Health Insurance Meaning & Definition Explained

Health insurance is insurance that pays for unexpected medical costs brought on by a disease. These expenditures may be associated with the price of hospitalisation, medications, or the cost of medical visits.

The two fundamental types of health insurance are:

  • Mediclaim policies: The most fundamental kind of health insurance policy is a mediclaim or hospitalisation policy. When you are admitted to the hospital, they pay for your care. The reimbursement is based on actual hospital costs incurred by providing original bills. *
  • Critical illness insurance policies: Specific life-threatening conditions are covered under critical illness insurance policies. These illnesses might need ongoing care or possibly a lifestyle change. In contrast to mediclaim policies, the reimbursement is based on the critical illness coverage that the consumer selects rather than on actual hospital costs. *

The insurance allows the freedom to utilise the money for different medications and lifestyle changes.

Why is health insurance necessary right now?

Nobody intends to get sick or harmed, but anyone might develop a severe illness at any time. The expense of medical care is steadily increasing today. The money you have built up over time may be severely strained by the cost of the illness’s treatment.

Smart people have taken the required safety measures to insure their health early. Health insurance is an advantage you might need in an emergency. Your whole funds for your children’s education, marriage, home purchase, or even retirement can be wiped out by one illness. You wouldn’t want your family’s hopes dashed due to a simple ailment, especially if you could have them covered by some insurance policy.

Getting a health insurance policy is advantageous when you are young and healthy. In addition to your premium going up as you age, the insurance company may decide not to provide health coverage for you if you are above a certain age.

How do I pick a reputable health insurance policy?

Anyone with health insurance will tell you that getting one is among the wisest decisions a person can make. Now that you’ve decided to purchase health insurance, you need to understand how to pick a solid health insurance strategy that will meet your needs. The following are the health cover you should receive from a good policy:

  • Protection from a variety of serious illnesses
  • Flexibility in selecting your health insurance
  • Even if your health condition changes throughout the policy’s term, there won’t be a premium increase
  • Long-term coverage that extends into old age
  • For convenient access to medical care, an extensive hospital network


Either all of your hospitalisation costs may be reimbursed by a mediclaim policy, or the hospital bills may be settled via a cashless facility. When a critical disease is discovered, a critical illness insurance policy pays out a flat payment to you. You don’t need to be admitted to a hospital for the same. You, therefore, require both a mediclaim policy to pay for your hospitalisation costs and a critical illness insurance policy to pay for your lost wages and other illness-related expenses.

* Standard T&C Apply

** Currently, there are 2 tax regimes in India – new and old. To get the tax benefit you desire, choose the correct one after consulting an expert. You can opt for a regime change during the next financial year.

# Visit the official website of IRDAI for further details.

## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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