Benefits of Health Insurance Policy

Benefits of Health Insurance Policy

The reason why health insurance is important is that it provides a safety net when your health deteriorates as you grow older. Health issues can arise even in young healthy adults and so getting health insurance sooner means lower premiums and protection from the start. Health insurance policies protect you and your loved ones from financial problems that can arise from hospitalization, accidents, disability, and death. 

What are the benefits of health insurance?

There are numerous health insurance benefits to the policyholder and his dependents such as spouse, children, and parents. Purchasing a health insurance policy is one of the most important decisions because of the following reasons. 

Keep family financially secure

Health insurance ensures your family is financially secure such as in the case of family floater health insurance plans. When you purchase such a plan, it becomes easier to manage health insurance plans for all the dependents such as your spouse, parents, and children. In the case of an emergency, you are prepared and do not have to worry about the financial aspects of the treatment. Getting treatment for critical illnesses or any medical emergency can push you into debt but with insurance that doesn’t happen.

Be prepared for diseases

In recent times, it has been found that more and more young people are suffering from a range of ailments that earlier used to affect only old people or those with pre-existing conditions. By purchasing a health insurance policy, you are prepared in case any critical illness is diagnosed which requires a lot of money for treatment. Paying out-of-pocket is not an option in such cases because of the increasing costs of treatment and medical inflation. 

Protect hard-earned money

Your hard-earned money should be spent in places where it matters and a health insurance policy is one of the best places to invest to keep your financial future secure. Sudden medical emergencies are common and so if you have a health insurance plan in place you do not have to drain your savings anymore. With ample financial security, you can plan and manage your money better while knowing it is in safe hands. This means better savings and stress-free life. 

Here is the list of benefits of health insurance

The benefits of health insurance in India are as follows. 

Covers medical expenses 

If one is wondering what are the benefits of health insurance, then it is important to start with what it covers. A health insurance policy covers medical expenses such as in-patient hospitalization expenses. This means if the policyholder is hospitalized for at least 24 hours, the insurance provider will provide cover for doctor fees, anaesthesia, and so on. The other types of medical expenses can be as follows. 

Daycare expenses

These types of medical expenses arise when the treatment does not require a 24-hour stay in the hospital even though they are surgical in nature. This can be the case for eye surgeries, ear surgeries, etc. Daycare expenses can accumulate and having cover for these helps ensure the policyholder gets the required treatment without worrying about the expenses. 

Organ donor expenses

These are covered under medical expenses in some health insurance policies while in others the policyholder can get it as an add-on. It includes expenses that are incurred when harvesting a particular organ in the case of an organ transplant requirement. Organ donor expenses can increase substantially which is why this add-on is a must-have for some people. These expenses include pre-hospitalization and post-hospitalization, organ transplant surgery, post-surgery care, recovery, and so on.

Domiciliary hospitalization expenses

These expenses are incurred when the policyholder gets treated at home provided the person is under the supervision of a medical professional. Several health insurance providers provide this cover even though there is a limit to how many days the expenses are covered for and the type of treatment that is being provided. 

Provides preventive care

When a person purchases a health insurance policy, he can get access to preventive care. This facility is provided by some health insurance providers where the health check-ups are complimentary. Regular check-ups enable early detection of diseases and ailments. It makes it easier to manage and resolve health issues before they spread to other areas of the body and/or become more serious over time. 

Gives access to cashless claim benefit

One of the health insurance benefits is that it provides a cashless claim benefit to the policyholder. In this, the insurance provider of the policyholder pays the hospital directly for the treatment cost incurred. It is helpful in cases of medical emergencies when you do not have sufficient cash in hand but require immediate medical attention. It is a convenient, efficient, and simple process when you have it in your policy. 

The insurance provider will provide a list of network hospitals applicable and the policyholder can only avail of this facility from those hospitals. The policyholder is required to intimate their insurance provider when they are admitted to a network hospital and then sign a pre-authorization form (which is available in the hospital). After the claim is approved, the policyholder can get the required treatment from the hospital. 

Provides reimbursement of ambulance charges

The reimbursement of ambulance fees is one of the benefits of having a health insurance policy. Depending on the Indian state and locality where one needs to hire an ambulance, the charges can be quite high. The policyholder can get their ambulance charges reimbursed when they have this facility available in their health insurance policy thereby saving on paying for ambulance out-of-pocket which saves money. 

Protects from increasing medical costs

Medical costs in India are increasing substantially as ailments are affecting more and more people. Whether it is essential medications or surgery costs in top hospitals, medical costs can burn a hole in one’s pocket without a health insurance policy. One of the many benefits of health insurance policy is that it provides protection and covers a wide range of medical problems that can potentially occur. It also protects from medical inflation that often pushes people’s debt to increase. 

Early buying ensures affordable premium

Being healthy does not mean that a person will never develop health conditions or medical ailments in the future. Buying health insurance early is advised by experts because it is affordable at that time. The more you delay buying health insurance, the more expensive the premiums become. This is one of the health insurance benefits as you can be better prepared for whatever the future holds in terms of your health. 

Provides cover for dental treatment

Teeth are among the most important assets of a person and oftentimes people don’t get a dental check-up unless they are experiencing excruciating pain or spot a visible tooth issue. A health insurance policy can cover the cost of dental treatment which can increase depending on the complexity of the procedure and the advancement of the policyholder’s teeth problem. Note that certain health insurance plans only provide cover for dental treatment when hospitalization is required. 

Covers critical illnesses 

One of the benefits of health insurance policy is that it provides cover for critical illnesses. If it is not available as a standalone plan then you can still get it as an add-on. Critical illnesses include cancer, kidney failure, transplant, and stroke among others. When a health insurance provider provides a critical illness cover to the policyholder, it provides a lump sum amount when any of the illnesses that come under this category is diagnosed. 

Riders provide additional protection

A rider is an add-on to the existing insurance policy. Although health insurance plans provide a wide range of cover, they do not protect against all types of health-related problems and uncertainties. Some people are more susceptible to certain health conditions than others and so riders can extend protection. Riders broaden the coverage thereby protecting you in many ways in case a health emergency arises. Some of the health insurance riders are as follows.  

Maternity cover 

This rider protects the policyholder by covering the medical expenses that are incurred during the birth of a child. Maternity cover is often not part of a health insurance policy. Note that the policyholder can only claim after the waiting period has been completed and this can vary from one insurance provider to the other. 

Hospital daily cash allowance

This rider ensures that the insured person receives a particular fixed daily allowance when he is hospitalized. Even though this is provided for only a few days, it can make a big difference because hospital stays can get expensive quickly. The insured individual can use the daily cash allowance for several types of medical services as required. 

Personal accident cover

This rider provides cover in case a personal accident takes place where the insured person becomes partially disabled, permanently disabled, or passes away due to the accident. The type of benefit that the insured person receives depends on how serious the injuries are and the extent of the disability.  It helps the policyholder manage medical expenses and other expenses. 

Helps fund alternative treatment

Earlier, health insurance did not cover alternative forms of treatment such as Ayurveda and Yoga. However, now that they are helpful in the recovery process, the policyholder can get funds for alternative treatment by opting for a health insurance policy. This is one of the many health insurance benefits. The policyholder can get coverage if he opts for homeopathy and so on at particular centers in India.

Provides restoration benefit

The restoration benefit is when the claim amount is restored to the sum assured. This is among the top health insurance benefits. The restoration benefit is useful in managing medical expenses when the same beneficiary is incurring them. It is also useful when other beneficiaries are incurring medical expenses regularly. Let us say that the sum insured has reached the limit, after that the policyholder must pay from his pocket. With this benefit, that is not the case. 

Restoration benefits can be classified into two categories; partial sum assured exhaustion or complete sum assured exhaustion. In partial sum assured exhaustion, a part of the sum assured is used to restore the sum assured. In complete sum assured exhaustion, the full sum assured is used to restore the benefit. Not all health insurance providers provide both types so it is essential to understand the available type and choose accordingly to one’s needs. 

Cover extends insurance given by the employer

The health insurance policy policyholder purchases extend the cover that is provided by his employer and this is among the top health insurance benefits. Even though most companies and organizations provide health insurance to their employees, it is often limited in what is covered. Purchasing personal health insurance cover ensures all the major aspects are covered and the policyholder is protected in case of an emergency too. 

Tax benefits

Among the many advantages of health insurance, tax benefits are one of the top ones. The policyholder can get an income tax deduction when he purchases a health insurance policy. The deductions are specified in Section 80D of the Income Tax Act, 1961. The policyholder can get a deduction on the premium he pays for the health insurance policy and can also avail of a Mediclaim deduction.

An insured person can get a deduction on the premium he pays of up to Rs. 25,000 on his income tax when he buys the plan for himself, his spouse or his children. He can get another deduction of Rs. 25,000 when he purchases the plan for his parents. The insured person can get a Mediclaim deduction of up to Rs. 50,000 when he is 60 years old or above or a deduction of up to Rs. 25,000 when he is less than 60 years old. 

Non-Resident Indians (NRIs) can claim a deduction of up to Rs. 25,000 if they purchase a health insurance plan in India; whether it is for themselves or their parents. A Preventive Health Check-up (PHC) allowance is provided for those to whom the Mediclaim deduction is not applicable. People who are 60 years old or above can get an allowance of up to Rs. 7,000 and those below that age can get an allowance of Rs. 5,000. 


The importance of health insurance has increased drastically as more people are getting sick due to lifestyle choices, pollution, and several other factors. The benefits and features of health insurance include cover for emergencies, critical illnesses, hospital stays, disability, ambulance charges, and restoration benefits among others. Having a health insurance policy provides numerous advantages such as tax deduction as per Section 80D and protection from financial burden.

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