September 25, 2007

All about health insurance cover

A health insurance policy is popularly known as mediclaim. It essentially helps an individual cover the expenses that he incurs on treatment of an injury or hospitalisation due to a disease.

It covers expenses incurred on meeting boarding charges, the payments to doctors, cost of anesthesia, expenses on blood, medicines, X-ray etc. The insurance also covers expenses incurred before and after hospitalisation. The period differs from insurer to insurer.

Health expenses tend to go up as age catches up and it is only then that most individuals start thinking of taking medical insurance. This becomes a costly affair as premiums tend to go up by then. Also, the individual is not covered for preexisting illnesses.

It makes sense to buy health insurance when the individual starts earning and is young as the premium charged will be less and the individual will be covered for diseases he develops over the years. If there is a no-claim year, next year the cover either goes up by 5 per cent or there is a 5 per cent discount in the premium.

Under Section 80 'D’ of the Income Tax Act, a deduction up to Rs 15,000 from taxable income is allowed for payments made towards meeting the medical insurance premium. For senior citizens, the limit is Rs 20,000. This deduction is besides the Rs 1 lakh allowed under Section 80 'C’.

With the insurance sector being opened to private companies, several innovative products have been launched. One of them is family mediclaim. Another is cashless mediclaim.

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