Health Insurance is a type of Insurance that pays for an insured member’s medical expenses due to accident, illness, or injury. In a health Insurance policy, your insurer bears the cost incurred towards hospitalisation, doctor consultation, diagnostic tests, medication, etc.
Health Insurance and medical Insurance terms are generally used interchangeably and are further classified into two broad categories-
Typically, there are two broad categories of health Insurance:
A health Insurance plan works simply—your insurer provides financial support during medical emergencies in return for a regular premium payment. It’s a simple yet powerful arrangement, ensuring that when health hiccups occur, you’re not left juggling savings and bills. Let us understand the entire workings of health Insurance with an example:
Suvidha purchased health Insurance with a coverage of ₹10 Lakh for her family. A few months later, her mother got sick and had to see a doctor. Unfortunately, she had to get hospitalised as her condition worsened.
Knowing that her mother was covered under her health Insurance policy, Suvidha searched for a nearby network hospital and admitted her for further treatment. She then informed her insurer about the emergency hospitalisation and completed the formalities.
Upon discharge, the hospital directly settled the bills with the Insurance company, while she paid only for the non-payable items.
Further, she filed a reimbursement claim for the pre-and post-hospitalisation expenses. Suvidha filled out the reimbursement form and attested it with all the bills and reports related to the hospitalisation. Her insurer verified the documents and paid the claim amount to her bank account.
Medical Insurance ensures you access the best healthcare regardless of age and financial budget. While a health Insurance plan is prudent for everyone, we have highlighted who should opt for one.
Despite being active and healthy, young people are not immune to sudden medical emergencies. Here, a comprehensive medical Insurance policy can help avoid hefty expenses from unforeseen medical costs. Further, some health Insurance plans also offer free annual health check-ups, which can help detect and prevent potential health issues.
A family medical Insurance policy covers parents and children under one plan. These plans provide adequate coverage for emergency treatments and routine check-ups. Family health Insurance can be crucial for managing chronic conditions and recurring health issues in the family. It also acts as a protective shield from rising medical care costs.
Health Insurance is a crucial tool for middle-aged individuals to address the high likelihood of conditions like heart disease, hypertension, and diabetes. Specialised health Insurance plan providers cover related medical attention and treatments, ensuring that unexpected emergencies are covered without financial strain.
Retirees or seniors can rely on health Insurance to manage medical costs without impacting savings. These plans usually cover essential healthcare needs, including treatment and medicine.
Understanding the terms and conditions of your health Insurance is crucial for policyholders to avoid last-minute hassles. Read out these commonly used health Insurance terms to make reading the policy documents easier:
Some Insurance policies have an inbuilt copayment clause. Copayment, or ‘Copay’, is a specific amount or percentage an insured individual must pay from his/her pocket every time a claim is raised. Simply put, it is a cost-sharing concept between the policyholder and the Insurance company.
A deductible is the amount you pay from your pocket when a claim is raised. Here is an example of how deductibles in health Insurance work: If your health Insurance claim amount is Rs. 2,00,000 and your policy’s deductible amount is ₹50,000, then you pay ₹50,000. At the same time, the health Insurance company pays the balance of ₹1,50,000.
So, it is essential to check your medical Insurance policy documents for a deductible clause and choose one without one unless you are okay with bearing a part of the treatment cost.
A network hospital is where your health Insurance provider collaborates to offer the policyholder the advantage of cashless hospitalisation. When you are admitted to a network hospital, your insurer settles your medical bills with the hospital, saving you from the hassle of paperwork and running around arranging funds.
When you buy a health Insurance policy, you must choose a coverage amount up to which your health Insurance company will cover the medical expenses. The higher the sum insured, the higher the premium and vice versa.
Every Insurance provider includes a set of situations and conditions in which they are not liable to provide financial coverage. These limitations will be mentioned in your health Insurance policy papers as exclusions.
If someone suffers from an illness before purchasing a health plan, it is called a pre-existing disease. Some common examples are diabetes, asthma, hypertension, or high BMI. People with a pre-existing illness can also be eligible for health Insurance. However, they generally have to pay a slightly higher premium or serve a pre-decided waiting period to be able to file a claim against the condition.
Claim intimation in health Insurance refers to informing Insurance providers about the upcoming claim. This usually involves notifying the Insurance provider about hospitalisation medical treatment before submitting detailed claim information. It enables insurers to be aware beforehand to streamline the subsequent claims processing. It is important to know that in some cases if the insured person does not submit an Insurance claim intimation, the claim might be rejected.
Claim settlement is when the insurer pays the costs towards a loss incurred by the policyholder. In the case of health Insurance, there are two major types of claim settlement- Cashless and Reimbursement.
In cashless claim settlement, the insurer pays the hospital directly according to the policy T&C. Whereas, in a reimbursement claim settlement, the bill is firstly paid by the policyholder and then is disbursed to his/ her account upon claim acceptance.
A cashless hospitalisation claim is a facility offered by Insurance providers to help policyholders access medical services without worrying about the availability of upfront finances. To use this facility best, one has to receive treatment at network hospitals affiliated with the Insurance provider.
The term reimbursement claim refers to the repayment of the claim. In this type of claim settlement, you pay the medical/hospitalisation bills for the medical treatment you avail of. Once you submit the bills to your health Insurance provider, you can file a claim and get the covered amount from the insurer.
No claim bonus is an additional benefit offered under a health Insurance plan to get a complimentary bonus for every claim-free year. It helps boost the coverage of your health Insurance plan.
A sub-limit is a predetermined capping applied by the insurer on certain medical expenses under your health Insurance. It works as a limit on how much claim amount the insurer will pay for a given healthcare expense. Sub-limits are usually calculated in percentage and apply to both cashless and reimbursement claims.
Room Rent Proportionate Charge limits the amount an insurer will pay for room rent per day during hospitalisation. If you exceed the room rent limit, you must pay the difference out of your pocket.
Taking timely precautions is the need of the hour.Under preventive care, mediclaim policies cover COVID treatment, annual health check-ups, general OPD visits, diagnosis, medical tests, consultations, etc., done to analyse any severe health patterns beforehand. By paying the premium, you can avail of preventive care benefits under your medical Insurance plan.
As of April 1, 2020, the Insurance Regulatory and Development Authority of India (IRDAI) has directed all health Insurance companies to include coverage for AYUSH treatments in every health Insurance plan. While some health Insurance plans previously covered alternative treatments, they often had specific limits on the coverage.
Alternative medicines are better known as AYUSH treatments, which stand for Ayurveda, Yoga, Unani, Siddha, and Homeopathy. These treatments are deemed safe and effective not just in India but worldwide. Studies suggest that the AYUSH treatment sector in India is projected to grow at a
According to a report by Business Standard , wholesale prices in India rose to 0.53% in March 2024. This inflation has also been significant in the medical sector!
The constant year-on-year increase in medicine prices, diagnostic tests, and hospital charges across India have made having affordable health Insurance the need of the hour! Mentioned below are the benefits of health Insurance that make it an essential healthcare security cover:
The premium you pay for your health Insurance can be utilised to avail of tax benefits under Section 80D of the Income Tax Act, 1961. For example, individuals below 60 (along with senior citizen parents) can avail of tax deductions of up to ₹75,000.
| Policyholders | Deductions for premium paid for self and family | Deductions for premium paid for parent | Preventive Health Check-Ups | Tax benefi |
|---|---|---|---|---|
|
Self and family below 60 years |
₹25,000 |
– |
₹5,000 |
₹25,000 |
|
Self, family, and parents below 60 year |
₹25,000 |
₹25,000 |
₹5,000 |
₹5,000 |
|
Self, family, and parents below 60 years |
₹25,000 |
₹50,000 |
₹5,000 |
₹75,000 |
A health Insurance policy is crucial for safeguarding the well-being of your loved ones. In today’s disease-prone world, the right coverage can offer financial protection and access to quality healthcare services. The best health Insurance policy shall ensure that your family is protected from the exorbitant costs associated with medical treatments.
A health Insurance policy acts as a financial safety net for illness or injury by covering everything from hospitalisation expenses to medication costs. This safety net not only eases the burden on your finances but also guarantees that your loved ones receive medical attention without compromises. It empowers you and your family to seek medical assistance promptly without worrying about expenses hindering timely healthcare. Annual health check-ups are also often included in health Insurance policies, which can contribute to your family’s overall well-being.
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