Introduction:
Allocating a budget for health insurance has become an annual ritual in almost all Indian households. The percentage of people who prefer to purchase the plans has drastically increased due to numerous factors like rising medical costs and the prevalence of chronic diseases. It has been proven repeatedly that health insurance provides financial and medical immunity to policyholders. Let’s read about it in detail below.
Understanding health insurance policy for the family:
The health insurance plans for family, commonly known as a family floater, covers multiple family members’ medical and hospitalization expenses. One can include spouse, dependent children, parents and parents-in-law under the plan. This plan is ideal for those who want to avoid the hassle of maintaining multiple policies and wish to cover the medical expenses of all the family members under a single policy. Insurance companies have set specific eligibility criteria for adding family members, and it varies from one company to another. While some insurers set a maximum age limit for adding children under the family floater, others have set up medical history requirements for older adults like parents and parents-in-law.
Under the policy, the insured sum will be shared among the registered family members. So, it is vital to assess the medical requirements of their family members and ensure adequate sum. Suppose any family member undergoes an expensive treatment and exhausts a significant share of the insured sum. In that case, other members will have no option but to share the remaining amount. For example, if Rs 15 lakh is insured under the policy and one of the family members claims Rs 12 lakh for his treatment, then the remaining Rs 3 lakhs should be shared among other members.
Many prefer to purchase family floater plans since they come at a price lower than rates of individual health insurance policies. The policy’s premium depends on the age of the family’s eldest member. The insured can increase the benefits with the help of add-on covers. The plan covers hospitalization expenses, including room rent and doctor’s fees, pre- and post-hospitalization expenses, daycare expenses, annual health checkups and AYUSH expenses. Apart from this, add-ons can be added to the plan to extend the list of benefits.
Benefits of availing a health insurance policy for the family:
1. Medical immunity:
COVID-19 has taught us the importance of leading a healthy life and providing quality treatment during a medical crisis. As a result, purchasing the right health insurance policy has become mandatory because it offers financial and medical immunity. With the right cover in hand, one can concentrate on their recovery and well-being. Family floater plans provide numerous benefits, some of which are listed below.
1. Critical illnesses coverage: Most health insurance coverage for families comes with critical illness coverage. Critical illness is a health condition, sickness, or disease requiring immediate intensive medical support for vital organ functions to survive. It can be caused due to severe illness, major surgery or accident. It falls under the predetermined list as a part of an insurance policy. Some of the commonly covered critical illnesses are cancer, stroke, heart attack, kidney failure, aorta surgery, organ transplantation, paralysis, Parkinson’s disease, head trauma and chronic liver disease.
2. Pre-existing disease coverage: It is a medical condition the policyholder has been diagnosed with before purchasing a policy. A policyholder is said to have PED if they were diagnosed with a medical condition up to 48 months before buying the policy, and it includes any long-term illness right from high blood pressure and diabetes to thyroid and asthma. Most policies cover PEDs only after a waiting period; on average, the waiting period is between two and four years.
2. Financial immunity:
Most Indian households purchase and renew health insurance policies annually. Though the main reason is to provide quality treatment during medical emergencies, people also worry about exhausting their lifetime savings on unforeseen medical treatment. Health insurance covers are designed in such a way to cover the rising medical costs of the insured, thereby safeguarding the savings from being depleted during a crisis. In particular, family floater plans offer much help in gaining financial immunity.
1. Saving on premiums: Health insurance plans for families come at a much lower price than individual health insurance policies. It is mainly because the insurers will considerably discount the premium for covering multiple family members under a single policy since they can save on administrative costs like underwriting and processing claims. Insurers also put the plan under the low-risk category since it is unlikely that all family members will fall sick in a year and claim the sum insured.
2. Cashless Mediclaim at network hospitals: Since finding a hospital that agrees to cover treatment costs under insurance policies during a medical emergency is challenging, it is better if the insured purchases a health insurance policy with an extensive list of network hospitals. One can avail of cashless hospitalization at the network hospitals. It means the insurer will settle the hospitalization and other medical expenses directly upon submitting the bills. So, one can avoid pre-arranging or shelling out money from their pocket during a crisis. Also, this benefit will conveniently remove the hassle of bearing medical expenses, submitting bills and invoices, and waiting longer to get a refund.
3. Tax benefits: Under section 80D of the Income Tax Act, taxpayers can claim a tax deduction of up to Rs 25,000 for the insurance premiums paid for themselves, their spouse and dependent children. They can also claim an additional deduction of up to Rs 25,000 for premiums paid for their parents aged below 60 years, and the claim can be made up to Rs 50,000 if the parents are aged above 60 years. Taxpayers can also claim a deduction of up to Rs 5,000 for expenses incurred towards preventive health checkups.
Conclusion:
Though many have started realizing the importance of health insurance and purchasing it, understanding the terms and conditions and the purpose of each plan to make an informed choice has become even more vital. By choosing the right plan, one can concentrate on their well-being rather than worrying about the finances.
