COVID induced lockdowns, cases spiking, new variants coming up to cause more trouble, and mass pay cuts plus job losses.?All these?pretty much sum up what we all have been going through since the COVID-19 pandemic struck about two years ago. Isn't it?
While there¡¯s no doubt that the pandemic has impacted all of us in some way or the other, it's those who were not financially ready and did not have health insurance, who were worst impacted.
And if the deadly Covid-19 pandemic, which has shown how a single hospitalization can wipe out your lifelong savings in the absence of health insurance, hasn't been the biggest wake-up call for those who do not have health insurance yet, then perhaps what will??
So if you haven't taken health insurance yet, chances are high that you haven't understood the importance of health insurance and its associated benefits yet.
Read on as we unfold the multiple benefits of purchasing health insurance right away.
Also Read:?Lifelong Money Lessons That COVID Lockdown Taught Us
Contrary to what many people think, health insurance policies are mostly not just limited to hospital bills. Most health insurance policies tend to generally offer coverage for both pre as well as post-hospitalization expenses, subject to the pre-specified limit and duration.?
These can include ambulance cost, transportation cost, hospital stay cost, medical bills, procedure cost, post-procedure care expenses for recovery, etc. All this helps the policyholder in ensuring that the complete medical assistance and expenses are taken care of at all stages of treatment, i.e. pre-, during and post-hospitalization.
The product portfolio for most health insurance companies today is not limited to just the basic health insurance plans. And instead, there is in fact a wide range of policies suited for varying target consumers, depending upon their affordability, claim cover, included expenses, waiting period, flexibility, number of dependents etc.?
Although the range and types of plans differ from issuer to issuer, the commonly offered ones include Individual Health Insurance, Family Floater Health Insurance Plan, Senior Citizen Health Insurance Plan, Critical Illness Insurance Plan, Maternity Health Insurance Plan, Personal Accident Plan, etc.?
Make sure to have a thorough look at the different insurers and their medical insurance plans in order to choose the most suitable one as per your health and financial needs.
Also Read:?5 Money Mistakes All Millennials Should Avoid in 2022
One more key element from which you can benefit to a great extent is the availability of add-on/riders on top of your purchased policy. The choice is usually open at the time of purchasing and renewal, aimed to make the overall plan both customized and comprehensive.?
Here, it's important to keep in mind that the basic plans, as their name suggests, tend to usually include basic coverages for hospitalization, daycare procedures, etc, whereas including riders/add-ons gives access to other special or extra features and services like critical illness cover, daily hospital cash, health coach, etc, but at an extra premium.
As far as the top-up facility is concerned, it is often termed as an economical option to give a boost to your existing health cover, vis-a-vis increasing the sum insured of base policy or buying a new policy altogether.?
So, on top of your already purchased base policy, you can opt for a top-up or even super top-up as well, whose benefits will kick in to cover hospitalization costs after your threshold limit (known as deductible) of the regular plan gets exhausted. For the uninitiated, a deductible is that portion of the claim amount which is not covered by the insurer and has to be paid by the policyholder.?
As per the data published recently by the?National Family Health Survey, India 2019-2021 last month, just about 40% of Indian households had any usual member covered under a health insurance/financing scheme.?
This in itself shows the high percentage of India¡¯s population which is not under the umbrella of any health insurance/finance scheme. And it's likely that besides the lack of awareness, the unaffordability or inability to pay the premium as a lump sum is what makes most people step back from purchasing health insurance.
That's exactly where the IRDAI (Insurance Regulatory and Development Authority of India) has stepped in the past two years or so, by directing insurance companies to start accepting premium payments in instalments in?2019?and?2020, like monthly EMI or quarterly, half-yearly payments, besides the already present option of annual lump sum payment.
This way, those who were otherwise unable to purchase the health insurance due to unaffordability, can pay smaller instalments instead of totally shunning the idea of purchasing the policy. Hence, when purchasing health insurance, you can select the periodicity of payment of premium as per your affordability and preference.
Also Read:?Omicron Surge: 10 Indian States Projected To Be Worst-Hit By Rising Covid-19 Cases
One of the biggest and crucial benefits of health insurance policies lies in the presence of cashless claims facilities. For the uninitiated, a cashless claim facility implies that the medical bills for treatment in the network hospitals will directly be paid by the insurance company to the hospital, thus doing away with the need for you to step in and pay for it.?
However, remember that only the eligibility expenses up to the limits prescribed under the health insurance policy would be settled directly between the network hospital and the insurance company. Anything beyond that has to be borne by you, the policyholder.
And given that nowadays many health insurers have a comprehensive list of network hospitals that provide the advantage of cashless hospitalization to facilitate quick and timely treatment, it becomes imperative for you to compare the benefits, reach, process, claim settlement ratio, etc of varying insurers before zeroing in on any.
Make sure that this cashless claim facility is present, otherwise, you might get stuck with the old and traditional claim reimbursement processes, wherein you have to first clear the hospital dues and then get the dues reimbursed from the insurer, which is not just a tedious but time taking process as well, which at worse often even lead to failure in getting timely treatment due to inability to first pay the bill from your pocket (before getting it reimbursed later).
Also Read:?Term Insurance Premiums To Pinch You More Soon - Here¡¯s What To Do
Another health insurance benefit you cannot afford to ignore, is the No Claim Bonus (NCB) element. Although health insurance plans are usually renewed annually via payment of the due insurance premium, you get entitled to receive NCB if you do not file any claim in that entire previous year.?
And this NCB is mostly translated into either of these 2 forms. One is into a higher sum assured at the same existing premium amount, termed as cumulative bonus, or second one in the form of discounted premium, without changing the cover amount. So, the NCB is basically a form of reward by the insurer for those who remain fit and do not file any claim in that year!
This is probably amongst the prime benefits of health insurance which often drives many people towards purchasing it. After all, tax saving is something everyone who falls in the taxable income bracket, wishes to do. Although there is no harm if tax benefits are what drive you towards purchasing health insurance, you must make sure that you do not buy just any health insurance policy for the sake of availing tax benefits. Tax benefits are aimed to act as an impetus to make you purchase a health insurance policy for yourself and your loved ones.?
The selection of the right insurance plan and insurer should be given utmost importance during the purchase, basis factors like claim settlement ratio, premium payment options, range of insurance plans, premium amount, network hospitals, availability of add-ons/riders, cashless claim facility etc.
As far as the tax benefits are concerned, the premium paid towards self, spouse, dependent children, and parents can be claimed as tax deduction under Section 80D of the Income Tax Act, for varying amounts. The deduction can also be claimed for top-up health plans and critical illness plans. But make sure the premium is paid in any mode other than cash, like through card, net banking, UPI etc.
The premium paid towards health insurance for self, spouse, and dependent children can be claimed as a tax deduction of up to ? 25,000 per year, and an additional ? 25,000 can be claimed for parents under 60 years of age, totalling to the eligible claim of premium payment of up to ?50,000 in a year.?
And in case your parents are aged above 60, i.e they are senior citizens, the amount gets further hiked to ?50,000 for parents¡¯ premium, hence totaling to ?75,000 eligible as deduction claim per year. Moreover, if insured individuals and parents, all are aged 60 or above, then the claim amount is ?50,000 for self, spouse, children, and another ?50,000 for parents, hence totalling to ?1 lakh eligibility for tax deduction per year under Section 80D.
Also Read:?Worth Explains - Why A Term Plan Is The Only Life Insurance You Need
For more of such interesting financial content,?click here.
Click here?to download CRED.