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What is health insurance?
Health or medical insurance policy offers financial assistance for medical expenses arising from an accident, sudden illness, or planned/emergency hospitalisation. Some policies provide basic coverage like medical treatments, doctor visits, ambulance charges etc., while some are more specific.
Health insurance also depends upon who is paying for the policy and who is availing of the coverage. For example, employers pay for the health insurance coverage for the employees. Here employees and their dependents receive medical coverage and are beneficiaries of the policy. Thus, health insurance meaning for different individuals can differ as per the plan.
Meaning of medical insurance plan:
Health insurance meaning is easy to understand. Health insurance is an umbrella term for any insurance plan that offers financial support when you face a medical issue covered under the policy.
For example, a plan that pays for the entire treatment of cancer, this is the health insurance definition for a Critical Illness Policy.
Significance of health insurance policy:
Technically, a health insurance policy is a legal contract between you and the insurance company. It highlights your policy’s sum insured amount, inclusions, exclusions, duration, benefits, etc. The contract also includes terms and conditions under which shall cover the medical expenses.
Scope of coverage:
Your all-inclusive medical insurance covers hospitalisation costs, ICU charges, daycare procedures, critical illnesses, home treatment, AYUSH treatment, ambulance charges, amongst others. However, the scope of coverage will depend on the insurer and the type of plan you select.
What are the benefits of a health insurance policy in India?
As per the study by the Public Health Foundation of India, approx 55 mn, i.e. 4% of India's population, were pushed towards poverty due to high out-of-pocket expenses in 2017.
We don’t want to scare you. However, not having the right health plan in place can lead to financial and emotional stress.
So even though medical insurance is not mandatory like motor insurance in India, ideally, everyone should buy an all-inclusive health plan to save hospitalisation costs, stay worry-free and reduce out-of-pocket expenses.