Q. What is Health Insurance/Mediclaim?
A- Health Insurance/Mediclaim provides protection gainst the rising hospitalization costs. Mediclaim is a cover - given by an insurance company - which pays for the hospitalization expenses at a particular premium (cost), in case of a sudden illness, accident, surgery, or in case of other ailments covered under the policy. The insurance company provides either direct payment (cashless facility) or reimburses the expenses associated with illnesses and injuries.
Q. Is Health Insurance the same as Life Insurance?
A- No. Life Insurance protects your family (or dependents) from financial loss that may arise in the event of your untimely death/or if something happens to you. The payout is made only post the death of the person insured or at the maturity of the policy. Health Insurance protects you against ill health/diseases by covering the expenses you might incur (for treatment, diagnosis etc.) in case you are affected by disease or injury. There is no payout made at maturity. Health insurance also needs to be renewed annually.
Q. What are the salient features/benefits of a health insurance policy?
A- Though the features may vary from policy to policy and company to company, some basic features/benefits are:
1. Reimbursement of hospitalization costs due to illness/disease/ surgery.
2. Pre-hospitalization and post-hospitalization expenses
3. Ambulance Charges
4. Cashless facility
5. Income Tax Benefit, etc.
Q. I am young and healthy. Do I need health insurance?
A - Yes. You will need insurance. Even if you’re young, healthy and haven’t had to see a doctor in years, you will need coverage against unexpected events like accidents or an emergency. While your health insurance coverage may/may not (depending on the policy taken) pay for things that aren’t too costly like routine doctor’s visits, the main reason to have coverage is to have protection against the large treatment expenses of serious illness or injury. No one knows when a medical emergency might strike. It is best to buy health insurance, to save money when an emergency strikes.
Q. My employer provides me with health insurance coverage. Is it advisable to take another policy on my own?
A- It is strongly advised to have health insurance on your own as well because of reasons of continuity. Firstly, if you change your job, you might not necessarily get health insurance from your new employer. In any case you will be exposed to health costs in the transition period between jobs. Secondly, the track record that you have built in health insurance at your old employer will not transfer to the new company policy. Covering pre existing diseases might be a problem. In most policies pre-existing diseases are covered only from the 5th year onwards. Therefore to avoid the above problems, it is advisable to take a private policy in addition to your company provided group health insurance policy.
Q. Is there any tax benefit that one can avail of while purchasing Health Insurance?
A- Yes, there is a tax benefit available under Section 80D of the income tax act 1961. Every tax payer can avail an annual deduction of Rs. 15,000 from taxable income for payment of Health Insurance premium for self and dependants. For senior citizens, this deduction is Rs. 20,000. Please note that you will have to show the proof for payment of premium. (Section 80D benefit is different from the Rs 1, 00,000 deductions under Section 80 C)