Frequently Asked Questions on Health Insurance

Health Insurance

What is Health Insurance ? Why do i need this ? Having Health Insurance gives you the opportunity to maintain your health by providing a low cost way to attend physician visits and buying affordable prescription drugs if needed.

Health Insurance is a contract with an Insurance Company, which agrees to pay some or all of your medical bills based on your coverage or the terms of your policy. So, here are the few frequently asked questions about Health Insurance.

1. What is the Difference between Life Insurance and Health Insurance?

Sol: Life Insurance and Health Insurance are not identical. They are different. Life Insurance protects the family dependents against any financial loss that may arise due to untimely death of the insured. The Insurance claim is paid to the nominee only on the death of the insured or on the completion of tenure of the policy.

In case of health insurance, you are protected against the unfortunate expenses that might occur due to your untimely illness or any accident. You are paid a claim on the happening of the event i.e illness, injury or accident as mentioned on the health insurance policy

2. I am working with Infosys. My employer covers me with Health Insurance. Do I need to buy a separate health insurance policy?

Sol: It is always advisable from our end that you must have your own health insurance policy because in case you unjoin your company after 5 years, you might lose your health insurance policy as you never knew that your new employer would provide you with health insurance policy or not. And during this transition period of changing jobs, you might lose out on your health insurance claim.

Secondly, the biggest problem while buying new health insurance or mediclaim policies is that you have to show your new health record to the medical insurance company while buying new policy again. And normally health insurance companies don’t cover pre existing diseases for first four years from the day you buy a new health policy. So buying a new policy might cause problem for you to get insurance claim in the initial four years of the Insurance policy.

3. What is cashless Health Insurance facility?

Sol : There are two types of claim settlements under health insurance, one is the cashless facility and the other one is the normal one where you put up an application to the insurance company and ask for a claim after you get discharged from the hospital.

Under cashless health insurance, the patient or the patient’s family doesn’t settle the hospital bills at the time of the discharge from the hospital, but the insurance claim settlement is done directly by the TPA (Third Party Administrator) on the behalf of the person who has bought the health insurance policy.

For this cashless health insurance facility, you need to take a prior approval from your TPA at the time when the policyholder is getting admitted to the hospital.

4. Do you need to have a Medical Check Up at the time of buying health insurance policy?

Sol : A detailed check up of your current health position would not only show that you are a low risk candidate in the eyes of the health insurance company, but it would also make your process of claim settlement much easier. You would find a lot of advertisements on the media asking you to buy insurance policies without any medical test. But you are requested not to get lured by such advertisements.

5. What are the tax benefits on Health Insurance premium payment?

Sol: Any tax payer who is paying health insurance premium for self or for his spouse or dependent children can get a tax deduction on health insurance premium of Rs 15000 per annum and Rs 20000 if he is paying for the premium of his parent who is senior citizen. So in case the tax payer is coming under 10% tax bracket, he would be able to save Rs 1500 or Rs 2000 as per the case may be.

6.What would Health Insurance Company pay for and when would it pay?

Sol: Health Insurance companies like HDFC Ergo in India covers for hospitalization expenses like illness & accidents. It is also responsible to pay you for the hospital room rentals and for medicines expenses which are billed. It also pays for pre-hospitalization expenses incurred due to any problem to a patient/insured immediately before he was hospitalized.

7. What should we check before we buy Health Insurance Policy?

Sol: We must look into list of hospitals in your area which are tied up with the insurance company. Make sure there is no such concept of co-pay of charges where the policy holder has to pay certain percentage of the expenses which are being spent on hospital.

Pre-existing disease clause is a major issue which one must look at while you credit health insurance company account. In normal cases, Health insurance company don’t pay you for first three years for pre-existing diseases.

8. Are there any advantages of sticking to one medical insurance company for long time?

Sol: The major point of advantage of sticking with one health insurance company is that normally pre-existing diseases are covered after 3 years of start date of policy with any company. So if you keep on doing new policies, you would be missing on to get cover for your pre-existing diseases in the first 3 years of policy inception.

About the Author

Vaibhav Sangli is an MBA Finance who loves to write on several topics including insurance and mutual funds and finding out different ways to earn and spend money.

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