Health insurance or medical insurance is a basic type of insurance that helps to provide financial protection against any arrival of unexpected medical expenses in human life. In this article, we will provide brief explanation about health insurance and its types.
Before know the medical insurance, we have to know about what is insurance and its types shortly.
INSURANCE
Insurance is defined as a financial instrument that provide a risk coverage against any loss occurred what one could insure. It is an invisible product and pays out a lump sum of money either on the loss or damage to replace it in a certain period of time.
It is also defined as one of the most effective risk management financial tool that provide protection to the thing one could insured from financial losses. The primary usage of insurance is to provide risk coverage against a contingent risk or any uncertain loss.
Categories of Insurance
There are two major categories of insurance in the insurance industry. Under that categories there are many types of insurance available to insure all the things that what people having themselves. The categories of insurance are as follows.
- Life Insurance
- Non-life or General Insurance
In these two categories of insurance contains many combinations of coverage and benefits that helps people to avail it according to their need.
1) Life Insurance
Life insurance is a contract between the life insurance company and the life insured, where the insurer promises to pay a sum of money or how much the life insured took a coverage himself to the designated beneficiary, upon the death of insured person. It is one of the few investment options that provide financial security to the people along with maturity benefit, including tax benefits. Even though having these much of benefits, the primary objective of life insurance is to provide financial security or income replacement for their family in the event of life insured’s death.
Life Insurance is not only providing security to the insured life, beyond that for achieving their life goals it plays an important part in their life. For that life insurance is designed in various types to fulfill the different goals in different stages of their life even the life insured is alive or not. The different types of life insurance are as follows.
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Term Insurance
It provides only life coverage of life insured in the event of death in specified policy term. Now a days the term insurance is available in the form of returning of premium that the life insured will get the paid premium at the end of the policy term.
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Traditional Insurance
It provides life coverage along with the maturity benefit as lump sum or in a period of time as income. Depends on the maturity benefit it is categorized in to various plans as follows.
- Whole Life Insurance
- Savings and Investment Insurance
- Endowment Life Insurance
- Child Life Insurance
- Moneyback Insurance
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ULIP Life Insurance
This type of insurance is same as traditional insurance that it guaranteed only the life coverage of the insured and the premium paid by the people are invested in unit liked products, which is not guaranteed. But the maturity benefit depends on the market movements and profit arrived in the share market.
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Retirement Life Insurance
It is the combination of either traditional or ULIP insurance along with life coverage of insured. Depends up on the age the returns are changed as per the type of policy.
2) Non-Life or General Insurance
As the name itself, other than human life all asset owned by an insured, which may be having the chance of risk for loss or damage can covered under general insurance. In general insurance, almost everything can be insurable as per the acceptability of the insurance companies. The following are the different type of life insurance in India.
- Health Insurance
- Motor Insurance
- Home Insurance
- Marine Insurance
- Commercial Insurance
The following are the insurance offered under general category for covering the human life in an affordable cost.
- Accidental Death Insurance
- Accidental Death and Disability Insurance
The above insurance provide only coverage in the event of death or disability due to accident only.
MEDICAL OR HEALTH INSURANCE
Health insurance or medical insurance is a type of general insurance that it provides coverage to an individual or a family against any injury, illness and accidents. The medical coverage includes the surgical expenses, medicine charges, ambulance charges and all other possible charges incurred in the hospital due to any sick.
It is also a contract between the insurer and insured about to provide the medical expenses incurring in the hospital as per the terms and condition mentioned in the document by exchanging the premium. In health insurance, insurance company estimates the possible health risk in the medical system and its expenses charged by the hospitals to offer an insurance to various aged people in various premium amount to spreading the overall risk to numerous people. It can be renewed every year till the policyholder is alive. Some add-on benefits along with medical insurance has be offered by an insurance company, which are discussed here.
Need of Health Insurance Policy
In this modern world, the lifestyle of a human being has changed as per the technological improvement and inventions. Obviously, the food habits, type of food and food consuming time has also varied as per the workstyle. Due to the over population, natural imbalance and lack of enough nutrients consuming causes the invention of new disease in the world.
Due to that the life expectancy for males stood at 68.7years and females stood at 70.2years at birth as of 2016. The global average expectancy stood at 70years for male and 75years for female.
In India the approximate percentage of total death has been claimed by non-communicable disease is 61% in 2017.
As per the research in India, more than 224 million of people suffer from hypertension as of 2017.
In India, diabetes is a common disease that more than 73 million people suffered from type 2 of it. That type 2 diabetes could lead to various medical complications. If this same persists, more than 134 million of people will be suffered by 2025 in India.
It is very important to be prepared for facing all new modern world diseases and the expenses caused by it. So, the medical insurance is the important necessity in the human life.
Benefits of Health Insurance
Some of the common benefits of health insurance are provided below. These benefits may vary across various health insurance companies.
- Pre and post hospitalization charges
- Ambulance Charges
- Hospital room / ICU room rent charges
- Hospitalization Expenses
- Domiciliary Treatment Charges
- Daycare procedures
- Organ Transplantation Charges
Types of Health Insurance
Insurance companies offered various types on health insurance plans based on the number of people covered and type of illness covered. The various of health insurance as follows,
- Individual Health Insurance
As its name suggests, an individual can get a coverage of their treatment cost in this type of insurance. That individual may be a father or mother or any one person in the family. Only that person could avail the entire sum assured for their hospital expenses in this policy.
- Family Floater Health Insurance
In this type of health insurance, all individual family members are covered in a single sum assured of the policy. Only Parents along with their children could covered in this policy. Once their children attain the age of adult, automatically the coverage will be waived off from family floater policy and new individual health insurance will take for them.
Two adult brothers or sisters in a same family or different family and friends should not covered under family floater policy.
Due to more medical need and health complications, senior citizens are not eligible to get coverage under this type of policy.
- Senior Citizen Health Insurance
The health insurance plan is designed to provide the medical coverage for the people aged above 60 as per the estimated possibilities of suffering diseases for them.
- Group Health Insurance
This insurance is offered to get a medical coverage for the group of people, who works in an organization. Only employer can avail this type of health insurance to their employee and also, it can be renewed as per the conditions prescribed in the policy contract.
- Critical Illness Insurance
In human life, there are some life-threatening disease that provide more costs to treat. For that, critical illness type of health insurance can provide medical expenses coverage only people, who will suffer in those types of disease.
- Health Insurance with Maternity Coverage
Medical insurance policy provide coverage against and unexpected or unplanned medical emergencies only. Maternity is a planned event that these expenses cannot covered in normal health insurance policy. For covering all types of medial expense including maternity, this type of insurance is offered by some insurance companies.
- Top-up Health Insurance
This health insurance can only avail along with basic health insurance policy as add-on. If the sum assured of the basic health insurance policy exhausted then the sum assured availed in this add-on will used to provide coverage against medical expenses.
Those types of health insurance could help people to provide medical coverage against their various medical needs in various stages of their life time.
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