At the end of the day, Insurance is merely an attempt to anticipate an unfavourable event. There are many different types of insurance covers available worldwide for the general public. Specific to India, Insurance can be broadly categorized into two sections: Life Insurance and General Insurance.
What is Life Insurance?
Life Insurance policies cover and protect us from incidents and risks beyond our control. These come into effect in the event of the passing away of the policy holder whereby the insurance company provides the due money to the benefactor of the policy. It could be a spouse, parent or children of the deceased.
What is General Insurance?
Unlike Life Insurance, General Insurance does not offer returns but protects us against emergencies and unexpected events such as illness, accidents, natural calamities, thefts etc. It has many sub categories from travel insurance, householder insurance to auto insurance, shopkeepers insurance, personal accident insurance and even pet insurance… A large chunk of this pie is health insurance.
Health insurance provides us cover against the medical care costs arising from disease or accidental injuries. It is a crucial financial product that every individual must have irrespective of their age as it allows us to focus on getting the best treatment without bothering about the financial costs incurred.
How does Health Insurance work?
The mechanics of health insurance are really quite simple. Based on the insurance policy you paid for, you can get reimbursed for part or whole of the medical costs of treating the disease or injury. This is inclusive of hospitalization, doctor’s consultation fees, nursing costs, medicine etc. Most health insurance policies, however, do not cover regular medical expenses, outpatient care and daily medication.
You can buy health insurance for yourself as an individual or for your whole family. To buy a policy, an annual fee or premium must be paid to the insurance company. You can decide the amount of policy coverage and pay a corresponding premium. The more the coverage, the higher the insurance premium.
If you happen to fall ill, the insurance company is duty bound to reimburse you for the complete amount of your policy. This can be a one-time expense or it can be broken down into multiple payments depending on your needs. For example, lets say you have a health insurance policy that covers you for Rs. 100,000. If you fall ill, you can receive up to Rs. 100,000 from the insurance company. If you need the money in smaller quantities over a period of time, the company will release it accordingly.
These payments from the insurance company can be received in two ways, again depending on the terms of your policy. You can pay the hospital all your medical costs and claim the payment from the company at a later date. Or you can get a cashless settlement. This means that if you are treated in a hospital approved by the insurance provider, your bills will be settled directly between the insurance company and the hospital.
A positive outlook in life goes a long way to keep us healthy and fit. But along with an optimistic viewpoint, it is important to protect ourselves from unforeseen situations. So get insured to keep yourself and your family covered…