With rising healthcare costs and expensive medical treatments, covering oneself and one's family against unforeseen hospitalization expenses is always a smart thing to do. A sudden illness or prolonged treatment can take its toll on your finances and throw a spanner into your regular savings and investment plans.

What is Medical Insurance?

Medical insurance is a plan that covers all the hospital expenses arising out of unforeseen hospitalization. A medical insurance policy offers to reimburse a pre-defined percentage of expenses incurred under on certain heads, such as doctor's consultations fees, pathological test, X-ray, hospitalization, operation theatre, medicine, follow-ups, etc.

Medical insurance can be availed on both individual and group (family) basis. The facility is also extended to employees as a part of their cost to the company.

Why does one need Medical Insurance?

  • Helps cover sudden medical expenses in times of emergencies like accidents or sudden illnesses
  • Several insurance companies also offer cashless settlements
  • Some policies offer coverage beyond hospitalization expenses to cover OPD-(Out Patient Department) expenses
  • One can also claim Income Tax deduction under Section 80D for the premium paid

Types of Medical Insurance

Various types of medical insurance policies are available in the market. An individual can choose a policy based on age, lifestyle, and other medical considerations.

Medical Insurance is sub-divided into two categories

 
Individual Mediclaim The Individual Mediclaim policy covers the hospitalization expenses for an individual up to the sum assured limit. The insurance premium is dependent on the sum assured value.
Family Floater policy Family Floater Policies are enhanced version of a Mediclaim policy. The sum assured value floats among the family members; i.e. each opted family member is covered under the policy, and expenses for the entire family, up to the sum assured limit, can be claimed. The premium (per person) for family floater plans is less than that for separate insurance cover for each family member.
Unit Linked Health Plans Health insurance companies have introduced Unit Linked Health Plans, too. Such plans combine health insurance with an investment plan and pay back an amount at the end of the insurance term. The returns are based on market performance. This is only recommended for people who have the risk-profile to invest in market-linked products.

How does it work?

When you decide to buy a Mediclaim policy, the insurance company examines your medical history to ascertain the risk involved in providing you the cover expected. Based on the same, a policy is extended to you, and you have to pay a regular premium for the same.

In case of a medical emergency/ expense, you have to furnish the corresponding bills and claim the amount from your insurance company. This ensures adequate financial backing during a time of illness or injury.

Features of a good Medical Insurance policy

  • Provides extensive coverage at the lowest price
  • Lifetime payouts for catastrophic illnesses
  • Hospitalization cover
  • Cashless claim
  • Tax benefits
  • Pre and Post-hospitalization expenses
  • Applicable across most hospitals (ideally the ones you generally go to)
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