The Layman Guide to Indian Health Insurance
What is health insurance?
The term health insurance plays an important role in each individual’s life, these days. It is a kind of support against various health emergencies an individual may face in his lifetime (as mentioned in the policy). This is also a boon for those who cannot afford to pay huge amount all at once.
The insured (buyer) pays a small amount referred to as premium to the insurer (seller/insurance company). The insurer in turn, promises to take care of the medical expenses of the insured and his dependents. The amount of premium will depend on the type of cover and number of members covered.
Personal/Individual Health Insurance
This is an insurance policy for health or mediclaim that offers protection to a single individual covered. The policy is a boon for the unmarried or those who want to take care of their health and related challenges individually.
Family Floater Policies
In India, many insurance companies offer plans to cover up to 4/5 members of the family under the same plan. They charge a slightly higher premium than the personal/individual health insurance policy. The plan ensures flexibility of choosing a sum of cover (let’s say for instance 3 or 5 lakhs) for the entire family. In the event where one member in the family is ill or hospitalized and uses 3 lakhs INR for his treatment, then the rest 2 lakhs can be availed by others. The family floater serves the of family health cover. It is wise to take health insurance at younger age, the premium is less.
Types of Health Insurance
1. Regular health insurance
2. Critical illness insurance
Regular Health Insurance
The insurance will take care of petty health problems that are not critical and of short duration. In short, the insurance serves for affordable insurance plans. The regular health insurance will cover the expenses only on hospitalization of the insured within specific duration. The billed amount is paid through cashless or reimbursement.
Critical Illness Insurance
The term refers to the diseases which are mostly non-curable / critical. The insurance also takes care of diseases/illness that needs big money for treatment. The plan will insure you against diseases such as paralytic stroke, cancer, major organ transplant, kidney failure etc. Basically, these are diseases that need long continued treatment. The insured will get the amount in lump sum.
What to choose?
It is better to consult with a learned insurance agent before choosing a policy. Make sure you tell your requirements before he refers a plan to you.
This is a kind of no cash payment arrangement wherein the insurance company pays directly to the hospital. It is important that you know about the list of network hospitals that offer this service. Prepare a list of some of the hospitals nearby with telephone numbers so that you can be taken to that specific hospital in case of an emergency. This will help you benefit from the cashless claim policy. Most importantly, the hospital you are looking for should have tie up for this facility. All you need to do is sign the bill at the time of discharge of the hospital. The insurance company will pay the amount to the hospital.
What happens to the premium money?
The premium money under health insurance will not be refunded or returned towards the end of the period of insurance. This is only possible in the case of life insurances policies.
So what’s the benefit here?
There are many benefits of buying a health insurance plan.
You will get income tax exemption up to Rs. 15000 every year under section 80 D. The exemption can go up to Rs.20000/- for senior citizens 60 and above.
The insurance policy protects salary earner or bread winner of a family from facing the impact of financial crisis due to a medical emergency. One can lead a peaceful life without worrying about uncertainties because it covers the medical and hospitalization expenses of the insured and dependents.
Health insurance will cover you against various emergencies and assists you in case of a financial emergency. The policy will cover the following basic costs in the event of hospitalization due to any accidents or diseases that doesn’t actually form an integral part of the permanent policy exclusions. The policy covers you for:
Are there any exclusion?
- Hospital room expenses
- Boarding expense
- Nursing expenses
- Fees for surgeon, anesthetist, medical practitioner, consultants, and specialist
- Operation theatre charges
- Surgical appliance charges
- Medical and drugs charges
- Similar expenses
Normal exclusions on a health insurance plan will vary slightly company to company. You need to pay special attention on pre-existing diseases or treatment and expensive treatment cover in a policy when comparing various plans. The common exclusions include the following listed below:
What does ‘Pre-existing diseases’ indicate?
- A disease/injury during first 30 days of commencement of policy
- Change of life
- Cosmetic or aesthetic treatment
- Plastic surgery unless prescribed due to accident or as a part of any illness
- Dental treatment or surgery
- Cost of spectacles contact lenses
- Hearing aids
- General debility
- “Run-down” condition
- Venereal disease
- Hospital/nursing home charges not part of any treatment
- Nuclear perils
- War perils
- Non-allopathic treatment
- Internal congenital illness
- Pregnancy and childbirth related diseases
- Expenses arising from HIV or AIDS
- Use or abuse of liquor/drugs
- Riots treatment
- Terrorism acts
- Nuclear weapon induced treatment
Under a health insurance policy, ‘pre-existing diseases’ are defined as an illness or disease the insured had (whether he was aware of it or not) at time prior to the origination of the policy with the insurance corporation.
The Insurance Term
Usually health insurance is taken for one year. Some insurers may even allow it for two years consecutively. Premium may vary on a yearly basis based on cost of hospitalization in general and the industry trend.
Read More Health Insurance Articles