for pre-existing diseases until you complete 3-4 years of the policy with the same provider.

Survival period

Usually, this term is used in critical illness insurance plans. For most of the policies, the policyholder has to survive for at least 30 days to avail the benefits of health insurance plan.

Waiting period

Waiting period is a time after which you can avail the benefits of health insurance. Waiting period may vary from one insurance provider to another. In most cases, it is 30 days. There is no waiting period for emergency hospitalization because of an accident.

Network hospital

All insurance providers have tie-ups with hospitals; these hospitals are known as network hospitals. You can go with an insurance provider which has more network hospitals in your area than others.

Health insurance inclusions

Things which are covered in your health insurance plan are known as inclusions. All your inclusions are mentioned in the policy document. Some inclusions of health insurance are:

  • In-patient hospitalization

  • Pre and post hospitalization expenses

  • Ambulance charges are covered up to a limit

  • Daycare treatment

  • Organ donor expenses

  • AYUSH treatment

  • Health check-ups

  • Restore benefit

Health insurance exclusions

Things which are not covered in your health insurance plan are considered exclusions. Exclusions are also mentioned in the policy documents. Some of them are:

  • Pre-existing diseases

  • Medical illnesses within 30 to 90 days of buying the policy

  • Some treatments such as joint replacement, piles, hernia, etc. are not covered in initial 2 to 4 years after taking the policy

  • Injuries because of alcohol or drug abuse

  • Self-inflicted injuries

  • Cosmetic treatment

  • HIV/AIDS

  • War, riot, or nuclear contamination

  • Maternity expenses unless the plan has maternity cover

  • OPD expenses until the plan has inbuilt OPD cover

Why you need to buy health insurance

Changing lifestyle

Because of a sedentary lifestyle, not only adults but also kids are becoming prone to lifestyle diseases such as diabetes, heart diseases, etc. The rising level of pollution is also causing numerous diseases. Naturally, health insurance can help you financially.

Expensive healthcare

Most people cannot afford the cost of treatment these days, but when you have health insurance your insurer takes care of the medical costs.

Coverage of pre and post hospitalization

Not only mainstream medical treatment cost but also pre and post hospitalization expenses are covered under medical insurance policies.

Health check-ups

You can also take advantage of preventative services and visit the doctor regularly for health check-ups.

Tax benefit

With health insurance, you not only save on your medical bills but also save on tax. Health insurance premium is eligible for tax deduction under section 80D of the Indian Income Tax Act. (Subject to change in tax laws)

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.


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