When you or a loved one is ill and in hospital the last thing you want to worry about is the means to pay the hospital bill. Hospital expenses reimbursement policy (called mediclaim or Health insurance policy in common parlance) enables you to pay for hospitalization expenses when you or your loved one are unfortunate enough to get admitted to a hospital.

You should take health insurance when you and your family members are healthy because you are unlikely to get the Insurance if a serious illness or disease has already set in. Answer the proposal form fully and completely without hiding any facts as it is better to get the health insurance policy at a higher premium or even not to get it at all instead of paying premium and then not getting the money when the claim arises.

Check the age up to which the policy is renewable, any sub-limits for room rents, any requirements to pay part of the eligible hospitalization expenses yourself (called co-payment), formula for increase in premium if you make a claim, formula for no claim bonus and the coverage of pre-existing disease. Or you can just fill up the form alongside and get competing offers from the leading health insurance companies. Don't forget to ask them about the parameters pointed out above.

Another policy that you may definitely need is a serious illness disability policy (also called Critical Illness Policy). When a serious illness such as a stroke or kidney failure hits you the mediclaim policy only pays for the hospitalization expenses. It obviously does not cover you for the loss of income arising from the loss of job or business due to the serious illness. This is what a critical illness policy covers. You can buy standalone critical illness policies from non-life Insurance companies or take a critical illness rider along with your life insurance policy.

What is health insurance?

Health insurance is a contract entered between an insured and an insurer, wherein the insurer agrees to pay the insured for health care expenses that might arise due to hospitalization, accident, illness, or disease.

Apnainsurance.com Research Bureau

03 Dec 2007

Health insurance is a contract entered between a customer (the insured) and an insurance company (the insurer), wherein the insurer agrees to pay the insured for health care expenses that might arise due to hospitalization, accident, illness, or disease. All these expenses are subject to limits defined in the contract. Typically, the expenses covered are categorized into - hospital room charges, doctor/surgeon fees, medical tests, medicines and related expenses.

Health insurance helps in different ways:

It helps to secure expenses for future illnesses and hospitalization by paying a fraction of the expenses as the insurance premium

It reduces the risk of financial meltdown in the case of expensive medical care as well as post-illness care

It definitely induces a sense of security in the insured - even in the face of rising medical costs, his/her family have a financial back-up in the event of sudden medical emergencies.