We cannot predict when in life we may fall ill and need finances to help us with our expenses which may be high depending on the illness.
We need to have funds available readily to help us deal with such exigencies without denting our regular income which would affect us and our families.
By putting aside a relatively small sum of money at regular intervals we can ensure that we do have finances readily available when the need arises to meet unforeseen, sudden health / medical expenses.
For senior citizens this becomes particularly important as their earning capacity may have reduced or they may not be having a regular income !
Health insurance is insurance against the risk of incurring medical expenses among individuals.
By estimating the overall risk of health care and health system expenses, among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium, to ensure that money is available to pay for the health care benefits specified in the insurance agreement.
An insurer, or insurance carrier, is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount of money to be charged for a certain amount of insurance coverage, is called the premium.
A health insurance policy is a contract between an insurance provider (e.g. an insurance company or a government company) and an individual or his/her sponsor (e.g. an employer or a community organization). The contract can be renewable (e.g. annually, monthly) or lifelong in the case of private insurance, or be mandatory for all citizens in the case of national plans. The type and amount of health care costs that will be covered by the health insurance provider are specified in writing, in a member contract or "Evidence of Coverage" booklet for private insurance, or in a national health policy for public insurance.
In India, health insurance is usually offered as a yearly policy. One requires renewing each year. The policy is also subject to certain exclusions and waiting periods. To understand this, you need to read the terms and conditions of policy carefully before signing the dotted line. There are two ways to claim Health Insurance; Cashless or Reimbursement.
Cashless
Most health insurance organizations in India have a network of hospitals where they have a special arrangement for direct billing. This means that the insurance company will directly pay the admissible claim amount to the hospital. Now when the insured person is admitted in a 'Network Hospital', the relative of the individual must submit a cashless card issued by the insurance company to the hospital billing desk. The hospital will process cashless admission for the patient. The hospital expenses will be paid by the insurance company. The insured person will have to pay only expenses excluded under the Health Insurance Plan.
Reimbursement
In the event where you happen to be admitted in a hospital out of the insurance company network, you will require making payments on your own to the hospital and submit the papers to the insurance company along with the Claim Form for reimbursement.
Insurance plans can be of various types: individual plans for single persons, family plans to help take care of family members in the event of some medical emergency, plans for senior citizens who may not be having a regular income but still need health care, all the same.