Another flaw that is prevalent in the industry is being under-insured, for instance, a 50-year individual who ideally should take a medical insurance policy offering a cover of (say) Rs 5 lakh-considering his age and vulnerability of falling ill, ends up taking a medical insurance cover of a mere Rs 2 lakh.
"Even those that are covered are under-insured and unaware about it," said Sanjay Datta, chief, underwriting and claims, ICICI Lombard General Insurance.
1. Safety net from high medical costs: The medical costs have dramatically risen of late. So, when the medical emergency strikes, consumers end up dipping into their savings, taking a toll on their future plans. Ms Punja of Cigna TTK Health says a whopping 62% of Indians burnt a hole in their pockets by paying for their own medical expenses. It highlights that Indians primarily depend on their own savings when it comes to funding health emergencies.
Why To Take Health Insurance Cover. Five Things To Know
2. Save income tax: The insurance premium not only helps prevent exorbitant medical costs, but also helps you save income tax. "Payments made towards health insurance premiums are eligible for tax deductions under section 80D of the Income Tax (I-T) Act. Individuals up to 60 years of age can claim a deduction of up to Rs 25,000 for the health insurance premium paid for themselves, or for their spouse, children," said Mr Datta.
3. Save tax on preventive health check-ups: Another way to save medical costs and income tax is to carry out the preventive check-up. "A health insurance policy allows you to avail tax deduction for any expenses incurred for preventive health check-up, however most people end up spending money for the check-up but miss out on claiming the tax benefits," Ms Punja informed.
4. Protection from high OPD, diagnostic costs: Not only mainstream medical costs, but also the cost of OPD (out-patient department) expenses, diagnostic tests are also on an upswing in view of high medical inflation, factors that rationalise the buying of a medical insurance policy. It is noteworthy that the medical policies not only cover the hospitalization costs but also the expenses incurred towards OPD and diagnostic tests before and after a stipulated time period as prescribed by the policy. "Keeping in mind the high medical inflation rate, medical expenses for diagnostic tests and Out Patient Expenses (OPD), it is important for individuals to buy a health insurance policy for themselves and their families," said Ms Punja.
5. Benefits to senior citizens: In the Budget 2018, deduction limit on health insurance premiums was raised to Rs 50,000 from Rs 30,000 earlier for senior citizens. In the Budget, deduction of medical expenses for specific illnesses was also raised this year for senior citizens to Rs one lakh.