Health insurance is mutual agreement between the insurer and the insured. The insurer is your insurance company or the insurance agent and insured is the one who buys the health policy. With health insurance, the insured gets a health cover or medical expenses in case of unfortunate accidents, hospitalization, etc. The medical coverage normally includes surgical operations, hospital nursing care, fees, pathology tests, hospital accommodation fees and some other expenses like doctor consulting fees, regular check-ups.
Mr. X buys mediclaim policy with Sum Assured equal to 4 lacs. In this case, the insurance company will pay the insured medical expenses to a maximum amount of 4 lacs. If Mr. X buys a family health plan with Sum Assured equal to 10 lacs. In case of events where Mr.X’s family member’s are hospitalized, then insurance company will take up all medical expenses up to limit of 10 lacs. To illustrate further, suppose Mr. X’s son and wife are hospitalized. Their hospitalization expense comes to the cost of 2 lac for his son and 5 lacs for wife, then for Mr. X whole insurance amount will be covered up since he took health plan of 10 lacs. Also, he will be left with 3 lacs to cover expenses for further treatments.