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Health Insurance

#What is Health Insurance?
Health insurance is a financial protection against any medical related expenses a policyholder may have to incur during the tenure of the health insurance policy. Technically a health insurance policy is a contract between the health insurer and the policyholder seeking health insurance. As per the contract, the health insurer will pay out expenses related to medical needs of a policyholder, while the policyholder pays a premium amount each year towards the policy. The payment for expenses pertaining to any pre existing diseases a policyholder may have before opting for a health insurance policy are subject to the terms and conditions of the underlying contact or health insurance policy.

Apart from providing medical coverage, health insurance also offers a tax deduction benefit to the policyholder. The premium pad for health insurance is labile for tax deduction under Section 80D of the Income Tax Act, 1961.

#Types of Health Insurance
With increasing healthcare costs and varying needs of different individuals with respect to their healthcare needs, there are various types of health insurance plans on offer today. Health insurance in India can be broadly classified into two distinct categories namely indemnity based health insurance and fixed benefit based health insurance.

Indemnity based health insurance: Indemnity based health insurance plans, also commonly known as reimbursement plans are based on the concept of indemnity or reimbursement. The motive of such plans is to ensure that the policyholder is financially in the same position prior to incurring of any medical related expenses. Indemnity based health insurance plans therefore reimburse medical expenses including the money spent on diagnosis as well as pre and post hospitalization.

The premium of any such plans is based on the total sum assured. Treatment towards accident or illnesses up to a certain limit as per the assured sum is covered under the policy.

Defined benefit health insurance: Defined or fixed benefit health insurance plans are on the other hand offer a pre fixed coverage or a benefit payout irrespective of the actual expense incurred. Critical illness plans as well as hospital cash and surgical benefit plans are examples of a typical fixed benefit health insurance plans.

Individual health insurance plans: Individual health insurance plans are prime example of a mediclaim or indemnity based health insurance. Individual plans offer compensation for expenses that have been borne by the policyholder up to the sum assured limit. So if a policyholder as an individual mediclaim policy with a cover of Rs. 1 Lakhs and spends Rs. 80,000 on medical expenses, the policy will reimburse the spent amount of Rs. 80,000 as per the policy terms and conditions.

Family floater insurance plan: A family floater plan is also a type of indemnity health insurance plan. The only difference between a family floater plan and an individual health insurance plan is that under a family floater plan the sum assured is available for all insured members of the family. For example if a family of four opts for a family floater plan with a cover of Rs. 10 Lakhs, any member can claim an amount up to Rs. 10 Lakhs in one year. Only the remaining amount is available to other members of the plan for the year.

Critical illness plan: Critical illness plan is a prime example of a fixed benefit plan wherein the benefits and payouts are fixed and available only if the policyholder is diagnosed with a pre specified illness. Usually under critical illness plan the insurer pays out a lump sum amount irrespective of the treatments and hospitalization costs.

Senior citizen plan: Since the advances in medical care have meant advancement in average age, insurers are offering insurance plans tailor made for the elderly. These senior citizen health insurance plans are usually meant for individual between 65 to 80 years and covers a large majority of common pre existing diseases. Some senior citizen health insurance plans also offer a lifelong renewal making them apt for the elderly.

Maternity plan: Maternity Heath insurance is usually offered as an add-on or additional rider along with the main health insurance policy. Maternity insurance covers expenses made for hospitalization of the expectant mother including delivery costs for both normal and caesarean. Being an add-on rider, the benefits of a maternity health insurance covers are made available with an added premium charge.

Top up plans: These plans help you to increase your cover with very less premium. Top up plans provide coverage like any health insurance, but come with a basic deductible. For example, if you have a top-up plan of Rs.8 lakhs with a deductible limit of, say, Rs.2 lakhs, it means that the first Rs.2 lakhs of the hospitalization bill will have to be borne by you, and the balance by the insurer. Top ups can be for both individual and floater plans, and is a good way to get an additional cover when you are having other insurance plans like an employer’s insurance.

Personal accident plan: Personal accident health insurance plans offer coverage against any unexpected accidents that may cause severe injury or permanent disability. It offers a lumpsum pay out in case of accidental death or permanent total disability, apart from reimbursements / cashless payment benefit in case of injury.

Surgical benefit plans: It is a standalone policy, which provides coverage for the actual expenses if in case the insured had to undergo any surgical procedures. It covers all expenses related to surgery, along with along with other benefits such as day care procedure benefit etc.

Group or employee insurance plan: Group health insurance plans are offered to a group of individuals usually employees in an organization to offer a financial cushion against any health related eventuality.

#Which health insurance plan is good for me
Type of plan Best suited for
Individual health insurance plans Ideal for single individuals, senior citizens or those who have other plans that cover their family, but opting for a second plan for an additional cover
Family floater insurance plan Best suited for families to get coverage for all members on a floater basis, thereby save premium
Critical illness plan If you are 40+ and your health insurance plan have lesser coverage, it is good to opt a critical illness plan, as it offers a lump sum benefit in case if diagnosed with any critical illness
Senior citizen plan If you are getting insured for the first time after retirement
Maternity plan Ideal for newlywed couples
Top up plans If you have an employer insurance or another health insurance with lower sum assured, then a top up plan helps you to get higher coverage at lower premium
Personal accident plan Suitable for anyone for an additional cover against any accidental death. It comes with a very low premium
Surgical benefit plans Ideal for anyone with a health insurance with lower sum assured
Group or employee insurance plan Provided by employers to their employees

#Importance of Health Insurance
The rising medical costs along with the high inflation means that any sudden illness can put off the entire financial plan and deplete all the savings in one go. Health insurance is therefore an essential protection that not only ensures savings are not depleted in the event of a medical emergency.

  • Health insurance with its cashless benefits ensures that medical facilities are within reach even without the need of any immediate liquid cash.
  • With a medical insurance in place, any health related eventuality even while travelling both domestically and internationally may have your covered.
  • Health insurance covers both pre and post hospitalization costs.
  • Health insurance offers a peace of mind which ensures the treatment needs are taken care of allowing the policyholder and the family to focus on treatment and not finances.
  • Comprehensive health insurance plans can cover spouse, children and dependants making it a perfect plan for the entire family.
  • Health insurance plans come with a tax savings benefits allowing tax deduction under Section 80D of the Income Tax Act, 1961.
#How to compare Health Insurance Online
Comparing health insurance plan online offers a great way to ensure that you choose the right health insurance policy as per your needs. Here are few steps that will help you:

Step Description
1 Visit a third party aggregator website: The best way to compare health insurance online is by visiting a third party aggregator website. This allows a single platform to compare all health insurance plans without having to individually check plans offered by each health insurer.
2 Enter all details asked for: Insurance aggregator platforms seek personal details like age, gender, lifestyle habits etc and suggest the best possible health insurance plans suitable for the individual.
3 Check detailed listing: Check the included detailed listing of all plans that suit the need of an individual.
4 Check all features of the shortlisted plan: Now you can shortlist few plans and compare complete policy information along with details of the plan its inclusions, exclusions, and liable premium.
5 Check reviews: There will be a discussion platform and rating system where previous health insurance owners are able to rate the policy and the insurer. This can be value for a new individual to choose the right health insurance company based on its product profile and customer service approach.
6 Click buy and make payment: Now after doing all the homework, you just need to click ‘buy’ for the selected plan, submit documents asked if any and make the payment
7 Wait for policy delivery kit: Your policy will be issued in few hours and you will get an email policy document. An insurance kit with all documents and cashless card will be delivered to your address in next 15 to 30 days.

#Steps to file a Health Insurance claim
The health insurance claim process will depend on the type of health insurance. Knowing how to file for claims is an important step to avoid any disappointments or clam denials. Health insurance claims can be broadly classified into two distinct types names cashless claim process and reimbursement claim process.

Cashless claim process: Under the Cashless claim process, the policyholder does not have to spend money upfront from their pocket to avail any medical facilities. The bills are settled between the insurer and the hospital directly. Here are the common steps involved in a cashless claim process

Reimbursement claim process: Under the reimbursement claim process, the policyholder who has been admitted to the hospital pays for the treatment upfront. Subsequently the insured can claim the money spent from the insurer, by showing the exact amount of money spent by revealing the adequate bills. Once the insurance company approves the claim, the insured will get the amount reimbursed into their account.

Step Cashless claim process Reimbursement claim process
1 The insured individual checks the networked cashless hospital as per the insurance policy and shortlists the hospital for treatment. The insured gets admitted to the hospital or nursing home of his or her choice and seeks treatment for the ailment.
2 The insured informs the health insurance company at least 3 to 4 before getting admitted to the hospital Post the treatment the insured pays the bills from his or her own pocket.
3 The insurer then receives the cashless form request and notifies both the insured and the hospital for the same. The insured then files a claim form with the insurance company either online or offline as per his preference.
4 The insured will need to show his or her cashless health insurance card at the time of admission to the hospital. All medical expenses thereafter will be borne by the insurance company as per the terms and conditions of the insurance policy. Details of the investigation report, the original discharge card, medical certificate, all cash memos, all original bills and receipts must be attached with the dully filled claim form.
5   The insurance company evaluates the claim and approve or reject depending on the case.
6   Once approved the insured gets the money spent reimbursed as per the terms and conditions of the insurance policy.

#Why you should buy health insurance policy
One of the most common questions asked to a lot of financial experts is by individuals on the reason they must buy health insurance. Here is the answer for this common question:

Protection against rising cost of medical treatment: Health insurance offers protection against the rising medical and healthcare costs. A normal surgery like getting operated for a common ailment like appendicitis with 1 or 2 days hospitalization can easily dent your pocket anywhere between 2 to 3 Lakhs. The prices are even higher for more complicated surgeries or ailments like heart disease etc. Health insurance offers a financial protection against any such rising medical healthcare costs at the payment of a nominal premium every year.

Converge for pre and post hospitalization expenses: Health insurance not only offers cost coverage for your hospitalization bill but also covers any pre and post hospitalization expenses. These include diagnosis charges, charges of a doctor’s consultation fee as well as any post operative care expenses etc as per your selected health care policy.

Cover availability for pre existing disease after a lock in period: The urban lifestyle today has lead to many diseases becoming common with every household. Health insurance policies offer a lock in period after which they offer cover to such pre existing diseases. So for people having any pre existing disease, the sooner one opts for health insurance the better it is in terms of coverage offered post the lock in period.

Tax benefits and peace of mind: Health insurance not only offers a protective cover and peace of mind against any medical emergency but also offers an additional tax deduction under Section 80 (D) of the Income Tax Act. You can avail a tax deduction of up to Rs. 25,000 for premium paid for health insurance for self if you are below 60 years of age and Rs. 30,000 if you are a senior citizen.

Cashless hospitalization benefits: Health insurers offer cashless hospitalization benefits where one does not need to spend cash upfront at the time of admission to the hospital. This means that any medical emergency can be tackled without worrying about liquid cash making and not worrying about claim rejections.

NCB and family discounts make health insurance pocket friendly: Health insurers offer a no claim bonus as well as discounts for family members getting health insurance from the same insurer. All this makes health insurance quite pocket friendly compared to the benefits on offer in terms of adequate financial protection.

Extensive coverage: Many health insurance plans today offer coverage towards maternity expenses including pre natal and post natal expenses. In addition coverage for Ayurvedic, non allopathic and alternative treatments, OPD and day care treatment, treatment at home and daily cash allowance for attendant are also on offer by health insurers as per the terms and conditions of the selected policy.

What decides your premium
Your premium is decided by few factors like:

  • Your age
  • No. of members included in the plany
  • Pre-existing medical conditions
  • Lifestyle habits
  • Type of plan you choose
  • Add-ons and optional extra benefits you choose

#Documents required to buy health Insurance
Anyone buying a health insurance online would be required to furnish a few documents to the insurance company.

  • Age proof - (Any One)
    Driving License, Passport, Voter ID card, Birth certificate, etc
  • Identity proof – (Any One)
    Driving License, Passport, Voter ID card, PAN card, Aadhar card, or any document which proves citizenship
  • Income proof
  • Address proof – (Any One)
    Driving License, Passport and Utility Bill should clearly mention the permanent address
  • Income proof – (Any One)
    Salary Slip, Form 16, ITR
In addition, some plans require:

  • A medical check-up, usually for people above the age of 45 years in order to make sure they do not suffer from any chronic illness.
  • Passport Size Photo for a record of the insured person`s identity for future reference
General Inclusions and exclusions in health Insurance
While the inclusions and exclusions in any health insurance plan remains subjective to the exact terms and condition of the health insurance plan, the age of the insured, the type of disease and treatment followed etc, here are some general inclusions and exclusions for health insurance plans.

Inclusions Exclusions
Inpatient hospitalization expenses: Health insurance policies cover all in-patient hospitalization costs like hospital room rent, cost of medication, operation theater charges, lab tests and any such associated expenses related to the treatment that the policyholder is receiving. Pre Existing Diseases: Most of the health insurance companies offer coverage for certain pre existing diseases after a lock in period ranging from 2 to 4 years
Day care treatment: Health insurance companies today offer cover for OPD and day care treatments. Pregnancy and Childbirth: Unless otherwise specified, most health insurance plans to not include medical coverage for pregnancy and child birth related expenses. Any medical costs for abortion are also not included under the cover of a health insurance plan.
Alternative Treatments: The new IRDAI regulations allow Ayurvedic and alternative medical treatments if undergone in institutions recognized by the government or accredited by Quality Council of India or National Accreditation Board on Health. Cosmetic Treatments: Cosmetic treatments are part covered under general health insurance policy unless the cosmetic treatment is part of the regular treatment like plastic surgery post an accident etc. Expenses including cost of spectacles, contact lens etc are also not covered
Pre/post-hospitalization expenses: Most health insurance plans offer coverage for both pre and post hospitalization expenses Dental and ENT Treatment: Most dental and ENT treatments are considered to be part of cosmetic treatments and are not covered under the ambit of a general health insurance policy unless specially specified in the policy terms and conditions.
Daily cash allowance for attendant: To compensate the expenses for food, travel for family members between home and hospital, health insurance plans offer a daily cash allowance restricted to a pre fixed number of days. Such allowances usually do not need submission of bills to support the claims. War or Nuclear Weapon Related Damages: Any War and nuclear weapon related damages are not under the ambit of most health insurance plans.
Domiciliary Treatment: Treatment of illness done at home in case of emergency and which would normally need hospitalisation will be covered in the policy Expenses in the first 30 days: No treatment other than injury is covered in the first 30 days
Organ Donor Expenses: Covers treatment expenses for organ donor. Sexually transmitted diseases: Any condition directly or indirectly caused or associated with sexually transmitted disease like AIDS
Ambulance cover: Expenses met for ambulance expenses at the time of hospitalization will be covered as per the policy terms Hospitalisation for investigation only: Any Hospitalization primarily for investigation or diagnosis purpose only is not covered in most policies except some
Annual Health Checkup: Most policies provide Annual Health Check-up for policyholder and all members covered by under the policy, upto a certain limit Suicide: Any act of self destruction or self inflicted injury like suicide is not covered

Quick look at leading health Insurance Companies in India
Insurance Company Incurred Claim Ratio Grievances Solved Network Hospitals Number of Policies Issued
Apollo Munich Health Insurance 54.99% 99.6% 4000+ 6,81,314
Bajaj Allianz General Insurance 70.41% 97.5% 3700+ 4,73,346
Bharati Axa General Insurance 86.84% 99.1% 5000+ 21692
Cholamandalam MS General Insurance 72.91% 99.6% 2600+ 75189
Cigna TTK Health Insurance 48.14% 98.2% 4000+ 1,23,921
Future Generali Health Insurance 77.31% 100.0% 4300+ 41310
HDFC ERGO General Insurance 76.9% 99.5% 4800+ 4,72,566
ICICI Lombard General Insurance 80.38% 98.3% 4500+ 8,90,383
IFFCO Tokio General Insurance 81.96% 99.9% 3000+ 1,56,118
L&T General Insurance 77.83% 100.0% 2800+ 71931
Liberty Videocon Genral Insurance 79.14% 99.4% 3000+ 10918
Max Bupa Health Insurance 51.96% 100.0% 3500+ 3,07,007
National Health Insurance 97.25% 96.5% 6000+ 17,80,030
Reliance General Insurance 92.23% 97.6% 4000+ 80625
Religare Health Insurance 50.52% 98.9% 4500+ 3,20,316
Royal Sundaram General Insurance 78.13% 99.2% 3000+ 1,88,662
SBI General Insurance 75.01% 95.8% 4400+ 1,98,876
Star Health and Allied Insurance 60.51% 98.7% 6000+ 25,79,591
Tata- AIG General Insurance 72.32% 100.0% 3000+ 1,60,790
New India Assurance Health Insurance 91.26% 96.7% 1200+ 17,85,302
Oriental Health Insurance 112.11% 95.1% 4300+ 13,78,773
United India Insurance 107.06% 99.7% 7000+ 11,60,432
Universal Sompo General Insurance 70.91% 100% 5000+ 1,62,577

Source: IRDA Annual Report 2016-17*