Basics of health insurance
India is witnessing a new wake of health awareness and by looking at the current situation, health has become a major concern. Due to this, the health insurance industry in India is gaining momentum. People have been considering health insurance as a major part of their financial planning too. Health expenses of taking medical assistance have reached their heights. In the near future too, taking medical assistance will go even higher.
Insurance companies are designing a variety of products to suit diverse customer needs., These innovative insurance products do come as a definite relief in the midst of increasing medical inflation. People moved swiftly towards purchasing health insurance plans for themselves and their families. As COVID has made the realization of having health insurance steer clear.
Why does one need a health insurance cover?
Health Insurance works as a friend in need. It is insurance coverage that covers the medical expenses if any unforeseen incident happens. These expenses generally cover the hospitalization cost, cost of medicines, or even doctor consultation fees, depending upon the requirement!
The reasons for getting a Health Insurance cover are ample. The most important reason is to fight lifestyle diseases. People under the 45 age bracket generally start having illnesses like diabetes, respiratory problem, heart disease, etc. Such diseases are challenging to cope up with, especially, financially.
Nowadays, medical expenses from consultation to surgery are a lot. During that time, health insurance will benefit you. Also, another important aspect is to safeguard your family. No one plans an unforeseen incident, it just happens. Plus, buying health insurance at an early age will benefit you even more!
What does the health insurance for a hospitalization policy cover?
During the policy period, the actual cost of the treatment for hospital admissions is fully or partly covered with hospitalization policy cover. This is a major form of coverage that is applicable for various hospitalization expenses, for both before and after hospitalization for some specified period.
Such policies may be available on an individual or on a family floater basis where the sum insured is shared across the family members. There are generally 2 kinds of medical expenses, one is the pre-hospitalization expense and the other is the post-hospitalization expense.
In Pre-hospitalization medical expenses covers tests, including blood tests, urine tests, etc. These expenses are incurred before getting admitted.
After you get discharged from the hospital, do the medical expenses stop?
In most cases, it does not. Post-hospitalization expenses are the expenses that are added after discharge. Generally, this includes medications, therapy, and medical tests to monitor your health and recovery.
Is there anything that is not covered with the Health Insurance Policy?
Yes! There are certain illnesses that are excluded from the 1st year of coverage. For instance, the cost of contact lenses or spectacles, and hearing aids are not covered. Then cosmetic surgery, any pre-existing illness, infertility, or pregnancy-related complications, diseases related to overconsumption of alcohol or drugs.
What is the implication of the Room Rent Cap?
Well, Cap or Capping as we say refers to its ‘limit’. Room Rent Capping is the limit up to which your insurance company will bear the room rent. If you stay in a hospital room that costs more than the cap, you will have to bear the additional money during the claim settlement.
This is mentioned in the online health insurance policy document, It can either be a specific amount, for example, Rs. 15000 or in percentage, i.e. 3% of the sum insured. For example, Ravi bought an Individual Health insurance policy with a room rent cap of Rs. 15,000 and Yash bought an insurance policy with a room rent capped at 3% of the sum insured. The sum insured of Yash health insurance policy is Rs. 5 lakhs. Thus, the room rent cap on Yash’s policy is also Rs. 15,000.
Do we get a tax rebate for buying Health insurance?
Health insurance reduces our taxable income and our tax liability. Under Section 80D of the Income Tax Act, 1961 you can claim a deduction of Rs.25,000 on insurance for self, spouse, and dependent children. An additional deduction for the insurance of parents is available up to Rs 25,000 if they are less than 60 years of age, which takes the total deduction to Rs 50,000.
If your parents are aged above 60, the deduction amount is Rs 50,000. In this case, you can claim a total deduction of Rs 75,000 from which Rs 25,000 is on the premium paid for self, spouse, and dependent children.
Whereas if both taxpayer and parents are 60 years or above, the maximum deduction available under this section goes up to Rs.1 lakh.