How Medical Insurance Works?

Medical Insurance: Benefits, Working Principles, and Key Considerations

Medical insurance protects policyholders from unexpected healthcare expenses, reducing financial stress and ensuring access to quality treatment. Understanding how health insurance works is essential to make a wise decision about coverage, additional benefits and more. Several insurance companies are approaching the market with multiple policy plans extending medical insurance coverage and benefits as per one's needs. Buying a policy is simple, but understanding how medical insurance works and what factors to consider is essential.

Here's a brief overview of essential medical insurance fundamentals to help you further!

What is the Working Principle of Medical Insurance?

When an individual purchases medical insurance, the insurer analyses the following factors:

●Policyholder’s age 
●Medical history 
●Gender
●Policy type 
●Pre-existing health status, etc. 

Based on these factors, the insurer determines the sum insured and the premium amount. As the policyholder initiates the payment for the first premium, the plan becomes active.

Missed premium payments can result in penalties or policy lapse. So, the policyholder should continue paying the premium amount on time. During healthcare needs, the insured can claim cashless treatment from the insurance company’s network hospitals or reimburse the expenses incurred in treatment. Knowing how medical insurance works is crucial to understanding before you buy a policy.

What are the Benefits of Medical Insurance?

Medical insurance policies are beneficial in many ways. Here are some of them:

●it helps cope with the increasing medical costs in India by financially covering the policyholder against any health-related expenses.

●Policyholders can claim tax benefits under section 80D of the IT Act for payment of medical insurance premiums.

●It offers cashless treatment from the network hospitals, where the insurance company directly covers all medical expenses.

●Some medical insurance providers like Star Health Insurance provide critical illness coverage for diseases like cancer, heart disease, etc.

●Preventive healthcare expenses—such as wellness visits, health screenings, and vaccinations—are often covered, helping detect issues early.

What is the Need for a Medical Insurance Policy?

The recent pandemic has underscored the critical importance of prioritising health. Even before the pandemic, environmental and lifestyle factors posed health risks, making health insurance essential.

Additionally, medical emergencies can arise unexpectedly, leading to significant financial stress due to soaring healthcare costs. A medical insurance plan safeguards against these expenses, ensuring families are financially secure during crises. 
Thus, individuals can protect themselves and their loved ones from overwhelming medical bills by investing in a suitable policy.

Things to Consider While Buying Medical Insurance

Here are some of the factors that one should consider while purchasing a medical insurance policy:

●Sum Insured Amount
Choose an appropriate sum insured by considering policy duration, tax benefits, existing coverage, and specific ailments included.
●Assess your Healthcare Needs
Evaluating personal healthcare requirements is crucial before choosing a health insurance plan. This includes considering pre-existing conditions and genetic predispositions to certain illnesses, along with age-related concerns and lifestyle habits.
●Deciding on a Premium
The premium reflects the amount paid regularly to maintain coverage and is influenced by factors such as age, type of coverage selected, income level, and existing health conditions. Choosing a premium that aligns with your financial capacity while ensuring adequate coverage is essential.

Once you have evaluated these aspects and purchased a health insurance policy, you are prepared for any medical emergencies or planned hospitalisations within the policy period. However, choosing a reliable health insurer is a must to get comprehensive coverage.

Star Health offers cashless hospitalization at over 14,000 network hospitals across India. Also, their policies cover inpatient hospitalisation, pre- and post-hospitalisation, daycare procedures and more, ensuring minimal out-of-pocket expenses for your healthcare needs.

Also Read:

→ How Much Medical Insurance Do I Require

→ How Much Medical Insurance is Enough in India

→ How to Buy Medical Insurance

→ How to Claim Medical Insurance

→ How to Get Braces Covered by Medical Insurance