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Health Insurance

Health Insurance Basics

Health insurance is a product that can help you reduce your medical expenses. Just like your car or bike insurance pays for repairs if you get into an accident, health insurance covers you if you get sick or injured. In India, health plans usually only cover hospitalization and related expenses, however with Insurance Inbox you can also find plans that cover preventive care costs – i.e., doctors’ visits and medical tests. Before buying a health insurance plan, you should know a few key terms that will help you understand what expenses the plan will cover and how much the insurer will pay when you make a claim. We’ll discuss them in more detail in our “Key features” section below.

Who should buy health insurance?

Anyone over the age of 25 should make sure that they have some sort of health insurance plan. Check if you are already covered through your employer or your school/college, those under the age of 25 may also be covered through their parents. Purchasing a health insurance policy can get you a valuable tax benefit. In case you are thinking that it makes more sense to pay the tax than to buy an expensive health insurance policy, you should know the amount you’d have to pay out-of-pocket for a medical emergency if you don’t have health insurance is much, much higher than the tax fee. Rising medical costs are a leading cause of consumer debt and related financial problems (e.g., bankruptcy and home foreclosure).

If you’re buying health insurance and you fit into one of the following groups, we’ve listed a few additional considerations for when you’re shopping for health insurance.

If you’re buying for a family

If you have children, it’s likely that they may need to visit the doctor or urgent care more frequently than a relatively healthy adult. Make sure that the plan covers all your needs, as you may otherwise be paying out-of-pocket. There are various kinds of family floater plans available in the market, for various combinations like 2 adults; adults plus one kid, two kids etc. You can choose a plan that covers your needs like maternity cover, new born insurance, health check-ups, diabetes plans, senior citizen plans etc.

If you have a low income

If you’re on a low income or tight budget, you should look some basic group health policies which do not offer extravagant features but are still very useful in case of hospitalization, just so that your expenses don’t burn a hole in your pocket. The most important thing to remember is to have some sort of coverage in place. A serious health issue can turn into a financial disaster if you’re not careful.

If you’re pregnant

There are many health plans that offer maternity and childbirth as well as new born cover. These services are covered even if you became pregnant before your coverage starts.

If you’re married, but don’t have kids

If you’re married but don’t have kids, you don’t need to buy health insurance as a family. You can buy individual plans from separate companies, if that makes sense for you and your spouse. You can also purchase a family plan from the marketplace. One of you can also be a dependent on the other’s employer-provided health insurance plan, if that’s available.

Key features that decide how much you pay

When you shop for a health insurance plan, it’s important to know what the key features are that decide how much you’re actually going to pay for healthcare. These can be boiled down into five major features of your health insurance plan:

Premium

It’s easy to think of your premium as your yearly bill. Every year, you pay a premium to a health insurance company in order to access a health insurance plan. As we’ll get into in a second, while your monthly premium may be how much you pay for health insurance, it’s not equivalent to how much you pay on healthcare services. In fact, choosing a plan with lower premiums will likely mean that you’ll pay more out-of-pocket if you need to see a doctor.

Copayment

A copayment, often shortened to just “copay,” is a fixed amount that you pay for a specific service. For example, some health insurance plans will have copayments for covering pre-existing conditions or for any treatment claimed by a person who is older than 60 years of age. If your treatment falls under a copay category, the insurer will ask you to pay some percentage (10%-20%) of the cost from your pocket and will only bear expenses towards the remaining amount.

Pre-Existing Diseases

Insurers usually have a waiting period before you can make a claim for treatment of your pre-existing conditions. Make sure you declare your pre-existing conditions at the time of purchase so that your policy will cover it in the future. The waiting period is different for each condition and plans can have waiting periods between 1-4 years from the date of purchase.

Sub-Limits and Exclusions

Health Insurance Plans often have limits on the expenses that can be claimed. Normally, you can claim expenses up to your sum insured (minus any claims made during the year), but in the case of certain treatments, such as cosmetic surgery, insurers limit the claim amount to a certain cost e.g. Rs. 10,000. Some insurers exclude them entirely and will not pay any claims towards such treatments. Make sure you read the policy document and understand all the exclusions before purchasing.

Add-Ons

You can buy add-on health insurance products along with your health insurance plan to cover specific health needs that are not included in the base plan. Some of these, such as critical illness insurance, may be of use to you.Critical illness insurance helps you pay for expensive illnesses that impact you and your ability to earn money for multiple years. For example, Alzheimer’s disease, cancer, and stroke are three diseases that a critical illness insurance policy may cover. Each critical illness policy has its own list of illnesses that it will cover. If you are diagnosed one of these illnesses while you’re a policyholder, your insurer will typically pay you a lump sum cash payment. If you own a term life insurance policy, you can also get a critical illness rider attached to your life insurance policy for less money than a separate critical illness plan.

The essential benefits most health insurance plans provide

Given below are some facilities that most of the health insurance plans cover.

  • Outpatient care that you can receive without being admitted to a hospital
  • Pre-hospitalization and post-hospitalization expenses
  • Daycare treatments & domiciliary treatments.
  • Emergency services
  • Hospitalization for surgery, overnight stays, and other conditions
  • Hospital Room rent, ICU charges and anesthesia.
  • Alternative forms of medicine, such as Unani, Ayurveda, Homeopathy etc.
  • Pre-existing diseases, covered after a specified amount of time.
  • Pregnancy, maternity, and newborn care

How much should a health insurance plan cost?

There are five main factors that go into setting your premium:
1. Your age
2. Your location
3. Whether or not you use tobacco
4. Individual vs. a family plan
5. The additional features available in the plan

Health insurance companies are allowed to take your gender or your current or past health history into account when setting your premium.

Today, an average basic health insurance plan for a family costs around Rs.8000 – Rs.12000 However, as we know, health insurance costs have been increasing year over year, the average cost of a health insurance plan is poised to increase over 30%.

When it comes to buying a health insurance plan, however, you need to look at more than just the monthly premium. As we mentioned in the sections above, health insurance is only one part of your total spend on healthcare services A tax credit may help you afford the right health insurance plan for you. You can take the tax credit when you file your yearly tax return.

How to find an affordable health insurance plan

Finding a health insurance plan that fits you and your needs doesn’t have to be a pain. When shopping for an affordable health insurance plan, it’s important to know what makes a plan affordable to you, specifically. Do you rarely utilize healthcare services? A high copay, low premium plan probably makes sense for you. Are you managing a chronic illness? A health insurance plan that has a higher sticker price, but has lower out-of-pocket costs, will probably be more affordable in the long run.

While you can search among the various plans available on the websites of insurance companies, they don’t make it easy. Insurance Inbox was specifically designed to help you find a health insurance plan that fits your budget and covers your other specific needs, such as keeping your doctor or prescription medication.

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