Understanding How Health Insurance Works: A Complete Guide

Life is full of unexpected twists and turns, and while we can't predict the future, we can certainly prepare for it. Health emergencies are like an uninvited guest that can come knocking on your door unexpectedly. 

Table of Content

• Understanding the Basics of Health Insurance
• How Health Insurance Works: Step-by-Step Process
• Important Features of Health Insurance Policy
• How to Choose the Best Health Insurance Plan in India?
• Conclusion

Fortunately, it's easy to tackle these health emergencies if you have a good health insurance plan in place. By offering necessary financial coverage, health insurance allows you to get the best possible treatment for you and your loved ones, without pushing you into debt.

In this guide, we will understand how health insurance works, exploring the types of insurance policies, tips for choosing an insurance plan and other important information.

Understanding the Basics of Health Insurance

Health insurance is basically a contract between a health insurance company and a policyholder. Under this contract, the policyholder agrees to pay regular premium payments to the insurer, who in exchange promises to cover the policyholder's medical expenses. 

There are different types of health policies, including:

• Individual: The most common type of health policy, this plan covers the medical expenses of only one individual.
   
• Family floater: This insurance policy covers the entire family, including parents, children, and spouse in one single plan.
   
• Group: A group medical insurance covers the expenses of employees or a group of people against unforeseen medical emergencies.
   
• Senior Citizen: This plan is designed for individuals above 65 years of age.
   
• Critical Illness: This insurance plan offers coverage for life-threatening conditions like cancer, kidney failure, cardiac issues, and so on.

• Top-up: This plan offers additional coverage in case you end up exhausting the maximum limit of your existing health insurance plan. 

How Health Insurance Works: Step-by-Step Process

The working of health insurance is quite simple. Here is the step-by-step process of how it works:

Step 1: Purchase a Health Insurance Plan

Firstly, you need to purchase a health insurance plan based on your requirements and budget. Once you have health insurance, you can start paying the nominal policy maintenance fee, known as the insurance premium.

Step 2: Occurance of Medical Emergency

Health insurance policy comes with tenure, typically one year, after which they need to be renewed. Suppose you encounter an unexpected medical emergency during this tenure.

Step 3: File a Claim

Following the medical emergency, you submit a claim to your insurance provider for the expenses related to your treatment.

Step 4: Get Reimbursement

Lastly, your health insurance company will settle the expenses as per their terms and conditions.

Important Features of Health Insurance Policy

Here are some important features of health insurance policy that you must be aware of:

• Sum Insured

The sum insured is the maximum amount you can claim after facing a medical emergency. It’s crucial to select a sum insured that will adequately cover all potential healthcare expenses.

• Cashless Hospitalization

Cashless hospitalisation is a feature that allows policyholders to get cashless treatment. If you are wondering how cashless health insurance works, here is a simple explanation: During your treatment, if you are admitted to a network hospital of the insurer, the insurer will directly settle all your hospital bills and you won’t have to pay anything.

• Claim Settlement Ratio

This ratio indicates the percentage of claims that an insurance company has settled against the total claims received. A higher ratio indicates a reliable insurer.

• Insurance Premium

The insurance premium is the amount you pay periodically (monthly or annually) to maintain your health insurance coverage.

• Add ons

Add-ons are additional coverage options that you can add to your insurance plan. Some common add-ons in India include maternity cover, wellness programs, critical illness cover, etc.

How to Choose the Best Health Insurance Plan in India?

Choosing the best health insurance is crucial to get proper medical coverage. To help you, here are a few tips:

• Determine Your Requirements: Before choosing any health plan, you need to assess your present and future needs and choose a coverage that will cover all those needs.

• Compare Different Plans: Compare plans offered by different companies based on premiums, claims settlement ratio, sum insured, customer reviews, etc. and then choose the best one.

• Decide the Premium: Check the premium amount you will be paying and ensure that it's reasonable and justifies the coverage you are getting.

• Opt for Higher Claim Settlement Ratio: The higher the claims settlement ratio, the better your chances of getting a stress-free settlement of your claims.

• Carefully Read the Terms and Conditions: Read the policy terms and conditions carefully to understand inclusions, exclusions, sub-limits, waiting periods, and co-payments

Conclusion

As we conclude, it's clear that health insurance is a great tool that allows you to get quality and timely medical treatment without worrying about the cost associated with it. So, purchase health insurance and ensure a safe and stress-free life for you and your family.

If you are looking for the best health insurance plan to cover medical expenses against costly hospitalization, then consider Muthoot Finance. We offer comprehensive coverage without any hassle, ensuring you and your family are protected.