LOGISTICS AND INSURANCE — Commercial Studies STD 10 — Question

Health insurance means insurance for protection of health against various types of diseases. In case of ill health, the insured person receives the cost of treatment/hospitalisation upto the insured amount. Mediclaim is the most popular health insurance policy. Under this policy, the insured person gets cashless facility from the specified hospitals. The cost of treatment (upto 5 lacs) in the hospital is directly paid for by the insurance company to the hospital.
Health insurance also covers loss of income from sickness in addition to medical expenses. In health insurance, insurable interest must exist at the time of taking the insurance policy. Mediclaim policy covers consultation fee of the doctor, cost of medicines, and hospital expenses.
Importance: Health insurance offers the following advantages:
(i) By paying small amount of premium, the insured person gets coverage for heavy cost involved in hospital-isation for serious diseases like heart attack, brain tumour, cancer, kidney failure, etc.
(ii) The premium paid for health insurance is allowed as a deduction (up to the specified amount) from taxable income under the Income-tax Act.
(iii) In case of sudden hospitalisation, the insured and his/her family is saved from heavy expenditure.
(iv) Health insurance contributes significantly to the economic development of the country by making the people of the country healthy.
(v) Health insurance industry provides protection to social development.