Helth Insurance

Health Insurance Benefits & Categories

Atul was a worried man. His wife had just been admitted to the hospital for severe stomach pain. The doctors had advised an immediate operation, as otherwise her condition might worsen.

Apart from his wife’s health, what was also giving Atul the shivers was that his emergency fund may not be enough to fund the operation costs, leave aside the cost that he would have to incur for his wife’s stay in the hospital after the operation.

What if you were Atul? 

God forbid you get into a situation like Atul. What will you do?

Now, why think of that situation? Simply buy a health insurance policy to secure your and your family’s healthcare needs in case a situation arises in the future?

Before we get into the benefits of health insurance, let us briefly look at the two categories of health insurance products:

1. Mediclaim Policies: Also known as indemnity health plans, a mediclaim policy reimburses the expenses incurred on hospitalisation as per the actual hospital bill amount. If you are covered under such a policy, you can get your hospitalisation expenses depending on your claim details, terms/conditions of the policy and coverage amount. These types of Health plans are sold by general insurance companies. Although they may be marginally cheaper than other health insurance products, payout is not guaranteed. 

2. Fixed benefit health insurance plans: Unlike indemnity plans, these plans provide guaranteed fixed benefit payouts irrespective of the actual hospital bill amount. These plans focus on helping the insured meet the cost of two major heads of medical expenses – hospital room charges and cost of surgery. The plan has a fixed payout for each day of hospitalisation and a fixed payout for different categories of surgeries. These are called fixed payouts because the insured, in the case of a valid claim, will get this amount from the insurance company, irrespective of the actual expense incurred.

Benefits of health insurance

Here are a few benefits that accrue to you when you buy health insurance for yourself and your family:

1.   Financial security: Treat a health insurance policy as a contingency plan made to make things easier when the going gets tough for you and your family in terms of health issues. A health insurance plan like "family floater" can safeguard you and your family together against medical costs, plus it also comes cheap as compared to policies taken on individual names.

Some policies also take care of the insured’s recovery expenses. Furthermore, most health insurance policies these days include other bonus features such as "cashless hospitalisation" and free health check-ups.

Imagine dealing with all this without any health insurance.

2.   Best medical care: As health insurance companies pay for the hospital treatment (up to the insured amount), you can get yourself or a family member (who is also covered under the policy) in the best hospital in your city. Most large health insurance companies are tied up with top notch health care providers across the country. As such, you have at your disposal the best doctors, hospital and clinics, if the need arises.

3.  Covers your savings: If you have been in a medical emergency situation like Atul (whom we talked about at the start of this article), you realise how emotionally challenging such a time is. The problem worsens in case you don’t have a health insurance to take care of the expensive hospitalisation expenses, which may lead you to pull out money from your savings. Health insurance acts like a saviour during emergency situations, which can strike anytime. It ensures that your savings/investment plan remains unaltered.

4.   Peace of mind: Having health insurance frees you from the stress of any potential health emergency. Stress, as you know, is a big killer. The fact that a health insurance policy can help you get over this demon says a lot about the importance of such a policy in your life.

What are the different types of Health Insurance?

Basically, there are three types of Health Insurance covers:

Individual Health Insurance

This is the simplest and most popular type of health insurance policy available in the market. It covers the hospitalisation and surgery expenses for an individual for up to the cover amount (sum assured). The premium you pay on such a policy is dependent on the cover amount.

Family Floater

As the name suggests, “family floater” safeguards an entire family under a single policy. The cover amount floats among the family members i.e. each family member under the policy is covered up to the total cover amount. The biggest advantage of a family floater policy is that it’s cheap as compared to buying individual policy on each member’s name. 

Unit Linked Health Plan

Taking cues from the success of ULIPs, life insurance companies have introduced Unit Linked Health Plans. Such plans combine health insurance with investment and pay back an amount at the end of the insurance period. The returns from such plans are dependent on the market performance.

Overall, when you have your and your family’s health covered by a health insurance policy, you are ready to face life's challenges with enhanced vigour. 

Click here to know more about products offered by AEGON Life.

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