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The A To Z Of Health Insurance

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By Author: Bhargav Baweja
Total Articles: 4
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While several factors contribute to the degree of security that one experiences, the financial aspect happens to be the most significant. Health insurance is considered by many as the first step towards financial planning. It essentially protects you from the phenomenal rate of medical inflation that we continuously experience in today's world.

What is Medical Insurance?

Health insurance can be defined as a policy that compensates the insured for the medical expenses incurred by them barring a few exclusions depending on the type of policy you take. It relies mainly upon the monthly premiums paid by its customers. As a policyholder, one is required to choose an insurance plan suitable to them and pay the associated monthly premium in order to avail the benefits. A range of insurance plans available may sometimes make the process a little tricky. However, this post offers you an understanding of the types of health insurance plans to make it easier for you to navigate your efforts.

Broadly, there are two types of plans available in India:

1.Indemnity Plans

Also called fee-for-service plans, these are the traditional form of health insurance where the insurer covers your hospitalisation expenses as this is the indemnity product. Your costs will be covered up to the sum insured. Indemnity plans also include a range of programs as listed below:
● Mediclaim policy: This policy compensates you for your in-patient expenses such as nursing, surgery, doctor’s fee, oxygen, anesthesia etc.
● Individual Insurance: If you happened to be hospitalised, this policy entitles you to claim the basic amount that you insured.
● Family Floater Plan: While this policy involves one premium to cover the entire family, the cover is shared amongst the members of the family. A family floater plan can include your spouse, kids, parents and even siblings and parents in law.
● Unit Linked Health Plans: Popularly known as ULIPs, these have the benefits of being both an investment and an insurance policy. The returns on investment are offered along with the insurance coverage.
● Group Mediclaim: These are now offered to employees of medium to large scale enterprises. This added benefit often helps to retain the employees.

2.Defined Benefit Plans

Under this type of insurance policy, a certain sum is paid to you on the insured event. Hence you can claim the guaranteed amount upon the diagnosis of the illness. These plans are often taken as an add-on along with indemnity plans. The plans included in the scope of defined benefit plans are as follows:
● Critical Illness Plan: This is the most popular policy under defined benefit plans. The insured is entitled to pre-decided amount irrespective of pre-or post-hospitalisation expenses. These help to minimise the burden of huge medical costs incurred by the policyholder at the time of an emergency.
● Personal Accident Plan: The insured or their family is entitled to a lump sum amount in case of accidental injury or death.
● Hospital Cash Benefit Plan: If the insured happens to be hospitalised, they are entitled to a daily cash allowance up to a pre-defined limit. This is separate from the actual hospitalisation expenses. This helps to cover the expenses that may not be covered under a typical medical insurance policy.

Now that you know what is health insurance and its types, the next step is to find the right kind of policy for you. It could also be a combination of 2 or more types of plans. Make sure you compare different policies before you pick one that is most suitable for you. Third-party portals help you compare and choose the best policy for you.

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