What is Health Insurance or Mediclaim Insurance

Health Insurance or Mediclaim Insurance is now a days a very common term which we hear from people around us. Rising medical treatment or healthcare costs have made people think about buying Health insurance policies. A person without a Health Insurance or Mediclaim policy can suffer financial setback if   hospitalized for a major treatment. Arranging funds during such times becomes an uphill task but a health insurance or a Mediclaim policy can protect you from this financial crisis. However, what is Health insurance or a Mediclaim insurance? So here, we try to answer all your queries in a systematic manner so that you will get all the information related to Health Insurance or Mediclaim Insurance.

Health insurance is a type of insurance, which covers your expenses related to hospitalization due to injury or illness. It is a type of insurance that covers the cost of all medical, surgical, medicinal and doctor’s charges. Health insurance is a tool that protects an individual or his family from unexpected expenses that arise due to hospitalization of the insured person due to illness, accidents, injuries, etc. Health insurance is important because it ensures cashless treatment or reimbursement of expenses that arise due to hospitalization of the insured person.

There are many benefits of getting a Health insurance or a Mediclaim insurance policy. Listed below are some of the benefits for your information.

·         Health insurance keeps you financially protected against uncertainties.

·         It gives you options to take good healthcare treatments without worrying for the expenses.

·         Provides you cashless treatment option in case you take treatment at Network hospitals.

·         Provides you extra coverage through No Claim Bonus benefit.

·         Tax Benefits for purchasing Mediclaim policy for self, family and parents.

·         Last but not the least it gives you peace of mind. You need not worry for finances in case of hospitalization.

 

Key Terms in Health Insurance or Mediclaim Insurance.

·         Sum Assured: The maximum amount that an insurance company agrees to pay in a year in case of hospitalization.

 

·         Hospitalization: Admission to a hospital for treatment. A hospitalization is a process of a person admitted to a hospital for treatment of any illness or injury.  

 

·         Pre & Post Hospitalization Expenses: Expenses incurred before and after hospitalization. Expenses incurred by a person before admission and after discharge from a hospital.

 

·         Day Care Procedures: Treatment procedures that requires hospitalization for less than 24 hours. These include chemotherapy, radiation, dialysis, cataract, lithotripsy, tonsillectomy, etc.

 

·         Domiciliary Hospitalization: Domiciliary hospitalization is a situation where the insured person receives treatment at home instead of hospital. It also means illness/disease/injury which in normal course would require medical treatment at a hospital but actually taken at home. Conditions for domiciliary hospitalization includes (a) the treatment should last at least three days, (b) condition of the patient should not allow shifting to hospital and (c) there should be unavailability of accommodation at the hospital.

 

·         Claim: A claim is a formal request submitted by a policyholder to the health insurance company for payment of medical expenses incurred for hospitalization. There are two ways to settle a claim one is Cashless while the other one is Reimbursement.

 

·         Cashless Claim settlement is a facility where the insurer settles all your hospitalization bills with the hospitals directly. You need to take treatment only in a network hospital to avail the cashless benefit.

 

·         Reimbursement of a health insurance claim means, compensation done by the insurance company after the payment done by the policyholder to the hospital.

 

·         Network Hospital is any hospital that agrees to provide cashless treatment to the policyholder of an insurance company, which has tied up with that hospital.

 

·         Automatic Restoration is a benefit, which restores the entire sum insured of a policy in the same policy year when exhausted due to incurred claims. Restoration benefit triggers when the earlier sum assured gets exhausted. Restoration benefit is available only for claims unrelated to the earlier ones.

 

·         No Claim Bonus is a bonus amount added to the sum assured for every claim free year. It is benefit given by the health insurance company to their policyholders for not making a claim. The no claim bonus amount may go up to the limit of sum assured.

 

·         Co-Payment is the share of the claim amount that an insured person has to bear for the treatment with the insurance company.  It refers to the percentage of the claim amount borne by the policyholder under a health insurance policy. Under a copay option, the insurance company generally pays 80% to 90% of the claim amount and the remaining 10% to 20% is borne by the policyholder.

 

·         Pre-Existing Disease is any medical illness or injury, which a person may have before starting his Mediclaim policy. It may also be described as a medical condition, illness or injury that you already suffer at the time of purchasing a new health insurance policy. Pre-existing diseases generally have a waiting period of around 3 to 04 years from the date of inception of policy.

 

·         Waiting Period refers to the duration of time that an insured has to wait before some or all of their coverage comes into effect in their health insurance policy. During a waiting period, an insured person cannot claim some or all the benefits of their insurance policy. There is an initial waiting period of 30 days following the inception of the policy. There is a Two years waiting period for some specific illnesses/treatments such as Total Knee replacement, Hernia, Cataract, Hysterectomy, Prostate Disease, Kidney stone removal, etc.

 

·         Exclusions are the types of illness or medical conditions for which the insurance company does not provide any coverage. It means a person has to bear his own expenses for treatments related to the excluded ones. Most common exclusions include Cosmetic surgeries, Pregnancy related conditions, congenital disorders, Lifestyle related conditions, Treatment related to HIV Aids, Mental Illness, etc.

 

·         Portability: Shifting of ones existing health insurance policy from the current insurance company to another insurance company with all the accrued benefits and relaxation of waiting periods. Portability makes it possible for a policyholder to transfer his existing policy from one insurer to another. Anybody who wish to port his or her Mediclaim policy should apply at least 30 days before the renewal date.

 

·         Third Party Administrator is a company that provides operational services to a health insurance company for claims processing. Often called as TPA it acts as an intermediary between the insurance company and the policyholder.