What is health Insurance

Health insurance is an agreement whereby the insurance company agrees to undertake a guarantee of compensation for medical expenses in case the insured falls ill or meets with an accident which leads to hospitalization of the insured. Generally, insurance companies have tie-ups with the leading hospitals so as to provide cashless treatment to the insured. In case the insurance company has no tie-ups with the hospital, they reimburse the cost of expenses incurred by the insured. The government also promotes health insurance by providing a deduction from income tax.

Importance of Health Insurance

Buying a health insurance policy for yourself and your family is important because medical care is expensive, especially in the private sector. Hospitalization can burn a hole in your pocket and derail your finances. It will become even tough, if the person who brings in the money, is now in a hospital bed. All this can be avoided by just paying a small annual premium which would lessen your stress in case of medical emergencies.

A good health insurance policy would usually cover expenses made towards doctor consultation fees, costs towards medical tests, ambulance charges, hospitalization costs and even post-hospitalization recovery costs to a certain extent.

Benefits of Having a Health Insurance Policy

1. Cashless Treatment: 

If you are insured, you can get cashless treatments as your insurance company would work in collaboration with various hospital networks.

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2. Pre and post hospitalization cost coverage: 

The insurance policy also covers pre and post-hospitalization charges up to the period of 60 days, depending on the insurance plans purchased.

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3. Transportation Charges: 

The insurance policy also covers the amount paid to ambulance towards the transportation of insured.

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4. No Claim Bonus (NCB):

This is the bonus element which is paid to the insured if the insured does not file a claim for any treatment in the previous year.

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5. Medical Checkup: 

The insurance policy also provides options for health checkups. Free health checkup is also provided by some insurers based on your previous NCBs.

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6. Room Rent: 

The insurance policy also covers room expenses depending on the premium being paid by the insured.  

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7. Tax Benefit: 

Premium paid on Health insurance is tax-deductible under section 80D of the Income Tax Act.

Tax benefit of Health Insurance

The amount you pay towards health insurance premium claimed as a tax-saving deduction under Section 80D. You can claim ₹25,000 annually for a health insurance policy for yourself. If you also pay the premium for a health insurance policy for your parents, you can claim up to ₹30,000 for the same as well.

Earning money is not at all useful if you don’t have a life. Think about yourself and your family and the importance of life. You know the importance and benefits of having a Health Insurance Policy. Start one, if you haven’t already.