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How Health Insurance Works

Understand everything about health insurance, how health insurance works and ensure a stress-free medical experience.

  • 18 Jan 2023
  • 2 min read

Health insurance is essential and the most widely purchased insurance product. The rising cost of medical care combined with a sedentary lifestyle makes it a must-have. Health insurance covers different medical conditions and allows you to lead a stress-free life.

 Health insurance is usually available as an individual plan and a family floater policy. The scope of coverage for both is identical except for the use of the sum insured. Let us proceed and learn

How does health insurance work in India?

Health insurance is specifically designed to provide financial protection against various illnesses. In exchange, the insurer requires you to pay a premium. The cost of this product is determined by several factors, the most important of which is your age and medical history.

 As a Policy Owner, you are entitled to benefits up to the sum insured. In general, medical insurance policies cover the following expenses:


 Pre and Post-hospitalization expenses

Daycare procedures

AYUSH treatment recognized by government institutions

In-patient expenses

ICU charges

Indoor expenses

However, keep in mind that the scope of coverage may differ between insurers. Every policy has a waiting period, and benefits are available once that period is over. As a result, thoroughly reviewing the policy wording is critical.

 Deductibles are another important factor to consider. It is the amount you must pay out of pocket at the time of settlement. There are two types of deductibles - mandatory and voluntary. If you increase the latter, your premium will be reduced while your liability will increase.

How does health insurance renewal work?

 Health insurance benefits are available for a fixed time frame. After this period expires, you will have to renew your policy by paying the required premium. During renewal, you can add riders to expand the scope of coverage. If you don't make any medical claims, your insurance coverage will increase up to a certain limit.

 Nowadays, insurers allow both online and offline renewal.

Also read:

How does a health insurance claim work?

Most health insurers provide both cashless and reimbursement claim benefits. They have agreements with several advanced hospitals across the country where you can receive cashless treatment without having to pay anything. Each network hospital employs a third-party administrator (TPA) to ensure the smooth processing of your cashless treatment application.

 If you receive treatment in a non-network hospital, you must file a reimbursement claim. The insurer will ask you to furnish the prescription fees, original hospital invoice, and medical screening report. They will then verify the documents, and if everything is fine, the claim will be settled within a few days.


Understanding health insurance products is not very difficult. You only need to download the policy wording from your preferred insurer's website to get the insurance's fine print. It discusses the exclusions and inclusions, waiting period, claim process, renewal process, and more. If you don't understand insurance terms, you can call the customer service number on the insurance company's website for help.

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