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An insurance survey states that only 3% of the total Indian population had health insurance coverage. Only 2 percent of total health expenditure is funded by public/social health insurance and 18 per cent is funded by government budget. India spends about 4.9% of GDP on health. The per capita total expenditure on health in India is US$ 23, of which per capita Government expenditure on health is only US$ 4. So private expenditure on health is more that is from personal savings of the individual.
As the cost of medical treatment is rising like anything and at the same time due to increase in middle class families, it is estimated that the demand for health insurance policies are rising at the rate of 25 per cent in India. Before going to the health insurance plan, one should determine the health care needs that may vary on several factors like, age, family needs, financial conditions etc. it is important to consider the following points before going to the health insurance policy.
Individual health insurance v/s Family floater
Health insurance is a hospitalization cover and reimburse the medical expenses of the covered disease or surgery when the insured is admitted in the hospital .There are various types of medical insurance available in the market like, individual medical insurance, group medical insurance and overseas medical insurance. Family floater and individual health insurance are the two options available for customers while seeking personal health coverage. Family floater is more beneficial as the same is less expensive and family members are less likely to fall sick together. At the same time, there is a higher coverage for family member who may need it in any eventuality.
Critical illness insurance
Critical illness plan insures against the risk of serious illness. If the insured is diagnosed with any critical illness, he/she receives a lump sum assured amount within a specified period of time of a illness being diagnosed. The illness may be like, cancer, coronary artery bypass surgery, first time heart attack stroke, paralysis e.t.c. The above mentioned illness is not exhaustive list and the same is vary from insurance plan to plan. It is always suggested to include critical illness cover for better health care planning.
Importance of health insurance
The following benefits makes one understand how importance to go for health insurance plan at the present scenario:
a) Health insurance protect from the risk of uncertain bills for health care which is usually huge, that arises all of a sudden.
b) Apart from hospitalization and medical bills, it also covers disability and custodial bills.
c) Health insurance provides financial security and peace of mind at all the times.
d) Proper health coverage can help the insured to go for quality care as he/she is a member of coordinated health plan.
Features of health insurance
It is important to know some of the main features of health insurance plan.
Ø Hospitalization cash benefit entitles the client to cash benefits for every completed day of hospitalization.
Ø There are network hospitals tied up with insurance companies. Those network hospitals accept medical cards issued by insurance companies to the insured and provide cashless facility at the time of emergency.
Ø Some insurance policies also cover ambulance charges.
Ø Most of the insurance policies cover upto 60 to 90 days pre and post hospitalization expenses.
Ø There is also a facility of free health check-up under some health insurance policies for the well being of the individual if there is no claim made for certain number of years.
Ø Most of the health insurance policies provide no-claim bonus if there was no claim in the previous year.
Tax benefits
There are various tax benefits available for the one who goes for health insurance policies.
a) Deduction under section 80D for health insurance premiums: All Individuals and HUFs are eligible for deduction under section 80D up to Rs 15000 for self, spouse and the dependent children for the premiums paid in respect of health insurance policies . For the senior citizen, an additional exemption of Rs 5000 is available.
b) Deduction under section 80DD for medical treatment of handicapped: This deduction is applicable for expenditure incurred in respect of assessee himself or his dependent spouse,children,parents,brothers/sisters. This deduction available upto Rs 50,000 or actual expenditure incurred, whichever is less. Deduction of RS 100,000 is allowed in case where the dependent has the disability of more than 80 per cent.
c) Deduction under section 80DDB for treatment of specified diseases: The insured can avail tax benefit if they have incurred costs for treatment of special diseases. It is applicable for treatment of self, spouse, children, siblings and parents wholly dependent. For individual assessee less than 65 years of age, a deduction is actual amount paid or Rs 40000, whichever is lesser. In case the amount is incurred is in respect of a person who is a senior citizen then actual amount or Rs 60000, whichever is lesser.
Some of the precautions to be taken before going to the health insurance policies:
Ø Check whether cashless facility is available in health insurance policy. Cashless facility means, at the time of emergency one doesn’t have to rush for arranging cash to deposit at the hospital. This facility is available only in specific list of hospitals.
Ø Most of the health insurance policies do not cover many diseases for specific period like, for the first two years.
Ø Most of the insurance policies have some limit up to which they will cover specific expenses.
Ø Many insurance companies do not renew policy beyond a particular age. So it is good to go for a policy that provides for renewal even at older age as at that time one will need it the most.
Disclaimer: The information given above are the result of personal readings of related geniuine magazines and personal understanding of the subject matter. This is written to make the readers understand, how importance to plan for health care at present scenario in india. However, this blog is not responsible for any error or inaccuracy in the same.
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