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All you should know about Health Insurance to prevent a hole in your pocket

What is Health Insurance?

Health insurance is a type of insurance where an organization (health insurance company) takes the risk of policyholder’s illness, sickness, accident, or any other mentioned medical expenses and secures them and their families financially.

It’s an agreement between policyholder and health insurance company wherein companies compensate all the mentioned illness, accident or any other reasons in the policy due to which the policyholder has to get hospitalized and in return of which policyholder pays a yearly amount to the health insurance company in the form of premium.

In such policies, companies have tie-ups with a large network of hospitals where the policyholder can get admit and have their treatment by just showing the card provided by health insurance companies. 

Or in other cases, if the company doesn’t have tie-ups with the hospitals then they reimburse the expenses caused in the treatment. The Government of India also promotes Health Insurance for all by giving Tax Concessions under it.

Importance of Health Insurance

Importance of a health insurance policy can be felt when a member of a family gets sick or hospitalised. And, the importance is more when the person got admitted is the earning person in the family.

Quality healthcare treatment in hospitals is no more affordable for a middle-class family or even a high class when the disease is severe. Spending less than a week in a decent hospital can result in a bill which is enough to dig a hole in your pocket.

All such tensions can be avoided by just paying a nominal yearly premium against a health insurance policy. One can reach out to a network hospital and can get their treatment done peacefully.

A good health insurance policy could cover all medical expenses including doctor’s consultation fees, pre-hospitalization expenses, medicines, and tests costs, ambulance expenses, hospitalization expenses, and even post-hospitalization expenses.
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Health Insurance

Benefits of Health Insurance

  • Cashless Treatment

Your all medical treatment bills are paid directly by the insurance company and you don’t have to worry about a single penny (up to the amount of Sum Assured taken by the policyholder), you can just go to any of the network hospitals provided by the health insurance company and can get your treatment done by just showing your policy card provided by the company against the policy taken.

  • Pre & Post Hospitalisation Expenses

All the expenses incurred before hospitalization of the policyholder is called Pre-hospitalisation Expenses and expenses after getting discharged is termed as Post-hospitalisation benefit.

Pre & Post Hospitalisation Expenses are being covered by the health insurance companies if the illness is under the stated terms and conditions of the policy taken.
So, one should Consult a Health Insurance Expert who can clear all terms and conditions mentioned in the policy.

  • Tax Benefits

To promote the health security of its citizens, the government of India provides tax benefits against premiums paid under Section 80D of the Income Tax Act, 1961.

  • Daily Hospital Cash

There are miscellaneous expenses during hospitalization like food, travel etc. Hence, this benefit is really important.

Generally, these benefits are up to Rs. 2000/day but it may vary depending on the type of illness like an accident, ICU Covers, etc.

  • Organ Transplant Expenses

Insurance companies do cover organ transplantation surgery expenses if the policy is taken under consideration.

  • No Claim Bonus

When the policyholder doesn’t have claims against their policy for the whole year then they are entitled to a no-claim bonus. With this benefit, the policyholder is entitled to a discount on the payable premium for next year or an increase in Sum Assured from the current one.

Companies also provide free health checkups for such policyholders in their network hospitals.

One should always give a check to No Claim Benefits at the time of premium payment.

  • Free Health Check-ups

To motivate policyholders for healthy living, companies also provide occasional free health checkups for their policyholders, this is sometimes also included in the policy itself. 

Depending on the policy taken and companies, you are also available for a master checkup.

  • Lifelong Renewability

As the age increases the illness risk do increases, hence health insurance premium also rises drastically with age. Lifelong Renewalibilty ensures for policyholders to renew their policy at any age without any restrictions.

Lifelong Renewability waves off the financial burden for senior citizens in the events when they face extreme medical conditions.

  • Restoration Benefit

Once the policyholder utilizes the whole amount of sum assured, restoration of the sum assured is available in policies without any additional costs with which the policyholder can again avail the sum assured amount within the same period of the first claim.

Policies with restoration benefits are comparatively costlier than the normal policies.
One should check the check with their health insurance advisors before taking a health restoration benefit under the policy.

Top Health Insurance Plans in India

Plan Name

Min. Entry Age

Max. Sum Assured

Network Hospitals

HDFC Ergo General Optima Restore

Adult - 5 Years

Child - 91 Days

50 Lakhs

10,000+

Star Family Health Optima

Adult - 18 Years

Child - 16 Days

25 Lakhs

9,900+

Care (Formerly Religare Care Health Insurance)

Adult - 5 Years

Child - 91 Days

75 Lakhs

11,000+

Aditya Birla Activ Assure Diamond

Adult - 5 Years

Child - 91 Days

2 Crore

7,000+

Types of Health insurance Policy

  • Critical Illness Plan

There are several chronic diseases that are not covered in normal Health Insurance Policy, hence companies made specific insurance companies to cover such diseases named as cancer, heart attack, kidney failure, etc.

  • Senior Citizen Health Plan

This type of policy is for senior citizens i.e. people aging 60 years or above.  It is designed to meet all contingencies in the hour of need. It includes critical illness, cashless hospitalization, pre-existing disease cover, and a higher sum assured.

  • Maternity Health Insurance

These are specially designed insurance covers that are made for pregnant women to cover all the expenses in different stages of pregnancy like pre-hospitalization of 30 days and post-hospitalization of 60 days, delivery expenses, pre & post natal expenses, vaccination expenses, and other as per the policy document.

  • Individual Health Insurance

It covers the medical expenses of a single individual where there’s always an option to go for a bigger sum assured.

  • Family Floater Health Insurance

Family floater health insurance plans cover all the family members wherein all the family members can utilize the whole amount of sum assured or part of it individually or together as per the needs. It is comparatively cheaper in comparison to individual health insurance policies.

  • Corona Health Insurance

A recent health insurance type emerged after the global pandemic due to Covid-19. It provides a cover for all your expenses to recover from the newly emerged disease once the waiting period is over. Hence, allows you to relax with peace for your expenses.

  • Unit Linked Health Plan

These are such plans which is a combination of two concepts where one part of the premium is used to cover health insurance expenses and the other is used as an investment to build a corpus which will be utilized to cover other diseases not included in the plan. These are a combination of insurance and investment.

How to Select the Right Insurance Policy

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Tax Benefits on Health Insurance

The premium charged for medical insurance provides tax benefits under Section 80D of the Income Tax Act. Higher deductions for medical benefits charged to senior citizens are given by the Finance Act, 2018.

If no one above 60 Years

The deduction is up to Rs 25,000 if no one in the family is over 60. The deduction for medical benefits provided to parents under 60 is up to Rs 25,000. The total deduction one can demand is therefore up to Rs 50,000.

Things to keep in mind while buying a Health Insurance Policy

The following are the aspects that one should keep in mind while buying a health insurance policy from any company:

  • Cashless Benefit

One should always opt for a cashless policy during hospitalization. By doing this policyholders stay at peace as every expense is paid directly by the health insurance company only.

  • Pre & Post Hospitalisation Period

All companies differ with their pre & post hospitalization periods in their policies. One should look into it instead of carrying this confusion to the time of claim.

  • Room Rent Capping

Again, all insurance companies differ with room rent cappings i.e. what amount of room a policyholder can opt for while getting hospitalized, some companies don’t keep such cappings as well.

  • Sum Assured

Everyone should be aware of their policy sum assured. It doesn’t create any confusion during the time of claim. Also, one should look if the policy has the option to opt for a higher sum assured in between the policy period and if it is there, then in what conditions.

  • Reliability of the Company

To have a surety about the company’s claims of the policy terms and it’s market reputation, one should visit the official website and should check the benefits of the plan on its official policy document.

  • Nearby Network Hospitals

They are the hospitals in direct contact with the health insurance companies. One should always check about the network hospitals. nearby to their residence location, so that they don’t panic to search for a network hospital near them.

  • Ambulance Expenses

All insurance companies differ with their claims on ambulance expenses covered. With a difference in the plan, the amount also differs.

  • Restore Benefit

This is among the most important benefits for which one should check their health insurance policy. In this benefit when the policyholder(s) exhaust their full amount of sum assured during their hospitalization, the company automatically restores the amount equating to the sum assured for the next hospitalization (it’s terms differ as per the policies and companies). 

  • No Claim Bonus

When the policyholder doesn’t make any claim during a premium year, they are entitled to no claim bonus benefit under which companies increase their sum assured covers. One should always check for this before paying the next year’s premium.

  • Other Additional Benefits

There’re many additional benefits like riders, donor expenses, daily cash, e-opinion assistance, air ambulance, domiciliary treatment, daycare expenses, etc. for which one can look for.

Health Insurance Claim

The most important part of the health insurance policy is claim settlement. All companies have majorly two ways to deal with any claims by policyholders, either they offer a direct filing process or Third Party Administrators (TPA).

It is always advised to take assistance from your financial consultant or insurance advisor for the right and hassle-free processing of your claims. This is the part where online third-party insurance sellers lack behind, as they sell policies online but they don’t assist personally and then their policyholders suffer.

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