Health Insurance is an insurance policy that ensures that you get cashless treatment or expense reimbursement, in case you fall ill. A health insurance policy reimburses the insured for medical and surgical expenses arising from an illness or injury that leads to hospitalization.

The insurance company provides the insured with the facility of cashless hospitalization at a network hospital or provides a reimbursement for the incurred expenses. Furthermore, health insurance cost is subsidized to the insured in the form of tax exemption under section 80D of Income Tax Act, 1961.

Importance of Health Insurance

Health insurance in India is booming at a very rapid speed. But still there is limited penetration of health insurance among the Indian population. According to latest report of National Sample Survey Organization (NSSO) titled “Key Indicators of Social Consumption in India: Health”, only 20 % of the Indian population had got benefits of health insurance coverage.

So we cannot debate on the importance of buying health insurance in India. It is very clear that expenses on medicals, hospitals are increasing day by day. An Individual who do not have health insurance have to spend more than 50% of his income in health of his family. A good health Insurance policy that covers medical costs, hospital expenses, laboratory testing costs and other critical illness is a good suggestion to buy.

How to check the credibility of any Company

In order to go through the history of the insurance company that you are planning to buy the insurance plan from. Below parameters are needed to select a company.

ICR: Incurred Claim Ratio

ICR = (Amount settled as claims / Amount collected as premium)

Customer Experience: Customers share their experiences. You should always consider the mass suggestions.

Find out the Claim Process: Knowing the claim process saves lots of time.

Types of Health Insurance Policies in India

Each Individual expectations related to insurance differs. These expectations can be gained by choosing the right insurance plan. Below are some popular Health Insurance.

Individual Health Insurance Policy: This type of health insurance provides coverage to an individual against certain illnesses, offering advantages like cashless hospitalization, reimbursement, coverage of pre-hospitalization and post-discharge expenses and various add-ons. The entire sum assured is available for only one individual.

Family Health Plan: With family health plan, you can include your family members under the umbrella of a single health cover. Family floater medi-claim policies offer a fixed sum assured to the family members, which can be availed either by one or all members of a family for one or more claims during the tenure of the policy. Family health plans come are more expensive than an individual health plan

Senior Citizen Health Insurance: Senior Citizen health insurance is designed particularly for anyone aged above 60 years and offers protection from health issues during old age. According to IRDAI, every health insurance firm must include people up to the age of 65 years in its plans.

Surgery & Critical Illness Insurance Plans: This plan is usually brought as a standalone policy or as a rider for the treatment of various critical illnesses, such as kidney failure, paralysis, cancer, heart attack etc. As the medication of such illnesses is expensive, the imbursement related to them is also very high. A critical illness is a serious, possibly terminal, disease and is pre-defined by the provider. Most critical illness policies provide a lump-sum benefit if the insured is diagnosed with one or more of the specified terminal conditions.

Maternity Health Insurance: Medical insurance companies today cover additional costs, including those incurred in both pre and post-natal care, child delivery (normal or caesarean), and sometimes include vaccination of newborn babies in a maternity plan. This insurance covers the newborn baby up to the validity of this policy. It also covers transportation fee for ferrying the mom-to-be to the nearest network hospital of her choice.

Personal Accident Cover: These personal accident plans are frequently offered as riders. They include hospitalisation and bear the medical outlay in the event of an accident. These are issued as fixed benefit policies, where a specified sum is paid on the occurrence of unforeseen events, such as accidents, which can result in death or disability of the person. However, the payout is not related to the sum assured.

Pre-Existing Disease Cover: After 2-4 years of policy inception, various policies begin considering pre-existing diseases, e.g. diabetes, hypertension, kidney failure, cancer etc., for claims. Pre-existing disease cover is offered for the policy-specified illness(es) that the insured had before purchasing the policy.

Preventive Healthcare: Undoubtedly, healthcare is very expensive and nobody wants to fall ill. So, now we have preventive health care that takes care of you before you fall sick. Preventive care, such as regular health check-ups, concession in X-ray fees, consultation fee etc., is offered by this policy. By offering various healthcare provisions, this plan aims at keeping you healthy. Preventive care is a medical care rendered not for a specific complaint but for prevention and early-detection of ailments.

Unit Linked Health Plan: Unit- Linked Health Plan (ULHP) has been introduced recently, which offers a unique combination of health insurance and investment. Apart from giving health protection, ULHPs also contribute in building a corpus that can be used to meet expenditures which are not covered by health insurance policies.

Among the ULHPs available in Indian market, ICICI Pru’s Health Saver, LIC’s Health Protection Plus, Birla Sunlife’s Saral Health and IndiaFirst’s Money Back Health Insurance Plan are a few big names. By opting for this plan, one can save a certain amount which can later be used to pay for the treatment of any pre-existing illnesses that are not covered by a normal health policy during the waiting period.

Select Right health Insurance Policy

Features of Health Insurance Policies in India

The cost of healthcare in the modern days is increasing at a crazy rate while one’s earnings do not seem to match up that level. A patient looking forward to availing frequent health check-ups may no longer be able to bear the expenses associated. A comprehensive health insurance comes packed with features that can assist a person in managing expenses associated with medical emergencies and also with preventive healthcare. Understanding the following features can make purchasing a medical insurance policy easy:

Cashless Treatment: Every medical insurance organization has tie-ups with various nursing homes and hospitals across the country called ’empanelled hospitals’. If you are admitted to one of these, you don’t need to pay anything. You only need to mention your policy number and everything else will be taken care of by the hospital and your insurer. This type of plan is preferred because there is no stress of claim reimbursement and arranging documentation. However, if your expenses go beyond the sub-limits specified by the insurance cover or marked as “not covered” by the provider, then you will have to settle it directly with the hospital. Another important thing to remember is that cashless Mediclaim is not available if one gets treatment at a hospital which is not a part of the hospital network of the insurance provider.

Coverage of Pre and Post-Hospitalization expenses: This feature of a health insurance policy takes care of both pre and post-hospitalization fee. It takes into account the costs incurred during a certain number of days both prior to and post hospitalization for a specified period from the date of discharge as part of the claim, provided the expenditures are related to the disease/sickness.

Ambulance Fee: The person is free from burden of transportation fee as it is borne by the insurer. This is an add-on benefit and you should opt for it while purchasing medical insurance.

No Claim Bonus: NCB (or No Claim Bonus) is a bonus provided to the insured if the no claim has been filed for any treatment in the previous policy year. The reward can be offered either as an increment in the sum assured or as a discount in the premium cost. You can avail this advantage on policy renewal.

Medical Check-Up: A Medical plan entitles the insured to receive regular medical check-ups. A free check-up is provided by few insurers, provided you have a good history of no-claim bonus.

Room Rent in Your Health Insurance Sub-limits: A health insurance policy may have various sub-limits associated with it; room rent is one of those sub-limits. General Insurance Companies provide you with a maximum coverage up to the sum assured. However, they can deliberately trim down their liability by introducing the sub-limit clause in the coverage for hospital room rent.

Co-Payment: According to this feature, you can lower the cost of your health insurance. Medical insurance plans offer co-payment option that pre-defines the voluntary deductibles which have to be borne by the insured. So, in the event of a medical exigency, some amount is paid by the customer and the rest, by the provider. Co-payment is a cost-sharing requirement under a health policy, which states that the organization or the person will bear a certain share (in percentage) of the total admissible cost. However, the co-payment option does not have any effect on the sum assured. It allows you to reduce your premium to a certain extent (subject to the insurer and insurance policy).

Tax Benefits of Health Insurance: Health insurance policies entitle you to receive tax benefits under section 80D of Income Tax Act, 1961. The premium you pay towards insurance plans for yourself or your family members, get you a tax rebate, irrespective of whether they are dependent on you or not. The tax benefit offered, with respect to the premiums, is subject to the age of the person and there is a cap on the maximum benefit that can be availed. You can save a max up to Rs. 25, 000 in taxes a year unless your age is above 60 years. If your age is above 60 years, then this cap of maximum tax benefit increases to Rs. 30, 000.
If you are paying the insurance premiums for your parents as well as your own, then you are eligible for tax exemption up to Rs. 55, 000 a year under section 80D, provided your parents are senior citizens.

Health Insurance by Employer: More than 80% of employers in today’s age provide health coverage to their employees. The health insurance offered by an employer covers hospitalization expenses of the employee and his/her family including spouse, children or parents. It is a wise decision to opt for the mediclaim offered by your company as you need not pay any premium. This comes under a group health insurance policy and the premium is paid by the employer, based on the group size and the opted benefits.
However, it might be that you feel your employer’s mediclaim policy is insufficient to fulfil your medical needs. Also, what if you change your job? You will no longer be a member of this plan once you leave the organisation. Hereby Hence, it is necessary to understand the policy terms thoroughly. You can communicate with the HR department regarding what’s covered and what’s not in your health insurance. Mostly, we have observed that employees are more than satisfied with their company providing health insurance, only to find out later that the plan is not sufficient. So, before it’s too late, make your call!

Third Party Administrators: The TPA concept is the brainchild of Insurance Regulatory and Development Authority of India (IRDA), to assist both the insured and the insurer. While it benefits the insurer by reducing their overheads or administrative costs, fake claims, and claim ratios, the insured, too, enjoy improved and fast insurance services.
TPAs are an important players in the sector of health insurance. They have the capacity to handle all or a portion of the claims related to mediclaim insurance. They have tie-ups with the health insurers or self-insuring companies to manage services such as premium collection, enrollment, claim settlement and other administrative services. Often, hospitals and insurance companies organizations outsource health and insurance-related responsibilities to lower their burden. Similarly, an employer may prefer to provide claim resolution of the group health insurance policy via a TPA to manage various aspects of an employer-funded healthcare policy.

Factors needed to Consider Before Purchasing Best Medical Insurance Plans in India

There are few factors that you should consider closely to make the right decision.

Caps and sub-limits: Caps and sub-limits are the thresholds set on various policy-covered expenses. If a health policy has impositions of co-payments, sub-limits, and other caps, this would mean that there will be a policy-stated coverage offered for various expenses. At times, co-pay clause and caps help in reducing the premium of the plan. These, however, would alter the benefits in the long run. To make the most of your health insurance policy, you must understand these factors before you pay for a plan.

Claim settlement record: This is an important criterion to assess the credentials of an insurer. You should always go with a company with a good claim settlement record. Thus, you can ensure that your claims would not be wrongly withheld. Always ask for the company’s claim settlement ratio before purchasing their health plans and save yourself from unnecessary harassment in future.

Scope of cover: Don’t buy a plan by just comparing health insurance premium. Less cost does not necessarily mean a good plan. On the contrary, such a plan might not consider your needs properly. Closely look at what the plan includes. Buying a comprehensive plan is a better option comes to your rescue when you need it the most.

Renewability: It is important to see how many years the plan proposes to protect you. It makes no sense if you are covered by a plan during your youth only to be left without a safeguard when you need it the most – during your old age. Mediclaim policies are usually annual contracts. Once the policy term ends, in the order to continue the insurance coverage, the insured has to pay a premium. This recurring process is called renewal. The policy should be renewed continuously, because if there is a break, then, the person will lose the benefits of insurance.

Cashless Hospital Network: Check if a hospital around you is included by the company you are considering to buy the plan from. You and your family won’t be required to run around collecting documents and filling reimbursements. The provider or its Third Party Administrator should have a tie-up with a range of hospitals. The insured can get admitted in any of these nursing homes without paying anything from the pocket. However, cashless mediclaim resolution is subject to limits and sub-limits, which, in turn, are subject to the sum assured of the policy.

Premium Loading: Premium Loading refers to the increase in standard premium applicable when the insurer perceives a person to be more at risk (of claiming the insurance) in comparison to others. It is strongly recommended that you check the terms and conditions pertaining to premium loading. This will save you from paying an incremented premium after making a claim. This aspect, though ignored in the beginning, usually becomes a bone of discontentment later. The best practice would be to verify the cost fluctuation data of the plan for the previous 5 years at the very least.

Internal Team: Check for plans from firms who have a dedicated internal team for handling Mediclaim. This expedites the Mediclaim resolution process. Most of the players use a third-party administrator to process the claims and do the paperwork. Even though most of these Administrators provide great services, the fact that they are a third-party slows down the process. There are certain rules and regulations to be followed when an administrator processes a claim before it is handed over to the insurance company. These affect the turnaround time.

Floater (family) Size: Everyone has a different family size, so you should always look for the family size allowed under the plan before purchasing it. If you are a person in your late 20s and your parents are in their 40s, 50s or 60s, then purchasing insurance only for yourself does make sense. Alternatively, if you are married with or without kids and have dependent parents, parents-in-law, siblings etc., then a family health plan is best for you. Checking the cost, family size covered, critical illnesses or other benefit will ensure that you are able to purchase the plan you need.

Health Insurance Portability: It is wise to choose a health insurance company that offers health insurance portability. Earlier, policyholders had to stick to a policy just to retain the advantage. Now, you are allowed to switch from one insurance company to another without losing the waiting period advantages earned in your current policy. Moreover, with insurance landscape changing so regularly, insurance companies regularly come up with better policies and it may make sense to opt for health insurance policy portability. Although health insurance portability is free, some companies may charge you a certain fee if you are to port out of their plans to those of some other players. Therefore, make sure you do not pay any charges for medical insurance portability. Health insurance portability is a good thing to check when you are finding the best health policy or mediclaim.

Restore Benefit: With ‘restore benefit’ facility in your health care plan, you can restore your basic sum assured in case you have already spent the same or the multiplier advantage during your policy tenure. Mostly, the benefit cannot be obtained on the same ailment if you have exhausted the existing sum limit.

Restoration assistance proves to be helpful for a family floater health plan, where if the entire sum assured is used in the treatment of only a single family member, the other members are not left uncovered. In such a case, the other family members can avail policy coverage for the illness other than the one for which the expenses have already been compensated by the insurer.
Well, while finalising your health insurance plan, you should consider other influencing factors such as waiting period, sub-limit, claim settlement procedures etc. You can replace restore benefit with a super top-up plan at an affordable price. Moreover, top-up plans are more comprehensive since they comes with less or no restrictions.

Top up Plans: With the rise of medical inflation, having a large medical cover is prudent. But, not all can afford it due to the high premium. This is where a top-up plan comes into the picture. A top up plan reduces the deductibles cost i.e. the portion of claim you pay willingly for the damages before the insurer compensates the rest or up to the sum assured. With a top up policy, you don’t pay until a hospital breaks its defined limit. A top up plan is considered far cheaper than a standalone medical policy.
For instance, if the medical bill is Rs. 6 lakhs with a deductible of Rs. 2 lakhs, you are required to pay only the latter amount and the remaining 4 lakhs will be paid by the insurer. But, you can utilise your health policy to pay the liable amount. Again, the blending of a top-up plan with a medical cover is helpful as the premium you pay is much more affordable than the single plan. For example, if you pay 6,500 as a premium for Rs. 5 lakh regular cover, a top up coverage of Rs. 15 lakh will entail to an additional premium of 5,000, which is anyhow cheaper than a separate policy of identical cover.

Waiting Period: As per the insurance norms, every insured must serve a defined waiting period for any pre-existing illness. It is usually a 30-day period from the day your health insurance policy is initiated. If any claim falls during the waiting period, the insurer has the right to reject the claim for any hospitalisation, except in the case of an emergency. A hospitalisation that arises out of an accident can be registered as a claim and the insurer will compensate the hospitalisation cost. However, the insured is not required to serve the waiting period for subsequent years

Documents Required for Health Insurance Claim Reimbursement

In the event of hospitalization, the policyholder needs to submit certain documents as mentioned below:

Discharge card issued by the hospital.

In-patient hospitalization bills signed by insured for authenticity.

Doctors’ prescriptions and medical store bills.

Claim-form with insured’s signature on it.

Valid investigation report.

Consumables and disposables prescribed by the doctors with complete details.

Bills of doctors’ consultation.

Copies of the Insurance policy from the previous year and the current year/copy of ID Card of TPA.

Any other document(s) asked by the TPA.

Important Points to Remember while buying Health Insurance

Buying insurance is not child’s play and when it comes to buying a health insurance policy, you need to be pretty sure about certain points. A few of such key points are listed below:

What covers are you offered and who offers the covers?

Are add-on features available for later use?

Are individual and/or family floater options available?

What is the Sum Assured?

What are Sum-limits applicable?

Is/are there any discount(s) offered?

Are there any voluntary/co-payment deductible options?

Are policy exclusions mentioned in the documents?

What is the claim process like? – Reimbursement, cashless benefit, immediate claim settlement?

Is there any medical check-up required before proposal acceptance?

Factors That Affect Your Health Insurance Premium

With advancement in medical facilities, health care costs have also increased. The main benefit of health insurance is that it takes care of the healthcare expenses. It offers financial security to you and your family in the event of an unanticipated serious illness or accidental injuries that could drain all your savings. And here’s how the cost of your insurance premium is determined:

Medical History: Your medical history is one of the major determinants of the health insurance premium.
Almost all the insurance companies in India make pre-medical tests mandatory (after a certain age) before buying a health insurance policy.
While, some insurance companies don’t make medical screening mandatory but do consider your current medical conditions, lifestyle-related health risks and medical background of your family.

That is why medical insurance premium for smokers is higher than other people.

Gender and Age: Age is another important determinant of the medical insurance premium. The premium varies based on the age of the insured person.

That is why it is recommended to buy a policy at a young age because the cost of the premium is low for young applicants.
Elderly people are vulnerable to cardiovascular diseases, and other critical illnesses such as cancer, kidney problems etc. For this reason, senior citizen medical insurance premium is usually on a higher side
Also, the cost of the premium for women health insurance is lower in comparison to the male candidates due to lower risk of stroke, heart attack etc.

Policy Term: The premium for a 2-year health insurance plan will be higher than a 1-year plan. However, almost all the insurance companies offer a discount on long-term medical insurance plans.

Type of Health Insurance Plan: The type of policy you select also affects the cost of the premium. The higher the risks involved the higher will be the premium and vice-versa.
With the help of an online health insurance premium calculator, you can compare the premium for different plans.

No-Claim-Discount: If you have not made any claim during your policy term, then you can earn NCB or No-claim-bonus ranging from 5 to 50 percent. It is also one of the most important factor that is taken into consideration while calculating the cost of the premium.

Lifestyle: If you drink or smoke regularly, chances are high that you will be charged more premium amount. In that case, the insurer can also reject your insurance policy request.

Health Insurance Inclusions

The coverage offered by a health insurance policy is subject to the type of policy and the insurance provider. An ideal policy is customizable and suites your requirements in the best way possible. Following are some common health insurance policy inclusions:

In-patient hospitalization expenses

Donor expenses, in case of organ transplantation

During injuries requiring overnight hospitalization

Pre-existing illnesses or diseases

Pre and post hospitalization

Ambulance charges

Maternity or newborn

Health check-ups

Daycare procedures

Treatment availed at home or domiciliary hospitalization

Health Insurance Exclusions

Coverage offered by health insurance policies varies with the insurer; however, certain points are not covered by health policies, and fall under the category of policy exclusions. Following are common health insurance policy exclusions:

Unless an accidental emergency, no coverage or reimbursement offered with the waiting period of the policy, usually initial 30 days.

Coverage of critical illnesses and pre-existing diseases is subject to a waiting period of 2 to 4 years.

Clear exclusion of expenses incurred for maternity/newborn unless a maternity rider has been added on.

Injuries caused by war/terrorism/ nuclear activity/suicide attempt.

Terminal illnesses, AIDS, and other diseases of similar nature.

Cosmetic/plastic surgery, replacement of hormones, sex change and more.

Dental or eye surgery.

Non-allopathic diseases’ treatment.

Bed rest/hospitalization and rehabilitation, common illnesses etc.

Treatment/diagnostic tests, post-care procedures.

Treatment in abroad or by an under-qualified medical professional.

Note: It is recommended to explore each plan to ensure maximum coverage.