Friday 27 November 2015

Medical Insurance in India

India a huge population of around 1.3 billion people, historically our healthcare sector has been largely unorganized; people have always trusted the words and prescription of their local doctor without much research or secondary consultations. Due to this sector being largely unorganized and also because of lack of proper medical facilities our country Healthcare insurance sectorhas not generated the required attention it needs in a country of such a huge population. People have always struggled to fulfill their basic medical needs and according to most of them a proper medical insurance is not one of them.


If we look at the figures, in 2011 3.9% of India’s gross domestic product was spent on healthcare, out of this 3.9% medical insurance covers around 5-10% of expenditure. This is one of the lowest even in developing countries let alone the developed ones. This scenario is slowly but surely changing driven mainly by the need of the people, increasing awareness and economic liberalization. People are now starting to realize the value of a proper healthcare policy. The entry of private players in this sector and increasing advertisement through various channels has educated people about the need to be financially covered for all medical reasons. Most of these is also generated by medical policy provided by the employers of the country.

In India there are broadly two types of medical insurance
  1. General medical insurance
  2. Critical illness insurance
General medical insurance is the one in which the provider covers cost of hospitalization, medical expenses etc. for all the conditions for which the individual has been insured under the policy. There could be different kinds of medical insurance as well-Individual medical insurance, overseas medical insurance, Group medical insurance are few broad categories. The group medical insurance is the one in which any employer has a deal with a provider to insure their employees for some medical benefits.

Critical illness insurance is one whichprovides only for critical conditions, threats of major ailments etc. this is predefined in the policy as to which major ailments will the person be covered for.

Most of these policies are tax exemptible for the premium you pay for them by the government of India as an added motivation for people to buy medical insurances. The detail of this is under section 80D of the income tax policy. Another thing to know is the third party administrators who are the middlemen between insurers and customers; they help in claims processing for customers and on the back end work with hospitals and insurers.

In India People still are in involving stage when it comes to choosing the medical insurance they should go for but for the decisions that should be made following criteria should be kept in mind:- sum assured, age, current health condition, medical history , lifestyle, conditions covered in the policy, family or individual policies, hospitals covered etc. In general it is considered best to stick to simple and basic rules and not be jazzed by few additional features of policies as in that case people end up paying high premium only.

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