What is health insurance? Why it is Important

Health insurance is very well known in the world of insurance. Almost all people in the developed world have this insurance through which the insured gets free health care. 

Free does not mean free treatment from the hospital. Rather, the insurance company pays all the medical expenses to the hospital on behalf of the insured.

As a result, there is no risk of the policyholder stopping treatment due to a lack of funds. 

Health insurance is compulsory in some countries of the world. In countries where there are no government guidelines, many people take out health insurance on their own initiative so that they don't have to worry about medical expenses in times of need.

What is health insurance?

What is health insurance
Health insurance is a contract made with an insurance company to cover the medical expenses of an individual. General medical expenses major road accidents and other medical expenses are covered through this insurance. 

However, depending on the type of contract, this insurance covers the entire cost of treatment, half or a certain part of it.

Under health insurance, medical expenses, surgical expenses, and sometimes even dental expenses are covered by the insurance company. 

Although this type of insurance is mostly individual-centric, sometimes this insurance is taken at the group level as well. In particular, health insurance is provided as a package for the executives and employees of various companies.

The package mentions what medical treatment the employees of the office or business will receive in some cases. 

Accordingly, the insurance company is obliged to bear the medical expenses of the employees. However, in the case of package insurance, most contracts are partial cost-bearing. 

That is, in this type of contract, the company's executives and employees bear half of the medical expenses and the insurance company bears half of the expenses.

Why do health insurance?

Medical expenses are very high in almost all countries across the world. And in our country, doctors are often called cut-throat doctors. 

The bill of the diagnosis section of the hospital turns everyone's head. Everyone knows the reason behind the establishment of hospitals and diagnostic centers like umbrellas in the city.

So, understand that many cannot afford the medical burden. So, through health insurance, you can easily hand over this burden to the insurance company. 

Some hospitals often have separate contracts with insurance companies. And according to the agreement, they get various medical exemptions. 

Whether the insurance company gives a discount or not, the insured person or organization gets the beneficial benefits of health insurance.

Many people think that health insurance can be availed only in case of illness. In fact, health insurance is not just about this. 

An insured can avail of various health benefits apart from sickness as per his contract. Like, such as regular doctor visits, various checkups, etc.

You see, if a person goes to the doctor frequently and has various types of health check-ups apart from getting sick, his chances of getting sick are reduced to a great extent. 

Therefore, health insurance is necessary for staying healthy, and for the treatment of illness, this insurance is of immense importance.

What is required for health insurance?

  1. Passport size photograph
  2. Proof of Age (Birth Certificate, NID Card, Driving License, etc.)
  3. Identity Card (Aadhaar Card, PAN Card, NID Card, etc.)
  4. Address proof (electricity bill, ration card, driving license, etc.)
  5. In some cases medical check-i.e. health examination (generally above 45 years of age may be required for self-insurance)

What are the types of health insurance?

1. Individual Health Insurance 

This type of health insurance can be taken only for yourself, in this case, the premium will be determined according to your age.

2. Family Health Insurance Plan

You can get this type of health insurance for yourself and the entire family, in this case, you will get the same fixed sum of money as coverage that any or all of the family can get together.

3. Senior Citizen Health insurance Plan

This health insurance is generally for people over 60 years old.

4. Maternity Health Insurance Plan

This insurance is for those who are expecting a child or who have already fixed the time to have a child. Pre and postnatal care, and newborn delivery expenses can be covered by this type of policy.

5. Unit Linked Health Plan

If you want to have insurance and savings at the same time, this type of health insurance needs to be taken.

6. Personal Accident Plan

This type of health insurance can be taken so that you do not have to bear hospital expenses due to an accidental accident.

7. Surgery and Critical Illness Insurance Plan

In the case of various critical diseases like – cancer, kidney failure, etc. the cost of treatment becomes high, in that case, this type of health insurance is needed.

How to claim health insurance?

Health insurance is of no use if you don't claim your dues from your insurance company on time.

There are generally two types of procedures for making a health insurance claim –

Cashless claim process

This method is currently popular and recommended, in this case, you will give all your health insurance information to the hospital and at the time of discharge, the hospital will send the bill of all expenses to the insurance company, if the insurance company examines it and approves the claim, they will pay the hospital expenses, that is, the money transaction will be between the hospital and the insurance company. 

You will safely return home with or without treatment.

Reimbursement Claim Process

This is the old method, in this case, you pay all the hospital expenses from your own pocket after the treatment and send all the bills to the insurance company, if they check everything and approve the claim, you will get that money from the insurance company.

Think before getting health insurance

Pre/post-hospitalization coverage

Understand whether your health insurance will cover various pre- and post-treatment expenses (eg – various tests, doctor visits, etc.).

The co-payment clause

Co-pay is a system where you are obliged to pay a certain percentage of your total hospital bill, the rest will come from the health insurance, if your insurance has a co-pay, take health insurance only if you know how much you have to bear. 

Better to get health insurance with no co-pay.

Network hospitals

Be sure to know how many hospitals in your area are covered by your health insurance company's network and how many of them offer cashless facilities.

Room rent limit on the health insurance plan

There is no limit on room rent so try to get health insurance, in many cases the room rent i.e. room rent is fixed, in which case you can't get more than that in the hospital, or even if you can get it, you will have to spend a lot of extra money on your total bill.

Claim Settlement Ratio

Claim Settlement Ratio = (Number of claims approved/Number of claims received) * 100

Before taking any insurance it is important to check the claim settlement ratio of the company. It means how many people have claimed their due insurance money from that company in a given year and how many of them have been settled by the company.

Suppose a total of 100 people have claimed their health insurance money in a year and out of them 97 people have actually received money from the company, then the claim settlement ratio of that health insurance company is 97%.

Erm will not take any health insurance that has a claim settlement ratio of less than 95%

Before taking health insurance do not hide any information related to your health, disclose all your previous illnesses and any habits that may deteriorate your health.

Because if for any reason your claim is rejected at the time of need then there is no point in taking health insurance. No more

Incurred Claim Ratio

In health insurance, it is more important than the claim settlement ratio.

It is also very important to look at how much money an insurance company has earned from premiums and how much money it has paid in claims compared to that. Health insurance with an incurred claim ratio between 60% to 90% is acceptable.

Sub – limit 

Many health insurances have a sub-limit ie a fixed limit for the treatment of various diseases. For example – in case of knee replacement, cardiovascular disease, etc. you will get a certain amount of money.

Suppose your total insurance coverage is 1000 Dollars, now you may have spent 1000 Dollars for knee replacement, now you are thinking that 1000 Dollars is much less than Tk 1500 Dollars, then surely you can claim the entire amount, but that will not happen if there is a sub-limit, it would have been If the sub-limit of that treatment is Rs 2 lakh then you will get only that and you will have to spend the rest yourself.

Both co-pay or sub-limit will reduce your premium but ultimately the loss is yours so take insurance with this in mind.

Restoration Benefits

Let's say your family insurance coverage is 5 lakhs and you are hospitalized costing 3 lakhs and you claim it now if in the same year or in a very short period if someone in your family needs to be hospitalized again, will your insurance company cover 500 dollars again? E will give or less than that?

Get 100% restoration Erm health insurance so that even if you go to the hospital multiple times, your whole family gets the same coverage.

Policy premium and sum insured

Understand very well how much coverage you want as your premium will be adjusted accordingly.

The waiting period

Know well how long you can claim the insurance money after taking the policy, the waiting period of different companies is different like 6 months for some and 1-2 years for some. 

Especially in the case of pre-existing disease, the waiting period is likely to be very long. So choose the health insurance that offers less waiting period.

Daycare procedures

In some cases, your treatment can be completed in one day. 

For example – In cataract surgery, make sure that the health insurance you are taking will provide coverage for this type of treatment.

Alternative treatments 

Find out whether your health insurance will cover non-allopathic treatments like homeopathy, or Ayurveda.

Coverage for new-age treatments 

Check whether your health insurance will provide coverage for various modern medical procedures (eg robotic surgery).

The availability of add-on covers 

Find out if you can increase your coverage with additional premiums as needed.

No – Claim Bonus

If you don't need the insurance money in a year, i.e. if you are not sick, know what benefits you will get, maybe you will get more coverage with the same premium next year or you will have to pay less premium for the same coverage.

Free health checkups every year 

Get health insurance that offers free full-body health checkups every year.

Maternity Benefits 

If you are thinking of having a child, you have to keep some money aside so you can take health insurance to cover this period of expenses, but in that case, your premium may increase a lot, so take this kind of benefit knowing whether it will really be profitable for you.

It may seem like a lot of trouble to see all this, but buying any insurance without considering everything is all to your detriment. So be aware and take time to get insurance.

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