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Health Insurance

Introduction

 

Every day, we come across instances of people dying due to their inability to get timely treatment. Not that there is a paucity of hospitals or treatment facilities in India, but because the hospitalization expenses and costs of medical treatment have risen to a level that very few can afford. Inflation has had an overbearing effect on medical costs, which explains the increasing need to buy health insurance.

 

What is health insurance? 

Simply said, it is a kind of risk cover against increasing medical and surgical expenses. A health insurance policy is an agreement between the insurance company and the policyholder in which the former is liable to pay for the hospitalization and treatment expenses of the latter in lieu of regular payment of premiums during the policy term. With a health insurance policy in place, the policyholder can seek the benefits of either cashless treatment or reimbursement of the amount spent on treatment, if and when required. However, the insurer is liable to pay off the medical bills subject to the condition that the total billing amount does not exceed the amount of sum assured and premiums are paid on time. 

 

 

Let’s understand the concept of health insurance with the following example:

 

Jogesh Kumar, aged 34, is a married man with two children. In addition, his aged parents are also living with him. The entire family runs on Jogesh’s income. This means that Jogesh is not only responsible for their financial security but has to also take care of their hospitalization and treatment expenses irrespective of whether the medical treatment is planned or sudden. Suppose Jogesh’s wife has been suddenly hospitalized and needs to be treated for some medical disorder. The total hospital bill amounts to ₹3,69,000. Jogesh who already had bought a health insurance plan with a sum assured totaling ₹4,00,000 and had opted for the cashless treatment option, will simply submit the health insurance card at the insurance desk of the hospital. The insurance company is now liable to pay off the medical bills, thus, relieving Jogesh from the liability of having to pay such a huge medical bill from his accumulated savings. 

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