What Is Health Insurance?

Health Insurance is a necessity; especially after witnessing a global pandemic that led to a widespread rupture of healthcare systems around the world. 

A health insurance plan will cover the medical and surgical expenses for you and your family members. The coverage terms and conditions may vary depending on the health insurance plan purchased. Normally, the health insurance plan you invest in will reimburse all your expenses related to injury or illness or will settle the hospital bill directly.  

However, with every different individual comes a new health insurance requirement. To fulfil every individual’s healthcare needs, health insurance providers have designed a wide range of insurance products. 

In this article, we explore the different types of health insurance plans along with the importance of the same. 

What Are The Common Types Of Health Insurance? 

With different health issues around us, arises the need for different health insurance needs. Let us help you to find the right one for you! 

1. Individual Health Insurance 

• Definition 

Individual health insurance policy covers you against hospitalisation costs and medical bills. Individual health insurance can be purchased for self, spouse, dependent children, or parents, separately.

A good example of an individual health plan is purchasing a 5 lakhs sum insured individual health insurance policy for your spouse, and yourself separately.  However, this will result in a higher health insurance premium.

• Who Can Buy? 

Any individual between the ages of 18 to 65 years is eligible to purchase an individual health insurance plan 

2. Family Floater Health Insurance

• Definition 

A family floater health insurance will allow you to cover multiple family members under a single health plan and they are eligible to share the sum insured. Family floater health plans have cheaper health insurance premiums as compared to individual health insurance. 

For example, if you purchase a family floater health insurance with INR 8 L sum insured you can claim up to INR 8 lakhs in a single policy year. 

• Who Can Buy? 

Family floater health insurance plans are ideal for nuclear families wherein individuals between the ages of 18 to 65 years and dependent children as young as 1 day can be covered. 

3. Senior Citizen Health Insurance 

• Definition 

Worried about providing health insurance for your elderly parents? Turn towards a senior citizen health insurance plan. These health insurance plans are specifically designed to cater to the healthcare needs and medical requirements of senior citizens. 

Additional features like domiciliary hospitalisations, home care, and wellness benefits are a part of senior citizen health plans. 

• Who Can Buy? 

Individuals between the ages of 60 to 75 years are eligible for senior citizen health insurance 

4. Health Insurance For Critical Illness 

• Definition 

Critical illness health insurance is designed to cover you against life-threatening ailments like cancer, heart ailments, kidney failure, stroke, etc. Critical illnesses are expensive and have the potential to drain your hard-earned savings. 

• Who Can Buy? 

If you have a family history of critical illnesses, you must invest in critical illness health insurance. Anyone who is between the ages of 18 to 65 years is eligible to purchase a critical illness plan. 

5. Group Health Insurance 

• Definition 

Group health insurance plans are different from all other categories. Group health insurance plans can be purchased by an organisation for its employees, or simply by a housing society for its residents. The plans are affordable as compared to all other health insurance plans but only cover you for basic health ailments. 

• Who Can Buy? 

To avail of group health insurance you must have at least 20 members in an organisation. However, as per IRDAI, micro-insurance plans can also be purchased for less than 5 employees or group members 

5 Reasons Why You Must Invest In Health Insurance? 

Purchasing a health insurance plan is an ideal choice given the increasing number of lifestyle diseases we are prone to. Let us talk about the importance of health insurance and why you should invest in one. 

1. Combat Medical Inflation 

When investing in a health insurance plan, you safeguard your life savings from unforeseen medical care expenses. Medical inflation has led to expensive health care and a health insurance plan is the best solution to combat the same. 

An accidental hospitalisation itself can cost you up to 1 Lakh out of pocket if you did not invest in a health insurance plan previously.

2. Cover Against Life-Threatening Illnesses 

The financial burden of undergoing a critical illness treatment can drain your life savings and disrupt your financial status. Investing in the best health insurance will allow you to focus on recovery in case you are undergoing treatment for any critical illness. 

3. Avail Tax Benefits 

Insurance holders enjoy tax exemptions up to INR 50,000 and INR 25,000 under section 80D as per the existing Income Tax Act, of 1961. A health insurance plan is an excellent tax-saving tool. 

4. Best Medical Care For Your Family 

Health insurance plans for families ensure the best medical care for your family members in case of planned and unplanned hospitalisations. It ensures that all family members receive premier medical care in terms of modern treatments, AYUSH treatments, and more. 

5. Value-added Benefits 

When investing in a health insurance plan, you are entitled to multiple value-added benefits like no-claim bonuses, restoration bonuses, wellness points, renewal premium discounts, and more which enhance the overall health insurance purchase experience and keep you motivated to live a healthy lifestyle. 

The Final Verdict 

Health Insurance is the key to your financial safety in the long run. Paying medical bills from your savings in this day and age is practically the path to financial challenges in the future. This is why it is important not only to invest in the best health insurance plan but also to understand the type of health insurance suitable for you. 

PolicyX.com insurance experts are your go-to guides for all things insurance. Understand the types of health insurance in the market, and pick the one that fits the bill for you. Learn the latest news on insurance, compare the right health plans, and understand how health insurance can be a powerful financial tool for you with PolicyX.com, India’s leading insurance aggregator.