How does health care insurance works?

Health insurance is critical to protect your savings from the high cost of medical care. Medical treatments can be costly, and at times, the treatment for some of the critical illnesses can deplete your entire life savings. Hence, it is advisable to invest in a good health insurance plan. 

What is a health insurance plan? 

Health insurance plan is an insurance product that offers financial aid for medical expenses incurred to treat policyholder and family members who are insured under the policy. It comes with multiple features such as cashless hospitalisation, room rent, doctor’s consultation charges, evacuation charges, critical illness expenses, day-care facility, etc.  

Many people own a health care insurance policy but have questions about its functioning. Whether you have a health insurance policy or not, here is a detailed study about how it works in India. Read further to plan your health insurance purchase better.  

  • The process begins with a person looking for a plan based on the coverage provided, the exclusions, the inclusions, and the premium. 
  • Based on the person’s age and income, the insurance company will decide the premium for the health insurance policy. After that, the person must undergo a comprehensive medical test to evaluate his/her general health. Depending on these factors, the insurance company will decide the yearly premium on the sum assured approved. Claims made will be settled based on factors such as co-payments and deductibles.  
  • Nowadays, most of the health insurers provide cashless plans. If your plan also offers a cashless facility, then in case of hospitalisation you can get bills cleared without paying a penny from your pocket. For this, you need to check whether the hospital falls under the network hospital list of the insurer. If yes, then contact the Third Party Administration (TPA) in the network hospital, the TPA will help you get the hospital bill directly reimbursed. In case your policy is not cashless, you will have to make the hospital payments and then get it reimbursed from insurer.  
  • Some insurance policies offer hospital cash, that is the daily limit paid to the policyholder depending on the days he/she was admitted. It is to cover the daily expenses incurred in hospitalisation.  
  • In case of cashless policy, the policyholder needs to submit hospital bills, reports, doctor’s summary, discharge reports and make a claim to TPA. The TPA’s will then collect your documents and verify them to ensure that your claim application is complete. Accordingly, the insurance company will process the claim to reimburse the hospital bills. There could be some possible disallowances as a part of expenses may have to be borne by the policyholder. In such a case, the insurance company will pay the bills partly and deduct the rest.  
  • The claim process must be hassle-free as the person is already facing emotional trauma due to health ailments. Most of the insurance companies understand this and make the claiming process easy and quick.  
  • If the policyholder doesn’t make any claim in a year, some insurers reward the policyholder with no claim bonus.  

Health care insurance is the best way to protect your finances from the burden of expensive medical treatments. Understanding the working of health insurance is an important part of investing in policy as it can help you if there is an emergency.  

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