Everything You Need to Know About Health Insurance
Published On Mar 17, 2019, Updated On Feb 16, 2021
In the current age, every individual is constantly running to make money, but forget one of the most famous sayings, that is, ‘Health is Wealth’. In the process of fulfilling our desires, we are not paying attention to our health and well-being. Furthermore, the kind of lifestyle that people have started to lead these days along with the pollution level has resulted in additional health problems.
This negligence towards our health is never acceptable. Eventually, we find ourselves down with various diseases and with those come tensions of cure and finance.
Thus, to avoid stress, mainly the financial one due to increased expenditure on medical bills and treatments, many people have moved towards buying a health policy for their family and themselves. However, the penetration of health insurance is still not adequate in a country like India, as the recent report released by National Sample Survey Organization (NSSO) highlights the fact that only 20 percent of the Indian population has health insurance, out of which only 18 percent people in urban areas and 14% people residing in rural areas have any form of health insurance coverage.
In an era of uncertainties and instabilities, it is always good to have yourself and your loved ones covered for any medical emergency that might occur in the future. Everyone must have a good health insurance plan that includes everything from A to Z as per your needs & requirements, keeping in account your budget. In this article, we will focus on what health insurance is, why is it so important, its benefits, types, top health insurance companies & policies and how ‘InsuranceDekho’ can help you with the best guidance and service.
What is Health Insurance?
Health insurance is a type of an agreement between the insurance company (insurer) and the policyholder (insured) that fully or partially covers medical and surgical expenses of an individual, based on the insurance plan a person has taken based on his needs, benefits and budget.
To get a health insurance policy, a policyholder has to pay a premium amount (based on age, location, tobacco/smoking use, individual or family plan, and plan category) at regular intervals as chosen by him/her while selecting his most suitable policy. From the inception of the policy, if there are any medical expenses incurred by the insured, then the insurer is liable to pay for those expenses as per the terms and conditions.
Basic Health Plan:
This plan provides the hospitalization expenses, in case of accidents, surgical treatments, critical illnesses or day care procedures. However, the benefits, features, sub-limits and sum assured vary from insurer to insurer.
Top- Up Insurance plans:
The top-up plans add supplemental coverage to your existing health policy after the sum insured limit has exhausted. The main motive is to increase the overall sum assured beyond the existing limit by paying a lower premium.
Types of Health Insurance Policies in India
With the increasing cost of health care in India, buying health insurance has become a necessity for every individual. Today, people have a plethora of choices when it comes to purchasing health insurance, which includes every aspect of a medical emergency, but it depends on you which one you require the most and choose accordingly. Some popular health insurance policies are explained below:
Individual Health Insurance Plan: As the name suggests, this plan provides coverage to a policyholder (only one individual) against illness, along with the advantages such as cashless hospitalization, reimbursement, pre & post hospitalization expenses.
Family Floater Plans- Family health insurance plan covers the entire family under a single umbrella. These plans cover pre and post hospitalization covering an extensive network of hospitals. The sum assured can be availed by even a single member of the family or all the family members. Family floater plans are more expensive than an individual plan.
Senior Citizens Plans- Senior citizen health insurance plans (for aged people- above 60 years) cover health issues related to old age. According to IRDAI guidelines, each insurer must provide coverage for up to 65 years of age.
Critical Illness Plans/Rider- In this plan, a lump sum benefit amount is paid on diagnosis of covered critical illness such as heart attack, kidney failure, paralysis cancer and stroke. Medication is expensive; therefore the premiums, as well as reimbursement, is also high.
Maternity Plans- These plans provide maternity coverage and other costs including both pre and post-natal care, and delivery of baby, that is, both normal and caesarean deliveries. It also takes care of ambulance expenses, and in some cases, the plan also includes vaccination of newly born babies.
Health Insurance for Women- Health insurance plan for women provides cover for women-related problems such as breast cancer, ovarian cancer, vaginal cancer, fallopian tube cancer, cervical cancer, among others.
Personal Accident Cover- These are fixed benefit policies which include hospitalization and bear the medical outlay in case of an accident, which can result in death or disability of a person.
Hospital Daily Cash Benefit Plans- This is a policy that provides a certain amount of money for each day of hospitalization.
Importance of Health Insurance- Why to Buy one?
We all have many goals in life, which can start with buying a house and end nowhere because our wishlist is never-ending. But do you know that in the case of unpreparedness, an unforeseen medical expense has the potential to burn all your savings and make you get into debt? The scenario can not only affect your immediate cash flow, but also negatively affects your financial health in the long run.
As per the reports by World Health Organisation (WHO), around 4% of Indians are still below the poverty line as they pay high medical bills and worse than this is, about 70% of Indians spend their entire income on healthcare expenses. These reports prove why health insurance is our need now because of its immense importance.
In addition to the above-mentioned issue, the other major concern is the cost of medical treatment in India, which is rising day by day. Some of the reasons for the sudden spike in medical treatments in our country are expensive medical equipment, increase in disease/health issues & low availability of good hospitals, rise in salaries & overhead costs, and customer behaviour to find the best treatment available. So, the health insurance plan takes good care of your medical expenses from daycare procedure to serious health problems, depending upon the plan taken by you.
Other important factors that add to the importance of Health Insurance are:
Health protection: The first and foremost benefit is the protection of your health and body. Many insurance companies offer medical cum health check-ups and counselling sessions as well.
Proper use of savings: At first, it can look like you are wasting your precious money as you might not require the amount every year, but in case you fall seriously ill and are hospitalized, then you realize its real importance as the premiums paid by you will no longer seem burdensome but will become your saviour which will allow you to get the treatment done without worrying about the expenses.
Secure your future by saving today: Technological advancement has helped us to get the best medical facilities but has also resulted in the costlier treatments. But if you have good medical insurance, then all such expenses are no longer out of your league as you can get the best treatment from the reputed hospitals irrespective of your financial condition then.
Critical illness plan: The best health insurance policy provides coverage against critical medical sicknesses like cancer, kidney problems, paralysis, heart attack, etc. For this, one has to pay an extra amount in their premiums, but paying extra initially can help you get the financial aid from the start if diagnosed with any of these critical illnesses.
Benefits of Health Insurance
A comprehensive health insurance policy with excellent features keeps various benefits in stock for the policyholder. It only depends on how well you have researched on it or the perfect guide, which company you have chosen out of the lot and your preferable plan. While the most significant benefit of having the health insurance plan is that in case of any medical emergency, you are always financially protected. Additionally, there are many other benefits too. Some of them are:
Cashless facility: This gives the policyholder the benefit in case of hospitalisation, as the insurer settles the bill directly with the hospital, and the person insured does not have to pay any bills. This has helped many people who have health insurance policies as they do not have to arrange for funds during an emergency medical situation.
Tax benefits: Every health insurance policyholder can avail tax benefit for the premiums paid towards the plan. This benefit can be availed under Section 80D of the Income Tax Act, 1961. Invest in a health insurance plan today, if you are filing taxes and are looking for ways to reduce the tax amount you pay.
Family/loyalty discounts: These discounts are given to a policyholder who enrols a family member or another person in the health insurance plan. This is a reward paid by the insured to the policyholder for referring people to them.
No-claim bonus (NCB): It is the discount that is given to the policyholder from the insurer for every year that the former has made no claims. NCB can be given as a discount on the premium payable while renewing the policy or the insurance company may choose to increase your sum assured amount.
24*7 customer care support: Most people find insurance plans to be complicated and therefore to help people understand their health insurance plan in a better way and to answer questions, all health insurance companies provide 24/7 customer service support.
Sum assured restoration: ln the family floater plan, there can be a possibility that a single person’s illness can lead to the complete usage of sum assured. Therefore, to help people make optimum use of their sum assured, insurance companies these days offer sum assured restoration benefit which states that if an insured has a health insurance plan with restoration option, once the sum assured amount is completely used, it will be automatically restored at no additional cost. Plans with restoration benefit are expensive than the regular health insurance policies but are worth buying.
Online presence: Insurance providers these days have a great online presence, and as a customer, you will be able to buy or renew your health insurance plan within a few seconds just at a single click from the comfort of your home.
Free check-ups: To encourage their customers to lead a healthy life, most insurers offer free medical check-up facility once in a while. Depending on the type of policy, a policyholder may be eligible for a master health check-up.
Lifelong renewability: To protect you for a long time, especially during the old age, many health insurance plans these days come with lifelong renewability option which is active after the end of every policy term.
Co-payments/Deductibles: Policyholders have an option to choose to co-pay in a health insurance plan. When a claim is made and if the insured has opted for co-payment, then the pre-agreed percentage of the claim is paid by the insurer and the remaining amount by the insured.
Claim updates and quick settlements: Due to the increase in competition in the insurance world, insurers treat the customers claim professionally, and the update regarding the claim is being sent via email/SMS/phone calls. Also, the claim settlement ratio has gone higher as it is one of the most important parameters that allow any person to select the best insurance company for them.
Portability: One of the many benefits that health insurance plans offer today is portability. The policyholder can switch from one insurance company to another anytime he wishes to without compromising on the waiting period or any other benefits which were available with the previous insurer.
Reasons Why One Should Buy Health Insurance Online
By now you must have realized the importance of getting health insurance, but getting one can be a real war for you as you will search for how you can get the best guidance which will save not only your time but also the money. So, what can be a better option than getting it online? Unlike the traditional method (time-consuming and a lot of paperwork) where one had to contact an agent, decipher complex clauses and difficulty in understanding the true meaning, in the online process, the things have got much easier than before. Listed below are some reasons why purchasing health insurance online is beneficial:
Saves time- Buying a health insurance plan online saves upon not only the effort of meeting an agent but also on time on understanding complex terms & conditions of a policy. You can check everything related to your needs online and get yourself insured just by sitting at your place.
Policy information- System of transparency is followed in online means as all the important information related to your health insurance plan is available on the web. Hence, there is no possibility that any insurer/agent can hide or forget to share any important or basic information with you. In case you need 100% information about insurance, you can easily go through the policy brochure available to learn about the features and benefits of your required policy.
Compare health insurance & save big!- Technological advancement has made our lives so much easier than before. With the help of web insurance aggregators, such as InsuranceDekho, one can easily compare the health insurance plans, select the one which suits his requirements and does not burn a hole in his pocket.
Premium calculator- Tools such as a premium calculator, to calculate health insurance premiums, are readily available online. This makes it extremely convenient for the insured to plan his budget by calculating the amount of premium to be paid. All it requires is choosing a policy from the drop-down box, enter your details such as date of birth, city, email ID, and phone number, then the sum insured, and click on 'Calculate Premium'. The premium amount, including tax, will be displayed to you in a single click.
Low premium cost- A few companies offer a lower premium in case you buy insurance online. As in this process, agents are eliminated and therefore, the company is capable of providing a lower premium rate.
Premium payment: After choosing your suitable policy, you can click on ‘Pay Premium’ on the insurer's website, and you will be directed to a safe & secure payment gateway where you can make the premium payment via debit card, net banking or credit card.
Renewal online: For the policy renewal, you need to visit the insurer's website and enter your policy number along with your date of birth, and you will get your renewal notice with the renewal premium details.
Point to remember: Make sure that the information you are providing to a web aggregator or an insurance company, it is 100% correct as any incorrect information or mismatched information can make the insurer reject your claim.
Things to Consider Before Buying Health Insurance Policy
There are several health insurance agencies that offer a plethora of health insurance policies, each with its unique benefits & features. So what goes into choosing the right insurance plan? The best health insurance plan is a plan that suits your requirement. If you are planning to buy a health insurance policy for you or your family, these are the factors that you should consider:
Know your policy’s coverage level- Before selecting a plan, one must check the coverage level of a health insurance policy what it covers and what it excludes. While the basic coverage remains the same, but still some have limitations, so check whether it covers pre-existing illness, accident-related expenses, daycare processes or any feature you need or not. It is always wise to choose a plan which has features that you may need that gives you and your family sufficient coverage.
Check the sublimit - It is of utmost importance to check the limits for room rent, ambulance charges, and other expenses so that you won’t regret your decision later.
Focus on the sum assured of your choice- Healthcare inflation in India is sky-high and is increasing gradually, that is, around 20% annually. To cover this inflation, it is crucial to check whether you are getting the maximum sum assured or not at the lowest possible rates.
Waiting period- Waiting period is the period wherein you have to wait to get the benefit for a specific ailment. It is always a good idea to check the waiting period beforehand as the waiting period differs as per the plans.
Cashless claim & network of hospitals- It is a direct settlement of medical expenses between the hospitals (listed in the network of hospitals by the company) and the insurance provider. To avail the best benefits of this facility, choose the plan which covers your favourite network of hospitals so that you don’t have to compromise on that.
Exclusions- It is always wise to read the offer document carefully and be aware of all medical conditions which are excluded from your health insurance policy because the exclusion of your required facility can be a significant concern later on. Some of the popular exclusions are- Dental services, Pregnancy, Cosmetic surgeries, Ayurveda, Homeopathy, Joint replacement surgery, Injuries caused under the influence of drug/alcohol or caused by war, terrorism, commotion, protest, or strike.
Look for additional benefits- Not to forget to look for add-on riders attached with your policy to increase the coverage and benefits of the comprehensive health insurance plan.
Keep the premium in mind- The premium you are going to pay for a particular policy should also be kept in mind before purchasing a health insurance plan. The amount you are paying for your health insurance should be justifiable and appropriate that should go with your budget & needs as well. A few factors can lead to higher premium, which includes smoking habits, family health history, lifestyle, etc.
Decide if you want co-payment or Not- Before selecting a health insurance plan, understand if it a co-insurance policy or not as when a claim is made, and if the policyholder has opted for co-payment, then the pre-agreed percentage of the claim is paid by the insured, and the insurer pays the remaining.
Family members covered- While investing, one must always consider the number of family members that shall benefit from the family floater policy as most of the plans cover 4-6 members of the family in India.
Claim settlement procedure- Choose the insurer who can provide easy and hassle-free claim settlement procedures that makes it convenient for the insured.
Renewability: All insurance policies come with a renewal date so that the policyholders can enjoy the maximum benefits. The premium amount for most of the individual health insurance plans can be made either monthly/quarterly/semi-annually/annually. Also, there are one-year renewable health insurance plans as well. Before buying a plan, analyse if you will be able to pay the premiums and renew the policy on time.
Room rent facility- Since hospital room rents may vary, some insurance plans pay only a part of the actual rent. It is the best option to go for higher or no room-rent limit plans.
Addition of a family member- When investing in a health insurance plan, one must also consider the conditions in the policy in case you wish to get the new family member added and insured under the same policy.
Restoration option: Policyholders with a family floater plan are afraid that the total sum assured amount can be exhausted if one person is critically ill. To help people in such a scenario, insurers these days offer sum assured restoration benefit, which means, once the sum assured amount is completely used, it will be automatically restored at no additional cost. Health insurance plans with restoration benefit are expensive than regular health insurance policies.
Portability: While choosing a health insurance plan, check whether you can port the policy later to a different insurer easily or not.
How to Choose the Right Health Insurance Company?
In the modern era, not only the health insurance industry has witnessed a significant rise, but also the buyers have increased manifold. Customers now have a plethora of options, and it can be mind-boggling to choose the best health insurance plan. Thus, it is essential to choose the right medical insurance company. There are certain factors you must take into consideration when choosing an insurer. Listed below are a few tips that might help buyers to choose the right company:
Premium Plans at Smart Prices: The first thing you want to look is a reputed insurance company that can offer you with the best plans at the best price where you can get the same what you want without compromising.
ICR- Incurred Claim Ratio (ICR) is an important parameter as it is the Amount settled as claims divided by Amount collected as premiums. While taking into account the ICR of a company, look for the average ICR of all the companies and go for the one which is closest to this average for a few years.
Insurance Company’s Reputation: Always choose that insurance company that has a good brand image. Word of mouth recommendation and proper research will help you select the right health insurer.
Insurance Company’s Financial Stability: It is essential to do your research on the insurance company to ensure the company can make claim reimbursements on an urgent basis as well. One of the ways to check the insurance company's financial stability is to check the Credit Rating Information Services of India Limited (CRISIL). AAA rating of the company is considered to have the highest financial strength; therefore, choose wisely as per the rating.
Experience Matters: The number of years of experience of the insurance company is in existence can never be ignored especially when there are so many new insurance companies that are set-up these days. The experienced company can help you to give you the best by keeping in mind the industry and market.
One Company, Many Plans: Your insurance needs changes from time to time as an individual medical insurance plan seems to be perfect for now, but you may land up searching for the best family insurance plan in your future. Therefore, choose an insurance company that offers a wide range of insurance policies that caters the needs of all type of customers.
Smooth and Quick Claim Settlement: While choosing an insurance company, make sure that they are known for simple and easy claim settlement process without tedious paperwork or any other lengthy procedures. Also, go for the company that won’t reject your claim and settle for it at the earliest.
Best Customer Service Department: Pay attention to the quality of customer service offered by your insurer as your queries need to be solved even after you took your health insurance plan. Check if services like online chat, email assistance, or phone assistance are available or not.
Customer Feedback and Reviews: Check existing customer ratings and feedbacks of that health insurance company. For this, visit IRDAI website to check the number of complaints and resolutions against the insurance company and also go to the insurance company’s official website to check for transparency about the operations of the insurer.
Top Health Insurance Companies in India
The leading health insurance companies are:
- HDFC Ergo
- Care Health Insurance
- ManipalCigna Health Insurance
- Star Health and Allied Insurance
- Oriental Insurance
- Max Bupa Health Insurance
- Iffco Tokio General Insurance
- New India Assurance
- Raheja QBE General Insurance
- Cholamandalam Insurance
- Bharti AXA General Insurance
Best Health Insurance Policies in India
Here are some of the top-notch health insurance policies:
- SBI Health Insurance
- Bharti AXA General Insurance
- Bajaj Allianz Health Insurance
- Reliance Health Insurance
- National Health Insurance
- Max Bupa Health Insurance
To conclude, it can be stated that a health insurance plan has become a necessity today with ever-increasing health expenditures and increased changes in lifestyle and advent of lifestyle diseases. It is of the utmost importance to secure oneself financially and provide security to the family for unforeseen events. So, the individual should be cautious while choosing any plan and take into account all the essential factors that will safeguard all their needs & requirements and serve as a life-saviour in future.