A Health Insurance policy refers to a contract between the insurance company and the policyholder, wherein, the insurer pays for the medical expenses incurred by the insured. In this case, the expenses for medical expenses or cashless treatment for injuries or illnesses covered under the policy are borne by the insurer. It allows you to get tax deductions applicable on the premiums paid towards health insurance under Section 80D of the Income Tax Act 1961.
To get a health insurance policy, an individual has to pay the premium amount at regular intervals either monthly, half-yearly, quarterly or yearly as selected by him/her during the purchase of the policy. From the day you buy the policy, if you have any medical expenses to bear, the insurer will be liable to pay them as per the terms and conditions. There are few insurers in the market which have a waiting period when no claims are entertained.
Health insurance may also be offered by employer to employees of an organization as a service benefit. The extent of coverage under such a policy may be limited, thus, it is advisable to buy a separate health insurance policy for extended coverag
Classification of Health Insurance Plans in India
Reimbursement or Indemnity-based Health Insurance
It is commonly known as mediclaim plans that have an annual limit and is renewed every year. In this case, the insurer will reimburse any medical expenses incurred due to hospitalization, diagnosis, and pre- and post-hospitalization treatments. This type of plan is available as:
- Individual Health Insurance Plan: In this plan, only one person is covered for the chosen sum insured. To enroll family members under this plan,a different sum insured has to be chosen for each member.
- Family Floater Insurance Plan: This type of plan is designed for families, wherein,a fixed sum insured is available for all insured members for one or more claims during the policy tenure. The insured members could include spouse, dependent children and parents.
- Fixed Benefit Hospitalization Plan:In this plan, one gets fixed coverage and benefit payouts if the insured member is diagnosed with a specified illness or hospitalized. It offers partial coverage to hospitalization costs and provides a substitute income.
Some of the additional health insurance add-ons or riders that can be attached to your base policy are:
- Critical Illness Plan:This is the plan in which the insurer will pay a fixed benefit payout if the insured person is diagnosed with any of the critical illnesses specified under the policy and also the lump sum benefit can cover hospitalization cost and act as an income supplement.
- Surgical Benefit and Hospital Cash Plan:This plan covers defined hospitalization and surgery costs. To avail the benefits of this plan, you need to submit medical bills to the insure
Health insurance plans in India can be purchased as per an individual’s requirement. It depends on the insured whether they want a health insurance plan that covers patient expenses, critical illnesses, maternity expenses, accident-related expenses, or is a combination of all. Health insurance policies are nothing but a sort of blessings in disguise as they are mainly used as financial backups during medical emergencies. They cover the expenses incurred on hospitalization or the medical bills.
Individual Health Insurance Plan
Individual health plans are designed to protect an individual from emergency medical expenses. It serves as an agreement between an insurance company and an individual under which the insurer promises to cover the medical cost incurred by the insured person in return for a premium amount paid by the customer. These individual health insurance plan also covers hospitalization expenses, pre and post-hospitalization expenses, medical examinations charges, laboratory charges, maternity care expenses, and consultation fees.
Individual health insurance plan does not cover the following
- Pre-existing diseases
- Non-allopathic treatments
- Substance abuse treatments required due to excessive consumption of alcohol and drugs
- Cosmetic surgeries
Family Floater Health Insurance Policy
A family floater insurance policy is a health plan that offers insurance coverage to the entire family. These plans are ideal for big families as they can cover the medical expenses of the entire family. It will help you save a lot of money and time by covering the policyholder, spouse and dependent children.
However, there are few insurers in the market who allow policyholders to include their dependent siblings, parents and parents-in-law as well. Even if you have good knowledge of family floater plans, it is necessary to do good research before buying any medical insurance plan. Family floater insurance plans cover up to 15 relatives in most of the plans.
Senior Citizen Health Insurance Plan
These plans are designed for individuals who are more than 60 years of age. It can be a boon for you post-retirement where you might not have regular income and might encounter medical emergencies.
Critical illness Plan
These plans are important as they cover a number of fatal illnesses that are increasing day by day. Critical illness refers to a serious health condition that affects the lifestyle of a person and is often fatal. Apart from the bodily pain and emotional trauma that a person goes through, it also gives rise to serious financial crisis. Health insurance providers in India offer comprehensive critical illness plans at affordable prices in India to help people with the critical illness.
An indemnity health insurance policy may not be sufficient to cover a critical illness treatment which can lead to disability and loss of income. You can attach a critical illness rider to your base policy to give you an enhanced financial protection. Choose the critical illness rider with:
- Low waiting period
- High number of illnesses covered
- The maximum age to renew Critical illness plan is 60 to 65 years
- High number of illnesses covered
- The amount of sum insured in case of critical illness is 4 to 5 times the annual income
- Affordable premium
The policy tenure can be anywhere between 10 and 15 years with annual renewability option in case of critical illness plans.
Maternity Health Insurance Plan
This insurance plan helps you to be financially prepared to welcome a baby home. During maternity, many consultations, follow-ups, and medical tests are required and to cope with all this maternity expenses it is important to buy maternity health insurance. You can attach a maternity insurance rider to your base health insurance policy to provide insurance cover for pregnancy and childbirth expenses. This insurance benefits can help reduce cost of hospitalization, delivery, tests and medication.
Group/Employee Health Insurance Scheme
This plan provides insurance cover to a group of people like employees, members of associations, etc. Employers provide their employees with group health insurance as an incentive to boost morale and retain personnel. The employees can opt for additional coverage for their family members with additional premium payment. This plan allows employers and employees to get tax deductions on premiums paid towards group health insurance as per the Income Tax Act, 1961. The health insurance for employee covers self, spouse, children and parents. There are insurance companies that provide cover prevailing conditions and maternity expenses.
Preventive Healthcare Plans
This plan includes testing, detection, and minimization of disease-causing factors in an individual at an early stage. Consider an example in which diagnosis of cancer in later stages or a heart condition is ineffectual. One should go for a regular health check-up that can keep you aware of your health condition.
Personal Accident Insurance
Accidents, whether minor or critical, cannot be predicted. Such incidents take your time, money, and attention irrespective of the intensity of the accident. This health insurance helps you cover the expenses in case of an accident. It not only covers your medical expenses caused due to an accident, but also gives your family or loved ones a sum assured amount in case of the sudden demise of the insured person. This serves as a financial security for your family in case of unforeseen circumstances. You can attach a personal accident cover to your base insurance policy.