Health insurance

Health insurance

Health insurance is a kind of assurance to reimburse expenses incurred on any kind of medical treatment. As you are probably aware, the cost of good medical treatment is very high in India. Most times, it is out of reach for the average Indian. A medical emergency may strike any time, and it is not always possible to be financially prepared to deal with it. This is where health insurance comes to the rescue.

Consider the following example:

Shyam was a typical middle-class Indian working for a private company. At the age of 35, he suffered a heart attack. His doctors advised him to undergo an emergency bypass surgery. The cost of the surgery was estimated to be around Rs. 3 lakh. Skipping the operation would mean an early death was highly possible. On the other hand, if he opted for surgery, his life’s savings would be wiped out. Fortunately, Shyam had a health insurance policy. Hence, he was able to undergo the surgery and the cost was borne by the insurance company.

So, you can see how critical health insurance is in a time of increasingly unhealthy lifestyles and rising medical costs.

Wouldn’t you like to know about the different types of health insurance policies available in India? Without strictly segregating policies in a mutually exclusive manner, we can classify the available policies as Standard, Family Floater and Critical Illness.

• A Standard health insurance policy would typically cover hospitalisation expenses, nursing expenses, medicine expenses, doctors’ fees, operation expenses and pre- and post-hospitalisation expenses related to the illness.
• A Family Floater plan is similar to a Standard policy, the difference being that it covers the entire family. Consider the following example:Ganesh had taken health insurance cover for himself, his wife, his son and his daughter for an amount of Rs. 1 lakh each. His wife had to undergo an emergency operation which cost him Rs. 1.5 lakh. Since the insurance policy was only for Rs. 1 lakh, Ganesh had to bear the additional burden of Rs. 50,000. Now if Ganesh had taken a Family Floater policy of Rs. 2 lakh, the entire medical expense would have been covered by the policy.
  In case of a Family Floater plan, all members of the family combined are covered to the extent of the amount of the policy. Any member who falls ill can avail of the insurance cover. However, the policy limit, of Rs. 2 lakh in the example above, is not available to every family member individually. Once the limit is exhausted, the insurance cover is not applicable. Since the probability of all the family members falling ill in the same year is quite low, a Family Floater plan makes a lot of sense.
• A Critical Illness plan covers specific diseases that are not normally covered by Standard plans. In case the insured is diagnosed with a critical illness covered by the plan, a lump sum amount is paid to him. The critical illnesses normally covered under this plan are:
  • Cancer
  • Heart valve replacement surgery
  • Heart attack requiring bypass surgery
  • Kidney failure
  • Major organ transplant
  • Stroke
  • Paralysis
  • Multiple sclerosis