Insurance for healthy living

Health is wealth. With increasing complexities of modern life, demanding harder work schedule, and deteriorating environmental situation, health has become a precious commodity. And, the spiralling cost of medical services makes this commodity much more expensive.

Health insurance is a tool that helps us protect ourselves against economic losses due to illness, accidents, and disability. Most of us, however, ignore the importance of health insurance.

Components of health insurance

Health insurance consists of two major components — Medical expenses insurance and disability income insurance.
Medical expense insurance protects individuals and families against the expenses incurred for medical treatment. Disability insurance provides income when you cannot earn anymore because of disability. In this article, we will focus on medical expenses insurance.

How to get health insurance
Health insurance can be taken either in groups or as individuals and families. Group insurance is generally provided by the employer and the he pays all or a part of the health costs incurred by employees. Some employers also cover immediate family members such as spouse, kids, and parents.

Individual or family health insurance is taken by an individual. You can either take a lump sum insurance where expenses on the whole family will not exceed a certain limit or you can define a limit on each individual’s expenses in the family.

Types of Health Insurance
Hospital expense insurance: This insurance policy covers the expenses incurred in hospitalisation. The insurance coverage may be for full or part of the expenses.

High value medical expense insurance: This covers specific diseases which are expensive to treat. The premium is usually very high for this type of insurance.
Dental expense insurance: This  covers your dental expenses.
Vision expense insurance: This policy covers eyesight-related expenses.

Apart from these, there are insurances that cover just your surgeon’s fees, your physician expenses and hospital indemnity expenses. The important point is to know which insurance suits your requirement.

Most important features of health insurance

Apart from the usual concern about coverage on fees, hospitalisation, physician visits, there are a few important points which individuals must consider before opting for health insurance.

Cashless versus reimbursement
Cashless insurance gives you peace of mind but this facility can be utilised only if the hospital you get admitted to falls under the network of authorised hospitals. Reimbursement option doesn’t have such a limitation. However, here you have to foot the bills and then claim the reimbursement. There is another facility called cash allowance which limits the amount of money that is paid by the insurance company.

Individual vs family limit
Family limit covers all the family members with a maximum cover. It means all the family members combined will have a cover, let’s say 5 lakh. In case of individual coverage, every family member will have individual coverage of 1 lakh each (assuming 5 family members).

Deductible and co-payment
Deductible plays a big part in reducing the amount of premium you pay. A deductible is a fixed amount of money you have to pay before most, if not all, of the policy’s benefits could be enjoyed. In case of a high deductible, the premium is less for the same coverage. Co-payment is another option where the individual pays a part of the medical expenses incurred while the insurance company covers the rest.

Checklist
l Check the daily amount in case of hospitalisation. Make sure that the daily amount is very close to the prevailing rate. The coverage should be adequate.
l Check the maximum amount your policy will pay.
l Check if the policy allows cashless transactions. There were incidents where the insurance companies refused to pay the cashless services unilaterally.
l Check the co-payment structure if your insurer has one. Co-payment is cost sharing between the individual and the insurance company.
l Finally, check the exclusions and limitations section of your policy. This section explains what is not covered. Most health insurance companies can give you a hard time when it comes to dealing with pre-existing conditions. Be absolutely clear about it. Never miss out on reading the fine print.
The insurance plan and features vary with individual insurers. Please check with the individual insurance company to get an accurate picture.

The writer is CEO of BankBazaar.com, an online marketplace for personal, home and car loans