What is Health Insurance? | Spring Money

As the popular saying goes, “Health is wealth.” Good health is truly the greatest treasure. However, the future is uncertain, and we may not be able to predict what might unfold. Just recently, from 2019-20 onwards, during the pandemic, there was a rise in health issues and a lot of financial burdens tagged along with it.

Making the best selection for your family's health insurance might be challenging. Many a time, people purchase health insurance only with the intention of saving money on taxes, neglecting to take into account the value of purchasing a comprehensive medical insurance plan.

To keep our financial situation stable, we put a lot of effort into it. We carefully manage our finances, from investments to savings, to achieve our financial objectives at various life milestones. But a sudden illness or injury might easily wipe out the savings. You can avoid depleting your money by being protected from such monetary emergencies with health insurance.

What is health insurance?

A health insurance is a contract where an insurer and a person or group agree that the insurer will offer the insured person or people health insurance against specific sorts of illnesses. By 2030, Statista predicts that India's health insurance sector will be worth more than 2 trillion rupees, taking into account the rising income levels, increasing awareness in urban areas and growing lifestyle related health demands.

These astounding numbers, along with the soaring cost of healthcare, highlight the need of health insurance in India. These insurance policies provide total coverage for medical costs in exchange for regular premium payments from the policyholders.

Health insurance helps cover most medical expenses like hospitalisation expenses, pre and post hospitalisation expenses, cover against mental illnesses, road ambulance charges amongst others.

According to the released National Family Health Survey-5 (NFHS-5)., 41%, or just over two-fifths, of families in India have at least one person covered by a health insurance plan or health programme. The number has been growing over the years as the majority of the population realises the grave significance of health insurance.

Do I need a health insurance?

Health insurance is necessary for every individual. With the growing costs, medical expenses could prove a huge drain on the pockets. Covering these expenses using insurance is a great way to deal with the same. Hence, it is of utmost importance to have a health insurance.

A few reasons why individuals need a health insurance include:

1. Changing lifestyle

2. Rising medical costs

3. Tax benefit

4. Coverage of pre and post hospitalisation expenses

5. Additional benefits

To understand the necessity of buying a health insurance in detail, read https://www.spring.money/post/do-i-need-a-health-insurance

What is the right time to buy a health insurance?

People frequently struggle with the decision of when to purchase health insurance. There is no perfect age to purchase one, though. However, if one purchases health insurance early in life, the cost of the policy will be lower. A health insurance policy's premiums go up as one gets older since the risk is higher. The insured's age, health record, city of residence, etc. all have a role in determining the health plan premiums. Therefore, purchasing a health plan early will enable you to reduce the premiums you would have to pay. Moreover, there is a huge uncertainty that lingers around the concept of health which has erased the idea of falling ill only during one’s 60s. So, it is always advised to invest in a health insurance plan at the earliest.

Who exactly provides health insurance in India?

There are around 30 companies in India which provide health insurances, few of them being National Insurance Co. Ltd., HDFC ERGO Health Insurance, Star Health Insurance, ICICI Lombard Health Insurance, Bajaj Allianz Health Insurance, etc. The aim should be to thoroughly research about the various health insurance schemes that these companies offer and choose according to one’s needs.

Health insurance in India

Health Insurance in India is usually tagged as ‘surging premiums and unfulfilled claims. India has 136.64 crore people living in it. It is currently the second-most populous nation in the world, predicted to soon overtake China in terms of population. Any successful economy must consider health as a key component. India has made significant progress in terms of medical technology, but with these developments come increased medical prices.

It is pertinent to note that:

• Most of the population is under 35 years old. People under the age of 25 make up 50% of the population.

• An Indian can expect to live for 70.03 years on average.

The insurance penetration in India, though on a rise, is still comparatively lower as compared to other countries. Health insurance penetration in India is extremely low due to limited reach, and lack of awareness and education.

Reasons of this poor health insurance penetration includes:

1. Lack of awareness: There is usually poor awareness when it comes to insurance of all types. People are not aware about the need of a health insurance as well as the perks of it, ultimately causing a financial drain to their pockets.

2. Myth around disease and age: There is an illusion amongst Indians of not being prone to diseases. There is an irrelevant connect made between age and illness. It needs to be noted that anybody from any age strata may fall ill and this uncertainty paves way for health insurance requirement.

3. Affordability: Majority of the population is of the opinion that health insurance policies are extremely costly and prefer paying medical expenses out of their pockets. However, with time, health insurance policies have only gotten more affordable aiding most individuals get protection under the scheme.

Health insurance in India not only acts like a financial cushion but ensures peace of mind and protection. With changing lifestyles, everybody is prone to medical attention. The future being uncertain, one cannot estimate the varied aspects of what, when and how. Moreover, rising medical costs always proves to be heavy to the pockets. One must do extensive research and opt the best plan for themselves and their loved ones. 56% Indians still do not have any health cover and if you fall under this majority, it is high time you be aware of the abc’s of insurance. You can use Spring Money application to know more about health insurance and invest in the right scheme.