Before I begin, let me be clear as to, what this article does not talk about. It does not explain what health insurance is and neither does it coax you into buying it, if you have not opted for it already.
This article answers certain questions that are pertinent and affect your decision whether to buy Health insurance or not to buy health insurance.
Your neighbor who has just got his entire family insured for health, keeps on pestering you to buy it too and at the slightest opportunity bombards you with the positives and benefits of getting health insurance for yourself and your family. In this article, I keep myself from being your pesky neighbor, and simply keep the facts in front of you and leave it to you to decide.
Here, although I assume that your basics pertaining to health insurance are in place, yet, for the uninitiated,
Here is a quick look at what we mean when we say, “Health insurance”
Firstly, when you think of health insurance, you are clearly not thinking about life insurance. These are two distinctly different things, in the sense that while health insurance covers the expenses you might incur as a matter of hospitalization, in case you are affected by a disease, life insurance protects your family (or dependents) from financial loss that may arise in the event of your untimely death/or if something happens to you.
Also, in case of life insurance, the payout is made only after the death of the insured or at the maturity of the policy. In Health Insurance there is no payout made at maturity and the policy needs to be renewed annually.
Now let’s look at some of the most commonly and important questions associated with health insurance. Note that this is not an exhaustive list.
What are the minimum and maximum policy durations?
Health insurance comes under the General Insurance, and all health insurance policies are issued for a period of one year only. The maximum period can be two years, if a company issues a two year policy. But it is important to keep renewing your policy at the end of the period, either one or two years.
Because if the policy is not renewed in time, it may lapse, and you will have to wait for another four years for your claims to be redeemed, when you opt for another health insurance policy with a different company.
Does health insurance cover diagnostic charges like X- ray, MRI or ultrasound?
Health Insurance covers the charges for all tests, medical expenses and treatments, if they are incurred as a result of the patient’s stay in the hospital for at least one night. Health insurance in India mainly connotes, hospitalization, hence, diagnostic tests like X- ray, MRI, blood tests etc are paid only if they have been done in the hospital during the patient’s stay there.
But it is important to know that tests are not covered unless they lead to hospitalization or unless recommended by a doctor as a part of the treatment, and all tests before hospitalization can be charged in Pre hospitalization expenses.
Can there possibly be any situation in which my health related expenses may not be covered?
Until 30 days from the date on which the health insurance policy is issued to you, your claims will not be payable. However, if you undergo emergency hospitalization as a result of an accident, then the 30 day waiting period is waived off and your expenses will be reimbursed. All the more, this 30 day waiting period is applicable at the start of the policy only, and not at times of policy renewal. Besides, if you claim as a result of a pre existing disease, then you will have to wait until the time your pre-existing disease is covered (which can be either 2 years or four years depending on Policy wordings), to get your claim reimbursed.
Can I get my money back in case I choose to cancel the policy after some time of buying it?
To cancel the policy is your decision, and you may do so at any time after buying the policy. However, when you decide to cancel your health insurance policy, the company may incur cancellation charges - which differ from company to company. For instance, if you cancel the policy within 3 months of buying it, the company may deduct 25% of your premium amount and pay you the remaining 75%. If you cancel the policy within 6 months, the company may deduct 50% of the premium amount and pay you the remaining 50% and so on. You will find these in the policy terms and conditions in the policy document of the various health insurance companies.
If I buy health insurance, will I be able to avail of a tax benefit?
Yes. Section 80D of the income tax act 1961, ensures that there is a tax benefit available to everyone who has bought a health insurance policy. Every tax payer can avail an annual deduction upto Rs. 15,000 from taxable income for payment towards premium of his/her simple health insurance policy for self and dependants. For senior citizens, this deduction is upto Rs. 20,000.
The importance of simple health insurance today is immense, and more so, when a research suggests Asians will be the highest number of patients suffering from heart attacks and other diseases, can anyone afford not to have health insurance?