Health Insurance, also known as medical insurance is a form of insurance which covers the expenses incurred on medical treatment and hospitalisation. It covers the individual and family against any financial constraints arising from medical emergencies. In case of sudden hospitalisation, illness or accident, health insurance takes care of the expenses on medicines, oxygen, ambulance, blood, hospital room, various medical tests and almost all other costs involved. Thus, by insuring one’s health, he ensures that if he pays an amount of health insurance premium every year depending on the person’s age, then till a certain limit of medical expenses, he/ she would be covered by the insurance company and will not have to spend it from his own pocket.
Basically, since medical expenses are increasing every year, it becomes difficult for someone to suddenly pay about Rs. 2,00,000 to Rs. 3,00,000 towards medical emergencies. Since medical emergencies cannot be postponed or neglected, this unforeseen expense becomes inevitable if health insurance has not been availed. Thus by paying a nominal amount of premium of say Rs. 1,200 per annum, a 35 year old man can get covered till Rs. 1,00,000 of medical expenses per annum. Thus, a sudden expense of Rs. 1,00,000 may seem very high for the individual; however a nominal amount of Rs. 1,200 per annum, i.e. Rs. 100 per month may seem to be a very reasonable cost. This amount however, has to be paid every year; otherwise the cover ceases to exist.
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