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Einsurance Guides UK - Insurance Explained

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Health Insurance
Key Concepts in Health Insurance
Insurance is a ready solution as a protection against various hazards that are unexpected and most definitely unpredictable. The ambit of insurance covers various kinds of risks and hazards, right from life insurance to all sorts of general insurance that covers property, vehicles and other valuables. One of the other protections that insurance companies provide is Health Insurance.

Health Insurance
A health insurance cover provides protection against calamities that may strike an individual or a family member.

It covers health related expenses like:
• Operation expenses
• Medical expenses
• Expenses of any special treatment as per the policy conditions
• Any other as per the terms and conditions of the policy taken

How do these health hazards arise?

There are various forms of health hazards that arise due to different reasons in an individual’s personal or professional life. The gamut of activities that an individual undertakes has different repercussions on his/ her personal as well as professional life.

Hereditary health hazards
People need insurance to protect themselves against hereditary health hazards, the probability being high and the expenses rising with every new day.

Occupational health hazards
People are also affected by risks arising out of occupational vulnerabilities. For example, an employee in a mining unit, or a textile dying unit, or diamond factories, to name a few.

Psychological Health Hazards
These are also covered as the expenses generally are high and persist for along time thus draining all the resources of a family.

Life Style Hazards
These risks arise due to the way in which an individual leads his/ her life. People who smoke or drink heavily are exposed to various risks, say cardiac or liver or lung related problems.

Accident Hazards
These are probably the most unpredictable of all the health risks since it is impossible to avoid the consequences of an accident that strikes without notice. The medical expenses are required to be met urgently and the scope to manage is low.

Any Other
Any other health risks that may arise can also be covered under respective policies as per norms determined by the insurer.

Documents required by an insurer
There are various documents that an insurer requires while providing health insurance. They are enlisted below.
• Identification proof issued by the government
• Certificate of disability, in case of disabled members
• Hospital records or proofs
• Details of dependents
• Others

The requirement of documents may also differ according to the policy taken and the insurance company norms. The above mentioned documents are just a few examples.

Expenses Reimbursed Under a Health Insurance Policy
Following expenses are covered by health insurers.
• Expenses of a hospital room and other facilities
• Medical expenses
• Expenses of special medical equipments
• Expenses of medical tests to be conducted for diagnostic purposes
• Any other additional costs of doctors, anesthetists, surgeons etc

The premium on a health insurance cover varies according to the requirements of the individual being insured and the risk that is being covered. For example, an insurer providing a cover for a life style related health hazard may charge a higher premium than for an accident policy.

Premium depends on the following:
• Age of the person being insured
• Income of the person being insured
• The principal amount required
• Number of members being insured
• Any other additional benefits provided

Riders
A rider is an additional benefit provided with an insurance policy. A rider is so named because it depends on the original policy and can not be taken as an independent insurance benefit.

The money-back type is one of the most popular riders among others. The other types are:

• Accidental Death Benefit
This type of rider makes provision for the payment of additional sum depending on the terms and conditions of the policy in case of accidental death.

• Disability riders
This insures a disabled person to receive compensation regularly as long as the disability is medically proven.

• Waiver of premium
Under this type, the insured can continue to have policy cover without payment of premia during disability.

There are other types like Critical Illness Rider, Accelerated Benefit Riders and Additional Insured Riders.

Many corporates also provide health insurance policies to their employees as a part of the employee welfare program of the organization. The need for such benefits has been recognized by organizations the world over because of the increasing risks in day to day life.

 
UK Health insurance

Health is the most important thing in an individual’s life. You never know what may happen tomorrow. The costs of the medical treatments are rising up higher and higher. So to be one the safer side you should always be prepared and have a good health insurance plan. This insurance is a contract between an insurance company and an individual that pays for all his medical expenses. You can renew this contract annually or monthly.

Health insurance policy is either purchased on the individual basis or on a group basis. There are different types of health insurance plans. The first one is the Indemnity plan (fee-for-service). In this policy the individual has freedom to choose the doctor according to his wish. The doctor receives a fee-for-service. Several other types of plans are included under the Indemnity health insurance plan; this includes the flexible spending plans, basic health plan, Health Savings Accounts (HSA), and High deductible health plan (HDHP).

The second type of health insurance plan is the managed car plan. This plan reduces the unnecessary costs for healthcare. Managed care plan also includes several types of other insurance plans such as the Health Maintenance Organization (HMO), Point-of-service (POS), Preferred Provider Organization (PPO). The other health insurance options include the Self-insured health plan and the Medicare.

The people usually resident in UK are provided coverage for their health related issues by the UK National Health Service (NHS). NHS is a healthcare system which is publicly funded in UK. Unlike other insurance systems premiums are not collected here, there is no pre-payment of the costs from a pool, and there is no costs charging at the patient level. This shows that NHS is not precisely an insurance system. But it does accomplish the main objective of insurance and that is to spread the financial menace arising from ill-health.

The general taxation directly meets the costs of running the NHS. The majority of the health care in UK which includes the in-patient care, primary care, long-term health care, ophthalmology, dentistry, etc. are all provided by the NHS. Private health care runs parallel to the NHS and acts as a top-up to the NHS services. These are mostly paid by the private insurance. Private health care is hardly used by the 8% of the people in UK. But the private sector does not provide with all types of treatments.

BUPA, which is one of the major insurers, does not provide many treatments that most of the people need during their lifetime. These excluded treatments by BUPA are freely available from the NHS. The other competitors for the BUPA are Aviva, AXA, Groupama Healthcare, and Pru Health. Recently the NHS capacity has been increased with the help of private sector even though a large proportion of the British public has been opposing such involvement.

As per the World Health Organization, over 86% of the total health care expenditure in the UK as of 2004 has been covered by the government funding and the rest 14% has been covered by the private expenditures.