How does a medical insurance policy work


There may be a variety of uncertainty across the health of an individual due to the fragility of the human body. Hospital bills and medical care are expensive and might cost a great amount. That is when health insurances come into play. A medical insurance not only prepares one for a rainy day, but additionally provides health security cover.

A Health Insurance is a contract between an insurer (medical insurance company) and a person through which the insurer agrees to cover the fee of any medical expenses that will arise in the long run in return for the premiums paid by the benefactor.

That is how medical insurance mechanism works in India:

Selecting a plan- A person can select a medical insurance plan based on his/her needs based on facilities provided, expenses covered, etc. from an insurance company of 1’s selection. In case of pre-existing ailments, different corporations have different policies for canopy. Thus, it is extremely necessary to decide on the best plan for oneself keeping in mind all of the relevant aspects.

READ MORE: How one can reduce the medical insurance premium?

Calculation of premium- After choosing an insurance plan, the premium is calculated for the customer. It’s calculated on the idea of age, income, health problems/ diseases if any. A comprehensive full body check-up is run by the insurance company.

Only after this, a premium payable every 12 months is ready by the corporate and the utmost amount that the insurance covers often called “sum assured” is authorised.

How does the claim work – In case any medical expenses come up as a result of hospitalisation, the claim will be sought in two ways. The primary alternative is cashless. On this method, if the insured goes to a hospital within the insurance company’s network list, all of the expenses can be handled directly by the corporate.

The second option is the reimbursement process. On this process, the bills are initially paid by the insured himself and the expenses are later reimbursed by the corporate to him after submitting the bills and receipts to the corporate.

READ MORE: Seeking to buy medical insurance? 5 riders that you could pay attention to

What happens in case no claim is ever made by the insured- In case the necessity for medical coverage doesn’t ever arise, then the person, during that 12 months, pays a premium for nothing in return. Some corporations, nevertheless, provide a “no-claim bonus” under which the corporate refunds a certain percent of the premium for each 12 months no claim is sought. At the identical time, some corporations are likely to increase the sum assured of a person as a reward for not making any claim.

Health Insurance is sort of a helpful financial product for everybody. Medical insurance plans have quite a few additional advantages reminiscent of tax deduction, free health checkups amongst many others. One should very fastidiously select an insurance cover considering his/her personal needs.


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