What is Health Insurance and why we need Health Insurance ?

What is Health Insurance?
Health insurance is an insurance product which covers medical and surgical expenses of an insured individual. It reimburses the expenses incurred due to illness or injury or pays the care provider of the insured individual directly.
Depending on the type of health insurance coverage, either the insured pays costs out-of-pocket and is then reimbursed, or the insurer makes payments directly to the provider.
 In health insurance terminology, the "provider" is a clinic, hospital, doctor, laboratory, health care practitioner, or pharmacy. The "insured" is the owner of the health insurance policy; the person with the health insurance coverage. In countries without universal health care coverage, such as the USA, health insurance is commonly included in employer benefit packages and seen as an employment perk.

Why get health insurance? 
Everybody at some time in their life, and often on many occasions, will need some kind of medical attention and treatment. When medical care is required, ideally the patient should be able to concentrate on getting better, rather than wondering whether he/she has got the resources to pay for all the bills. This view is becoming more commonly held in nearly all the developed nations.

Health insurance, also known as private medical insurance, is designed to ensure that if you need medical treatment in future, you won’t need to worry about paying for the cost of the treatment. If you’re treated privately, health insurance will pay all or some of your bills. It should get you diagnosed and treated quickly, as well as offer you a prompt referral to a consultant and admission to a private hospital at a time and place that is convenient for you. With health insurance, you’ll have a choice of private hospital from an agreed list provided by your insurer - most hospitals offer a private en-suite room, TV and a choice of food, which you wouldn’t necessarily get as a normal patient. 

Benefits of private health insurance
Shorter waiting times for treatment 
Better facilities 
Faster diagnosis 
Choose from a range of private facilities 
Choose a convenient time for appointments and treatments

Need for Health Insurance 
Medicare or medical costs are rising year on year. As a matter of fact, inflation in medicare is higher than inflation in food and other articles. While inflation in food and clothing is in single digits, medicare costs usually escalate in double digits. For an individual who hasn’t saved that much money, arranging for funds at the eleventh hour can be a task. This is particularly daunting for seniors, given that most ailments strike at an advanced age. One way to provide for health-related / medical emergencies is by taking health insurance. Health insurance offers considerable flexibility in terms of disease / ailment coverage. 
For instance, certain health insurance plans cover as many as 30 critical illnesses and over 80 surgical procedures. The insurance plan disburses the payment towards surgery/illness regardless of actual medical expenses. The policy continues even after the benefit payment on selected illnesses. With health insurance, you are assured of a more secure future both health-wise and money-wise. This makes health insurance policies critical for individuals, especially if they are responsible for the financial well-being of the family.

Types of Health Insurance 

1.  Hospitalization Plans Hospitalization plans reimburse the hospitalization and medical costs of the insured subject to the sum insured. For this reason, the plans are also known as indemnity plans. The sum assured can be fixed -                                                                    i- For a member of the family in case of individual health policies or        ii- For a family as a whole in case of a family health insurance policy For instance, consider a three-member family with an individual cover of Rs 1 lakh each. Each member can claim reimbursement for a maximum of Rs 1 lakh as all three policies are independent. If the family applies for a family health plan cover of Rs 3 lakhs, then any family member can claim medical benefit for more than Rs 1 lakh so long as it is within the overall sum assured of Rs 3 lakhs. 
2. Family floater plans If you want to buy health insurance for your whole family, you should opt for a Family Floater plan. Unlike Individual Health Insurance, the Family Floater plan gives you a single insurance cover for your entire family so anybody in your family can claim in case of hospitalization or surgical expenses. More than one family member too can simultaneously avail the benefits of the Family Floater health insurance plan. Just like the individual plan, you have to pay a premium for the Family Floater plan. Of course, only one of the family members has to pay. Also, just like you often avail a discount by buying goods in bulk, the Family Floater plan turns out to be cheaper than individual policies.
3. Hospital Daily Cash Benefit PlansThe daily cash benefit plan is a defined benefit policy. As evident from the name,the policy pays out a defined sum of money for every day of hospitalization regardless of actual costs. For instance, the hospitalization costs for a day may be Rs 2,000/day and the defined daily limit of the policy could be Rs 1,500/day, in which case the insured receives the latter. On the other hand, if the hospitalization cost is Rs 1,000/day, he still receives Rs 1,500/day. 
4. Critical Illness Plans These are benefit-based health insurance plans which pay a lumpsum amount on diagnosis of predefined critical illnesses and medical procedures. The illnesses are specified at the outset. By nature, critical illnesses are high severity and low frequency and cost of treatment is higher compared to regular medical problems like heart attack, stroke, among others.