Understanding Health Insurance: Definition, Types, and How It Works
A health insurance policy protects unexpected medical expenses and reduces the risk of huge financial loss in case of a health emergency. Rising healthcare costs are concerning for everyone as they can eat up years of savings.Insurance solution providers offer health insurance policies to avoid these unforeseen medical expenses.
What is Health Insurance?
Health insurance is a contract between an insurer and an insured policyholder, in which the insurer promises to pay the health expense of the insured entity in exchange for regular premium payment.
Types of Health Insurance
● Individual: Covers the health expense of the insured person.
● Family: Covers the health expenses of the entire family.
● Group: Usually taken by corporate offices. The health insurance covers the health expenses of employees.
● Critical illness: Covers the medical expenses of life-threatening conditions.
● Top-up: Offers additional coverage on existing health insurance.
How Does Health Insurance Work?
The health insurance policy comes with a certain tenure, which is usually a year. Once the tenure is complete, the policyholder needs to renew the insurance plan. Here is how the health insurance works: -
1. Purchase a Health Insurance Plan
A person can purchase a health insurance plan based on their needs. Different types of health insurance are available with numerous benefits, such as pre-hospital expense coverage, hospital expenses, and consultation fees. The best health insurance policies have cashless hospitalisation features.
2. Occurrence of Medical Emergency
In a medical emergency, the policyholder can file a claim with the insurance company. The claim is to reimburse the claim amount pertaining to the medical expenses.
3. The Reimbursement Process
When the policyholder files a claim, the insurance company verifies the medical expense details and provides settlement based on their settlement terms and conditions.
How to Choose the Best Health Insurance Plan?
● Assess medical needs: It is vital to assess an individual’s physical health, including any pre-existing health conditions, family health insurance requirements, and more.
● Compare different plans: One must compare different aspects, such as claim settlement ratio, sum insured, and cashless features of different insurance solution providers.
● Check premium payment: It is always better to know the premium payment amounts of different providers.
● Choose a higher settlement ratio: For a seamless claim settlement, an individual should select a provider with a higher settlement ratio.
Health insurance is essential to secure the health of oneself and their loved ones. Top insurance providers offer comprehensive coverage to their customers. So, it is essential to choose the right company that provides added benefits to customers.
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