Wednesday, 2 July 2014

Why is Health Insurance important?

Health insurance policies insure you against several illnesses and guarantee you stay financially secure should you ever require treatment. They safeguard your peace of mind, eliminate all worries about treatment expenses, and allow you to focus your energy on more important things, like getting better. Let's learn more about the various types of health insurance available, and what the best policy for you might be.

Health insurance in India typically pays for only inpatient hospitalization and for treatment at hospitals in India. Outpatient services were not payable under health policies in India. The first health policies in India were Mediclaim Policies. In 2000 government of India liberalized insurance and allowed private players into the insurance sector. The advent of private insurers in India saw the introduction of many innovative products like family floater plans, top-up plans, critical illness plans, hospital cash and top up policies. Broadly we can divide the health insurance plans in India today can be classified into two categories:

Hospitalization plans: 
Hospitalization plans are indemnity plans that pay cost of hospitalization and medical costs of the insured subject to the sum insured. The sum insured can be applied on a per member basis in case of individual health policies or on a floater basis in case of family floater policies. In case of floater policies the sum insured can be utilized by any of the members insured under the plan. These policies do not normally pay any cash benefit. In addition to hospitalization benefits, specific policies may offer a number of additional benefits like maternity and newborn coverate, day care procedures for specific procedures, pre-and post-hospitalization care, domiciliary benefits where patients cannot be moved to a hospital, daily cash, and convalescence.
There is another type of hospitalization policy called a top-up policy. Top up policies have a high deductible typically set a level of existing cover. This policy is targeted at people who have some amount of insurance from their employer. If the employer provided cover is not enough people can supplement their cover with the top-up policy.

Hospital daily cash benefit plans:
Daily cash benefits is a defined benefit policy that pays a defined sum of money for every day of hospitalization. The payments for a defined number of days in the policy year and may be subject to a deductible of few days. 

Critical illness plans:
These policies pay out a lump sum in event that the insured is a diagnosed with one of the illnesses specified in the policy. Some of the policies require a survival period for the payout to take affect.
Five Important tips for Health Insurace
1. Define your requirements of health coverage

2. Decide which members of your family need to be part of the health insurance policy you might find splitting policies to be beneficial.

3. Decide the total amount of health coverage needed.

4. Read through the list of exclusions of the health insurance policy - both permanent and first year.

5. Check the network coverage of the Third Party Administrator (TPA) being employed by the

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