About health insurance and medical insurance: Policies, types, importance, features and benefits

It is said that nothing is more important than health.  Taking care of your health is, therefore, important. But what happens when a medical emergency comes your way unannounced? That’s where health insurance comes to your rescue. Given the present lifestyle and the stress associated with it, we are at a higher risk of falling sick.

Health insurance policies are designed to cover the medical expenses in case of such an emergency. A health insurance policy gives you access to the best healthcare. Your healthcare needs are covered when you get health insurance. Once you have the right health insurance, you can brave any illness or medical emergency, without worrying about the mounting bills.

Unless you buy the right health insurance and protect yourself and your, a medical emergency can leave a dent in your savings. Why wait for an emergency to happen? The early bird catches the worm, doesn’t it? There are various online health insurance policies available which can help you.

Given the above, it is essential to get a health insurance cover at the earliest. You can browse through the plethora of options at your disposal. The health insurance policy should be suited to your specific needs.

 

Health insurance policy

Let us understand what the meaning of a health insurance policy is. Simply put, a health insurance policy is a binding contract issued between the insurer and an individual. Under the contract, the insurer promises to pay for health care reasonably required by the policyholder to treat illness or injury. If the insurance policy is issued to an individual, the individual applies for the policy and pays the premiums either directly. Typically, in individual health insurance, the individual policyholder is insured. To extend the cover to the family, a family health insurance policy has to be obtained. These plans work out to be cheaper than an individual health insurance policy. Selecting health insurance based on your needs is thus very important.

 

Online health insurance and mediclaim policy

A mediclaim policy provides the policyholder with financial assistance in case of a medical emergency. It provides the coverage for hospitalization and treatment towards accident and pre-specified illnesses for a specific sum assured limit. The medical premium is based on the sum assured. It reimburses your actual medical expenses, either through direct reimbursement or cashless hospitalization opportunities.

In contrast, online health insurance provides much broader coverage. It offers a comprehensive cover that extends further than hospitalization expenses. Other than cashless treatment facilities, online health insurance also provides pre and post hospitalization cover, ambulance charges, medical check up facilities.

 

Types of health insurance

There are various types of health insurance policies available in India. These are classified based on the cover they provide. The policies are targeted to each section of the society – individuals, families, exclusively for senior citizens etc. Broadly, the health insurance policy can be classified in the following categories:

-Individual health insurance policy: It is specially designed to provide coverage to an individual against a variety of illnesses with cashless hospitalization and other add-on benefits.

-Family Floater health insurance policy: Under this health insurance policy, you can get coverage for yourself and your family under a single insurance policy. This insurance policy offers a fixed sum insured amount for all the family members. A single health insurance policy can cover all your family members against diseases under a single cover. It is cheaper than obtaining individual health insurance policies and pay premiums separately.

-Surgery & Critical Illness policy: This is a standalone health insurance policy which provides coverage against serious illnesses like- cancer, kidney failure, heart attack, paralysis etc. The premium paid for such policies is very high because the treatment of these diseases is extremely expensive.

-Preexisting Disease Cover: Few insurers also offer coverage against pre-existing diseases. These diseases could be diabetes, hypertension, cancer etc. This means that the insurer is already aware of the disease that a policyholder is suffering from. The coverage is provided for any treatment of these illnesses. Before obtaining these policies, the insurer will insist that the policyholder undergoes a through health check up.

-Senior Citizen health insurance policy: This insurance policy is specially designed to protect the senior citizens from various health issues during old age. IRDA, the insurance regulator, has directed every insurer to provide cover for people up to the age of 65 years.

-Preventative Healthcare: This plan offers preventive care treatments like regular checkups, consultation charges and other tests or x-ray fee concessions. The objective of this health insurance policy is to keep an eye out for any potential diseases. This policy offers health benefits as it makes the management of your health and well being much easier.

 

Importance of health insurance

High-quality health care affects health and wellness. A health insurance policy is a contract between an insurance company and a policyholder to provide coverage for high and unexpected health care costs. To receive the benefits, the policyholders have to pay a premium. However, the outcome of the coverage provided by a good health insurance policy outweighs the investment made in the form of premium. The premium paid is much less than the amount required is paid fully out-of-pocket.

It is important to buy a health insurance policy for yourself and your family. Quality medical care is expensive. Private hospitals provide services at a premium. Without a robust health insurance policy, any medical emergency can burn a huge hole in your pocket. A health insurance policy is your cushion when an unforeseen emergency strikes. If you are the breadwinner of the family, the health insurance will take care of the worries of your family.

The importance of having health insurance should not be dismissed or underestimated. The medical costs are sky rocketing.  A small procedure or hospitalization can completely wipe out a lifetime of savings. With inflation, the costs of all medical procedures have gone up significantly. Hospitalization for a few days after a procedure only adds more zeros to your invoice. With a health insurance policy, you can afford the sky-high costs of healthcare.  All the benefits can be availed on the payment of a premium.

A good health insurance policy would usually provide comprehensive coverage. It would cover the expenses made towards doctor consultation fees, costs towards medical tests, ambulance charges, hospitalization costs and even post-hospitalization recovery costs to a certain extent.

 

Benefits and features of a health insurance policy

As indicated above, a good health insurance policy should provide comprehensive coverage. We have listed below the key features of a good health insurance policy. The benefits of health insurance policies are formulated based on the specific needs of the individuals, families and senior citizens.

These are typically the coverage provided under most individual and family floater plans:

In-patient Hospitalization: Medical expenses incurred due to the hospitalization of any person covered under the family health insurance plan are covered.  The hospitalization should be for more than 24 hours.

Pre-hospitalization Expenses: Before a hospitalization, expenses may be incurred as several tests have to be conducted. These expenses are termed as pre-hospitalization expenses.  A family health insurance plan will cover the cost of these expenses.

Post-hospitalisation Expenses: Any medical expenses which may be incurred once the patient is discharged from the hospital are termed as post-hospitalization expenses. Therefore, if any diagnostic tests have to be conducted after discharge, the family health insurance plan will provide coverage for such expenses.

Hospital Cash: Several family health insurance plans provide a daily allowance in case of hospitalization of the patient. This can be utilized to cover the cost of the transportation or other basic requirements of the person who is attending the patient hospitalized.

Day care treatment: In a few instances, hospitalization may not be required.  The medical condition may be treated through a day care stay in the hospital. For example, a cataract surgery takes only a few hours. Policies also cover for such day care treatments.

In addition to the above, various policies also provide a cove for pre-existing diseases. These diseases could be diabetes, hypertension, cancer etc. This means that the insurer is already aware of the disease that a policyholder is suffering from. The coverage is provided for any treatment of these illnesses. You can also obtain a standalone critical illness policy. This health insurance policy provides cover against chronic diseases. Subject to the terms and conditions of the policy, typically such a policy will provide a lump-sum amount incurred for the treatment of such condition.

 

FAQs

Are there any tax benefits which can be availed through health insurance plans?

The premium paid towards the insurance policy can be claimed as a tax-saving deduction under Section 80D. A taxpayer is permitted deduct up to Rs 25,000 annually for a health insurance policy, where the premium is paid for yourself. In case the premium is paid for a parent, a deduction of Rs 30,000 can be claimed.

What is the claim settlement ratio?

Claim settlement ratio would indicate the ratio of claims settled against claims reported during the year. Always make sure to check the ratios of your health insurer before you purchase the plan.

The major reasons for refusal of claims for health insurance are:

-Related to pre-existing diseases
-Related to waiting Period
-Hospitalization not justified
-Diagnostic/Investigation purpose
-Other Exclusion Clauses of the policy
-Misrepresentation/Fraud
-Experimental/Unproven Treatment

Is there a waiting period for claims under a health insurance policy?

 Usually, there will be 30 days waiting period, starting from the policy inception date. During this period any hospitalization charges will not be payable by the insurance companies. However, emergency hospitalization occurring due to an accident is excluded. There is no waiting period applicable for subsequent policies under renewal.

What is the maximum number of claims allowed over a year?

Unless the policy specifies a cap, any number of claims is allowed during the policy period. But remember that the sum insured is the maximum limit under the policy.

What is a "health check" facility?

Some health insurance policies pay for specified expenses towards general health check up once in a few years. Usually, this is available once in four years.

What are the factors that affect Health Insurance premium?

Age is a major factor that determines the premium. Previous medical history is another major factor that determines the premium. Claim free years can also be a factor in determining the cost of the premium as it might benefit you with a certain percentage of the discount.

Can the health insurance policy expire if it is not renewed on time?

Usually, a grace period of 15 days is available to pay the premium from the date of expiry of the policy. However, coverage would not be available for the period for which no premium is received by the insurance company. The policy will become nonexistent if the premium is not paid within the specified grace period.

Can the policy be transferred from one insurance provider to another provider without losing the benefits?

The Insurance Regulatory and Development Authority (IRDA) has issued a circular making it effective from 1st October, 2011, which directs the insurance companies to allow portability from one insurance company to another and from one plan to another, without making the insured to lose the renewal credits for pre-existing conditions, enjoyed in the previous policy. The sum insured under the previous policy will continue.

What is a cashless facility?

Health insurance companies have tie-up arrangements with several hospitals all over the country. Through these tie-ups, the hospitals become part of the network.  If a health insurance policy offers the cashless facility, a policyholder can take treatment in any of the network hospitals without having to pay the hospital bills. The payments to the hospital are made by a third-party administrator who acts on behalf of the insurance company.

In case of any expenses beyond the limits or sub-limits allowed by the insurance policy or expenses not covered under the policy, the cashless facility will not apply. The policyholder will have to separately pay for those. Cashless facility is also not available in the event the policyholder does not avail the treatment at a network hospital.