Pros and Cons of Health Insurance in India

Health insurance, a cornerstone of modern healthcare systems, offers both peace of mind and financial protection to policyholders. It's designed to cushion the financial blow that often accompanies medical treatments, ensuring that quality healthcare remains accessible. However, like all systems, health insurance isn't without its challenges and caveats. While it can act as a safety net, shielding individuals from exorbitant costs, there are also complexities and potential drawbacks to consider. In this blog, we'll delve deep into the world of health insurance, shedding light on its advantages and pinpointing its inherent disadvantages, enabling readers to make informed decisions about their healthcare needs. 

Advantages of Health Insurance

Here are some of the benefits of health insurance: 

• Less financial stress: Disasters themselves bring mental stress. You don't need additional stress worrying about money. Health insurance can help you reduce your financial burden by providing monetary aid during unfortunate incidents in return for fixed yearly premiums. 
• Allows dream life: Without health insurance, you might fear living the life you dream. Every earning will go to your savings account for fighting a future illness or disaster that may not happen. Health insurance allows you to spend small fixed premiums in exchange for a relatively large sum when a disaster strikes. 
• Cashless Experience: Health insurance also enables you to have a stress-free cashless experience during hospitalisation. You don't have to perform countless transactions for every medicine or procedure; all the transactions up to the sum insured will be directly between the hospital and the insurance company.  
• Higher than Savings: The sum insured is always significantly higher than your annual savings. Therefore, you get a higher amount for medical expenses than possible with your savings. 

Disadvantages of Health Insurance

Even though experts recommend health insurance, there are some disadvantages.

• Waiting period: You must wait a specific time before you can claim health insurance. There is usually a general waiting period of thirty days after purchasing the policy; you also have to wait for a few months for certain diseases. There is a longer waiting period for preexisting illnesses. 
• Exclusions: All health policies have certain unsupported diseases and procedures. You can't claim insurance for any of these diseases; that means you have to pay the hospitalisation and medicine expenses from your pocket. 
• Unsupported Hospitals: Your insurance company may only approve some of the hospitals in your locality. They do provide reimbursements for the billed procedures and diseases. However, you have to manage the payments yourself.
• Possibility of refusal: The terms of the agreement can be tedious to read, and sometimes you might miss specific vital points. That can prove problematic during an insurance claim. For example, the policy may cover a disease in your family history, but it may not approve a treatment procedure. This fact is straightforward to miss, resulting in claim refusal. 

Tips for choosing appropriate health insurance

The advantages trump the disadvantages of health insurance; however, you should keep the following things in mind before purchasing health insurance.

• Personal Requirements: Ensure that the sum insured cover your needs. Check your family history; the sum insured must be appropriate if the family history has a critical disease requiring expensive treatment. 
• Meticulous research: Numerous insurers and insurance policies exist online; read about all of them and find the approach most suitable to you. One policy might only cover some of your needs. Therefore, consider purchasing multiple policies that complement each other.
• Early Insurance: Insurance companies research whether your disease is preexisting or not. Sometimes, it may not be easy to pinpoint. So, it would be better to start early to avoid any confusion regarding preexisting diseases. Moreover, the premium for a young person is significantly low. 
• Add-ons: You must also consider the add-ons provided by a typical insurer; these add-ons might make purchasing multiple policies unnecessary. Insurance add-ons extend health coverage, such as accidental cover or life insurance coverage. Add-ons are significantly lower than other policies and require no extra paperwork. 
• Free Health Checkups: Some health insurance policies also provide you with free annual health checkups. These can be beneficial in finding out ailments well before they become serious. 

In conclusion, health insurance has several advantages and some disadvantages. While the disadvantages are inconveniences, the advantages can significantly support you through the worst of your times. Moreover, you get to live your life fully and worry less. 

FAQs

Q1. What are the types of health insurance?

Several health insurance plans exist; a few of them are below:

• Individual Health Insurance: The cover includes hospitalisation expenses and pre− and post-hospitalisation charges for a single person. This plan is most suitable for bachelors without anyone depending on them.
• Family Health Insurance: If you have started a family, this insurance would be better as it covers your spouse and your children. 
• Critical Insurance Cover: Regular plan might not be enough for critical illness; you may also need immediate financial assistance without hospitalisation. A critical insurance plan gives your sum upon diagnosis of your condition. 
• Hospital Daily Cash: Regular medical insurance only covers hospitalisation. This insurance covers expenses where you only need to consult a doctor or have procedures without hospitalisation.  

Q2. What is group health insurance?

A company or an institution purchases group insurance; they cover a large number of people with less paperwork. A group insurance premium is significantly lower than an individual insurance. 

Q3. What are ULIPs?

ULIPs or Unit Linked Insurance Plans refer to specific health insurance where part of the amount gets invested in financial instruments. This way, you can get an amount at the end of a policy term even if nothing unfortunate happens. 

Q4. What is the difference between indemnity and fixed plans?

The indemnity and fixed plans vary in how they release money: 

An indemnity plan covers hospital expenses only, and you receive only as required, even if your sum insured is much higher. However, you can make multiple claims until you have consumed your sum insured. 

A fixed plan gives you a pre-agreed amount upon any unfortunate incident specified in the agreement. Critical illness plans, hospital cash plans, and accident cover are under fixed health insurance.

Q5. What are deductibles?

Deductibles are the amount paid by you on any claim. The insurance company covers the rest. The deductibles and premiums are inversely related to each other; the higher the deductibles, the lower the premiums. Therefore, ensure you can afford the deductibles before aiming for a lower premium. 

Q6. What do you mean by the term "network hospitals"?

Network hospitals are those in which your insurance provider works; you must check the network hospitals before purchasing a claim. Otherwise, you can only go for reimbursement and not cashless if a hospital near you does not come under the insurer's network. 

Also Read: 

A Guide to Choose the Right Family Floater Health Insurance Plan