What is Health Insurance?

Health insurance gives us the financial security to meet health related contingencies. Due to changing lifestyles, health issues have acquired a completely new dimension, thus becoming more complex in nature. It becomes imperative to have a health insurance plan which will ensure that no illness impacts our financial independence.

Health insurance is popularly known as Medical Insurance or Mediclaim. The concept of health insurance is relatively new in India but its awareness is growing at a fast pace. Health care costs have seen a phenomenal rise in the recent times. This has led the customers to insure not only themselves but their family members also.

Typically health insurance plans are available in two formats - individual and group plans. In an individual policy you are personally the owner of the policy. While in a group plan, the sponsor pays the premium for the policy and the people covered under it are called its insured members. The latter is mostly provided by employers to its employees.

Types of Health Insurance

Let us discuss the types of medical insurance available in the market.

  • Medical Insurance
    This is typically a hospitalization cover and reimbursement of the medical expenses incurred in respect of covered disease or surgery while the insured was admitted in the hospital as a patient. These are health policies that reimburse you the actual hospitalization cost for treatment of any disease.

  • Critical Illness Insurance
    Critical Illness plan insures you against the risk of grave illnesses. This gives you the same security of knowing that a guaranteed cash sum will be paid if the unexpected happens and you are diagnosed with any one of the critical illness listed. In this health insurance plan, the insured receives a lump sum amount within a few days of getting diagnosed with the critical illness. Once this lump sum is paid, the plan ceases to exist.

Important Terms one must know

  • Health Card - A health card is a card that comes along with the Policy. It is similar to an Identity card. This card entitles you to avail cashless hospitalisation facility at any of the network hospitals.

  • TPA - A Third Party Administrator is an organization that processes insurance claims. Typically insurance companies outsource the administration of the claims processing to these entities known as TPA.

 

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