No one wants to think about an illness or accident and least of all plan for it, but these contingencies of life cannot be ignored.  You may not be able to avoid a sudden illness/ accident, but the amount you end up spending on medical care and their impact on your savings can be minimized.  Also, you can protect your spouse from the economic concerns such as loss of income and medicinal expenditure that unexpected accidents lead to. How? Through an adequate health insurance cover and/or a personal accident cover.

In an analysis done on health by the National Sample Survey Office (NSSO), 2014, compared to the past decade, the cost of treatment in India has grown at double-digit numbers, outstripping inflation rate. This simply means that if your salary hike is to the tune of the inflation, the growth in medical expenses will soon outrun it.  A serious health condition or a sudden accident resulting in disabilities can leave behind a huge financial burden, which might take years for you/ your family to surmount. This is where health insurance or personal accident insurance can be a savior.

How do health insurance or personal accident insurance plan help me?

Simply put, if you have an adequate cover, then in case of an eventuality you will not have to dish out huge amounts of money to cover the medical expenses. The costs will be borne by the insurer. A health insurance, after all, is an agreement between you and your insurer, to bear your hospitalization and all associated medical expenses, as per the terms and conditions you've both agreed upon. You can avail all this at the cost of an annual premium that you pay to the insurance company.

Similar to the fact that you can't predict when an illness hits you, you may be unfortunate to suffer an accident while traveling on road, rail, and ship or in aircrafts or have a serious collision, fall, or injuries from drowning or burns. A personal accident insurance provides cover against accidental death and permanent/partial disability caused due to an accident. This not only protects you but also is beneficial to the nominee you have nominated, who will feel the economic repercussions of your disability due to an accident lesser since the policy will provide them the cover.

Insurance companies offer plans from a sum insured of Rs. 5000 for micro-insurance policies to a higher sum insured of Rs. 50 lakhs and above. The common health insurance policies are usually available from Rs. 1 lakh to Rs. 5 lakh.

Which plan is best for me?

There are numerous insurance policy providers in the market that can offer you feasible policies.  But it's important to recognize that each policy has a different premium, covers different aspects, and are regulated by different policy pointers. Selecting a suitable plan to protect you and everyone in your family can require some research and study. Some crucial factors to be taken into consideration are:

• Premium vs. coverage: Assess if the cover and sum assured are suitable against the premium paid.
• Network hospitals: Be sure that the insurer's network hospitals is big enough and covers establishments accessible for you.
• Room rent limit (applicable in case of health insurance): Since hospital room rents vary as per categories, some insurance plans pay only a part of the actual rent. (It's always best to go for higher or no room-rent limit plans or discuss in details your options.)
• Exclusions and Inclusions: Check what ailments/disabilities or dismemberment due to accidents are excluded. Similarly, when buying a personal accident policy, choose a plan that includes most of your risk factors basis your need.
• Add-ons options/Top-ups: Besides the standard coverage mentioned, can the policy be tailor made to you or your family's specifications or medical needs. Or in case you have some amount of insurance from their employer, but the provided cover is not adequate, can your insurer provide you with a top-up policy. This can also be discussed when your employer has provided a group accident cover.

What is all covered in these policies?

In most health insurance schemes, the standard pointers that are covered are:

• Hospitalization: If you are admitted for treatment in a network or a non-network hospital for more than 24 hours.
• Pre & post hospitalization: Medical expenses including diagnostic reports, medicines etc. for the treatment you are hospitalized.
• Daycare procedures: OPD treatments are not included, but certain procedures such as cataract and kidney stone removal are covered (even if they don't need 24-hour hospitalization).

When it comes to personal accident policies, there is a slight variation. These are:

1. In case of a death, with a personal accident policy, you are covered against accidental death and your nominee/beneficiary receives 100% of the chosen sum assured. A health policy does not provide any such coverage.
2. A personal accident insurance policy provides a cover for disabilities caused due to an accident which can be severe or non-severe which a standard health policy will not cover.
3. Most policies also cover the costs of last rites and funerals.

How do these policies work?

A policy bought to cover expenses arising out of illness or accident help you by providing you the benefit of:

• Direct Payment or Cashless Facility: Under this facility, you will not need to pay the hospital as the insurer pays directly to the hospital. Under the cashless scheme, the policyholder and all those who are mentioned in the policy can undertake treatment from those hospitals approved by the insurer.
• Reimbursement at the end of the hospital stay: After staying for the duration of the treatment, the patient can take reimbursement from the insurer for the treatment that is covered under the policy undertaken.

Protect your family too

The best news about buying a health insurance or a personal accident policy is that you can provide a cover not only for yourself but also for your family. You can opt to go in for:

• Family Floater Health Insurance: Family health insurance plan covers entire family in one health insurance plan. It assumes that not all members of the family will suffer from illness in one time. It covers hospital expense which can be pre and post.
• Senior Citizen Health Insurance: These are plans for older people in the family. They provide covers for health issues during old age. According to IRDA guideline, each insurer should provide cover up to age of 65 years.
• Maternity Health Insurance: Maternity health takes care of both pre and post-natal care, baby delivery (either normal or caesarean), and also other expenses such as ambulance etc.
• Personal Accident policy covers Accidental death: The benefits under this plan is payable to your nominee if the demise arises due to a mishap.

It is therefore suggested that we study our options to choose a comprehensive health and personal accident cover that can provide compensation to us or our dependents in case of an emergency. After all, we can hope for the best, but be prepared for the worst!

This article was written by Ankit Agarwal from Getting Money Wise and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.