A health insurance offers coverage for all health and related medical expenses incurred due to treatment of some disease or hospitalisation. It is a type of contract between the insurance company and policyholder in which an insurer promises to pay some ratio of the medical expenses to the insured. It works on the concept of providing either reimbursement for all the costs or a cashless treatment for all the harm caused due to the sicknesses covered in the contract. However, while obtaining this coverage, it is crucial to ensure the borrower uses the services of one of the network hospitals.
Why Should You Buy Health Insurance?
You might have set your short- and long-term financial goals for which you must have made investments and savings accordingly. However, medical emergencies can come up any time and you should be prepared to deal with those circumstances. The rising medical costs has the capability to make a hole in your pocket. However, one can get over such situations by purchasing a health insurance. Purchasing an insurance cover can provide the financial stability in times like these. The risk cover can help reduce the economic and medical worries.
Categories of Health Insurance
Health insurance is available in various forms. However, all the health insurance policies can be basically categorized under two types – indemnity plan and fixed benefit plan. Let us understand these two types in detail.
Indemnity Plan: This plan covers hospitalization expenses up to the limit decided during the purchase of the policy. An insured can opt for multiple claims in a year reaching the maximum sum insured limit. It also has the benefit of availing cashless treatment at various network hospitals.
Fixed Benefit Plan: This plan does not offer hospitalization benefit. It pays a fixed amount for certain listed diseases and conditions, such as certain critical illness and specified diseases. Under this plan, one also gets coverage on the diagnosis of certain diseases.
Types of Health Insurance
There are other forms of health insurance that fall under the above mentioned broader categories. One should be totally aware of one’s needs before purchasing these plans. One should also know all the terms and conditions of each type in order to get the maximum out of the plans. Let us look at these plans in detail.
1) Individual Health Insurance Plans: This type of insurance cover is specifically for an individual. The insurance provider covers only the medical expenses incurred by an individual. The treatment expenses covered in these plans usually include all the costs incurred through hospitalization, pre and post-admission, charges for various medical tests and laboratory charges, and consultation charges. Since this risk cover is only for an individual, the premiums are cheaper than the other plans. However, they are influenced by other significant factors like an individual’s age, his/her prolonged illnesses, among others. Read more
These policies don’t provide cover for any existing illnesses. However, after a waiting period by some insurance companies, these diseases might get included in the cover. The insurance policy doesn’t cover Ayurvedic, Homeopathic treatments or any other non-allopathic treatments. However, lately, some companies have started offering risk cover for AYUSH – which covers homeopathy and other herbal treatments too.
2) Family Floater Insurance Plans: These types of insurance covers the entire family. Instead of buying different individual plans, a borrower can get a family floater that would cover the medical and treatment expenses of all the family These plans include the policyholder, his/her spouse, and children. Minor children up to 2 years can also be covered under this plan. Each if the family member either is eligible for an equal sum, or all of them receive a combined amount. If you receive a combined sum, then if one of the members require a more significant amount for an emergency, he/she can take that amount from the combined sum. This varies from company to company.
However, there are some plans which include siblings and in-laws. Family floaters can provide health cover up to 15 relationships in one single plan. The policy can be renewed until the policyholder reaches the age of 60 to 65 years. Some of the companies also provide a life-long renewability option. Read more
3) Senior Citizen Health Insurance: These insurance plans cover individuals who have reached the retirement age of 60 years or more. Illness and other health-related problems after the age of 60 years are common. Retirement might also deprive people of any regular income. In such a situation, bearing all the medical expenses might be a big burden. Thus, senior citizen health insurance plans can help in meeting all medical expenses in the times of emergencies.
It is mandatory by the IRDA that the policyholder must be at least 60 to 65 years while he/she applies for the policy. The age is a significant factor in deciding the premium amount. Policyholders can also avail discounts on these premiums. Some of the insurance companies also require the policyholders to go through a medical examination before sanctioning them an assured sum. The sub-limit of the policy has to be kept in mind while choosing a senior citizen health cover. The waiting period for these policies can range from one to four years in case of some particular illnesses. The cover for existing ailments can be offered after a waiting period up to three years. Read more
4) Critical Illness: Critical illnesses are ailments not included in health insurance plans. These are some specific sicknesses which can lead to permanent disability or death. It could be beneficial to purchase this policy if someone has a history of a particular critical illness. The diseases covered in this plan include cancer, organ transplant, and failure, multiple sclerosis, paralysis, blindness, strokes and heart attacks, kidney failure, coma, critical heart surgeries, among others. This policy can be bough either separately or as an add-on with any other main plan.
Under such a plan, if the policyholder is diagnosed with any of the critical illnesses included in the list within the tenure, a claim can be paid along with other benefits. Some companies also provide a daily allowance benefit because the policyholder is unable to work and earn income due the illness. Such plans usually have a low waiting period because these are dangerous diseases. Moreover, the premiums in these plans are more affordable than the other plans. These can also be renewed up to the age of 65 years, and the claim amount is almost 4 to 5 times more than the annual income.
Purchasing this policy is an excellent option because it would leave you with useful money which you could use to fund your other goals. The policyholder can even get free of cost health checkups. However, if the disease is diagnosed within 90 days of the commencement of the policy, the plan would not cover their expenses. Also, if the policyholder or the person who is insured, meet with death within the 30 days from the date on which he/she was diagnosed or went through surgery – the policy will become invalid.
5) Maternity Health: Maternity Insurance plans are specifically for women planning to have a child or are bearing one. It covers all the expenses before and after the pregnancy, cost towards the child, mother’s care expenses, and any complications that might arise due to pregnancy. Such a plan can be added to the main plan of Individual, or Family Floater policy. Moreover, it can also be attached with the Group Insurance plans provided by the employers which have a sub-limit up to Rs. 50000. All the expenses related to tests, medicines, labor, and admission can be reduced by taking this plans.
Maternity plans provide cover for all the expenses of pre-admission in the hospitals up to a maximum of 30 days before being hospitalized. Costs up to Rs. 5000 after the hospitalization are also covered for a maximum of 60 days from the date when discharged. Any emergencies transportation due to pregnancy-related discomforts, expenses for delivery, nursing and consultation are also covered in this plan. It also includes the congenital or a critical disease diagnosed in the newborn – which is not wrapped in critical illness cover. Hence, this is a great rider which can be availed with a critical illness plan, if needed.
The waiting period is up to a maximum of four years, as only after that all the benefits can be availed. Hence it is advisable to purchase this plan well before conceiving. The exclusions in this plan include charges for regular checkups, diagnostic exams, and consulting fees, any medicines like tonics and vitamins, during the pregnancy.
6) Group Medical/Employee Insurance: The employers provide group Medical Insurance to their employees. The groups under such a policy include members of any associations, companies, etc. Employers buy these plans for their employees to offer incentives, boost morale and attract more personnel. Moreover, this can be purchased by the employees by extending it for their family members as well, covering spouses, children, grandparents, etc. Like other plans, the premiums paid under this plan are tax exempted. Some policies include cover for existing diseases and maternity expenditures. Unlike other plans, the employees don’t have to produce any documents and medical examinations, as they are already eligible. Also, the premiums are lesser in this policy because the employer pays a part of the sum assured along with the employees. The policyholders can ask for claims within the 30 days of the being a part of the policy.
7) Preventive Insurance: Preventive Health plan covers expenses for regular health checkups required to prevent any dangerous illness like cancer. For this, annual medical examinations can be needed to analyze the possible symptoms. Such plans can provide coverage for any checkups done in a network hospital of the insurer. Expenses also cover all the preventive measures taken for the policyholder, spouses, children and parents. Children up to the age of 13 years are covered under this policy.
These plans are also divided as per the age of the insured and specific disease-related prevention. Specific disease plan includes only a particular disease mentioned in the plan. Unlike other plans, Preventive Health plan includes tests related to HIV/AIDS, apart fr om genetic exams, PAP smear cancer, and cholesterol.
8) Personal Accident: This plan offers coverage for injures due to an accident. Such a policy would be a great add-on with the motor vehicle insurance to cover damage done to both the vehicle and health. If there is an untimely demise of the policyholder, the plan also offers a sum assured to take care of the expenses of his/her family members. Such a plan doesn’t require producing any health documents and can be availed for both individuals and Also, many policies cover all the legal and funeral expenditures apart from covering any harm caused due to the terrorist attacks.
However, it doesn’t cover any harm caused by the person to himself/herself or attempting to commit suicide. Moreover, it also doesn’t cover pregnancy-related expenses, previous disabilities, drug and alcohol abuse. Personal Accident cover can be further classified into 2 types:
Individual Accident: The plan covers an individual’s disabilities, dismembering of body parts, or death due to an accident.
Group Accident: It is provided by employers to cover the expenses of the employee’s families on his/her unfortunate demise.
9) Mental Illnesses: Mental illnesses are now a part of health insurance covers. However, it doesn’t include mental retardation and instead comprises any mental conditions arising due to prolonged alcohol and drug consumption. All the mental diseases which have been approved by national and international medical standards are included in this plan. Diseases like Schizophrenia and bipolar disorder which are considered mental conditions as per the World Health Organization (WHO) are covered under this plan.
It also covers hospitalization expenses starting from diagnosis, analysis, treatment, and rehabilitation for the mental illness or suspected mental illness. However, hospitalization for at least 24 hours is compulsory for availing this plan. Existing plans are required to include the new mental illness regulation.
Unit Linked Health Plans (ULHP): ULHP is the latest inclusion by the insurance companies which is a combination of insurance and investment. Insurers provide cover for health as well as a corpus to meet the medical expenses not covered under other insurance plans.