6 Long-Term Benefits Of Purchasing A Health Insurance Policy – Forbes

Published: Apr 5, 2021, 4:01pm
A health insurance policy is primarily designed to cover you financially in case of a medical emergency caused by illnesses, accidents or hospitalization. It has long-term benefits that make taking a health insurance policy a definite goal in your annual financial plan. 
Let’s look at how a health cover can benefit you. 
One of the most pertinent benefits of health insurance policy is that it covers expenses for hospitalization, whether it is for accidental injury or illness.
Health insurance policies cover for costs incurred while taking treatment in a hospital for any illness. The expenses covered include any associated costs related to the treatment ranging from the following:
Any cost incurred for treatment of injury due to an accident are covered in health insurance policies. These include any associated costs related to the treatment of an accidental injury that is covered in the health insurance plan such as: 
An option to choose a cap on room rent in your health insurance policy is an important determiner because charges such as diagnostic and doctor fees are directly related to the category of room one chooses during treatment in the hospital. 
This feature involves options such as a fixed amount linked to the total sum insured of an individual or a single private room and even no limit on room rent while undergoing treatment at a hospital. 
With advancement in the treatment methodology, there are many procedures that do not require overnight hospitalization. Health insurance plans are designed to help policyholders in such cases by covering such treatments as well without customary hospitalization.
These days not everyone prefers allopathic treatment and there are certain illnesses that can be effectively treated through other alternative medical treatment methods such as ayurveda, siddha, unnani and homeopathy. Certain health insurance plans cover the cost of such alternative treatment as well.
When an individual takes treatment at a hospital, there are a series of visits by doctors along with the diagnostic tests that are required to be done for you before you get treated as well as after. These expenses are considered by certain health covers. 
For instance, health insurance plans pay for the expenses incurred in the hospital for treatment but they also factor paying for the expenses incurred prior to hospitalization for a certain number of days ranging from 15 to 60 days prior to treatment. They also cover charges of follow-up visits, medicines and diagnostic tests once you get discharged from the hospital. Some health insurance plans pay for such expenses ranging from 30 to 90 days from the discharge of an individual from the hospital.
This benefit covers the cost of ambulance and is generally offered as a sublimit of about INR 5,000 for each hospitalization you undertake during your policy cycle. 
Health insurance plans are designed to primarily take care of financial stress in case of medical emergency. However, insurers also want people with good health in their portfolio. 
To ensure an individual is aware of their health, most health insurance plans offer preventive health check-ups on a yearly basis. This helps an individual to know about their health vitals and take corrective steps to bring changes to their lifestyle. In the long-term, this helps insurance companies potentially lower their claims outgo.
In a health insurance policy, there are certain specified illnesses for which the coverage is not available from day one. There is a waiting period of one year to four years for specific illness. The illnesses that are specifically excluded are considered for coverage after policyholders sign up for continued renewal of health insurance plans with the same company for a period ranging from one year to four years depending on their terms and conditions.
Taking a health insurance plan at an early age helps individuals cross the waiting period at that stage of life where specified illnesses, which are generally excluded during the waiting period, do not tend to happen to a healthy individual. This enables policyholders to avail full benefit of the insurance cover at an early age.
Health insurance not only covers the medical expenses of those who have to seek hospitalization for illness or accidental injury but also rewards those who do not have to avail the benefits of health insurance and do not make a claim in the policy period. Such individuals are rewarded by way of increasing their insurance cover sum insured without charging any additional premium.
A “No Claim Bonus” can be earned up to 100% of the original sum insured in the policy. This feature enables an individual to double the cover without any additional cost and is useful at older age bands when specified illnesses are likely to happen. These include cancer, diabetes, hypertension and heart-related complexities. 
While an individual pays the insurance premium for a health insurance, there is an immediate financial benefit in the form of income tax rebates on premiums paid by an individual. In India, health premium rebates are as follows:
The effective cost of a health insurance policy is thus reduced by the deduction that is allowed in an individual’s annual income tax. This is a built-in double benefit of protection against financial strain as well as saving tax.
Health insurance today is available for all life stages. An individual can combine the base hospitalization cover with a top-up health insurance cover to manage the cost of insurance and still get reasonably large protection for medical emergencies. 
Pankaj Arora is the MD and CEO of Raheja QBE General Insurance. With 20 years of experience in the insurance industry, he has worked with Liberty General Insurance, Tata AIG, Bajaj Allianz, Religare and SMC Insurance. He has a postgraduate degree from IILM, Delhi.
Aashika is the India Editor for Forbes Advisor. Her 15-year business and finance journalism stint has led her to report, write, edit and lead teams covering public investing, private investing and personal investing both in India and overseas. She has previously worked at CNBC-TV18, Thomson Reuters, The Economic Times and Entrepreneur.


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