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Things to Know About Health Insurance in India

Updated On Dec 04, 2020

You’re responsible for your health. You’re responsible for your savings. And you’re responsible for the right investment.

One thing that lets you meet all these responsibilities is an early investment in a suitable health insurance plan.

Purchasing health insurance allows you to take care of your health, safeguard your savings and provide the tax benefits. So, it can the right investment.

Imagine these two scenarios.

Scenario 1:

Sunil works in a private firm in Delhi. His take-home salary is thirty thousand. He has three members in the family. Unfortunately, he falls sick and admitted to a hospital at the dusk of life.

Thanks to Sunil’s intelligence. He has bought a health insurance plan. So, he had not to pay even a single amount to the hospital. So, he guarded his savings.

Scenario 2:

Sunil has worked for good reasons for 25-35 years. Now, he wants a carefree and relaxed life - without caring for his health and others. The retirement age, however, comes with an affair: no fixed income.

At 32, he falls sick and is admitted to a hospital. Since Sunil has no health policy, he has to pay the medical bills from his savings.

Sunil should have had health insurance. He should have planned ahead before settling down. This might have enabled him to avert any conservative at the time of hospitalization after the retirement.

Thus, we can conclude that planning for healthcare early is important. After all, we never know when an emergency situation can strike.

Here is all that you should know about health insurance in India.

What Is Health Insurance?

Health insurance is a type of coverage in which insurance companies agree to undertake a guarantee of compensation for medical expenses in case the insured falls ill/catches a cold or meets with an accident which causes hospitalization.

The insured can, thus, claim payments for his/her medical and surgical expenses.

In general, insurance companies in India have tie-ups with prominent hospitals. This enables them to allow cashless treatment to policyholders. These hospitals are known as network hospitals.

If the insurer has no contract with any hospital, they reimburse the cost of medical treatments incurred by the insured.

Health Insurance Importance

Health insurance policies play a pivotal role in everyone’s life. It is beneficial for both you and your family. Reason being, the treatment cost is expensive. It can put a big dent in your savings. The situation becomes worse when the person (only earning member in a family) is hospitalized. This derails finances.

A health insurance policy enables you to deal with medical emergencies by paying off doctor’s consultation fees, costs of medicines, hospitalization expenses, ambulance charges, post-hospitalization costs to a certain extent, etc.

So, just get ready to pay a small annual premium to buy health insurance online and protect yourself and your family against diseases. It can lessen stress in uncertainties.

Health Insurance Benefits

The advantages of a health insurance policy are manifold. Some of the benefits include:

Cashless Treatment: Cashless treatment means the insured can receive treatment in network hospitals without paying medical bills. This is possible because the insurance company works in association with several hospital networks.

Pre and Post Hospitalization: Many health insurance providers cover pre and post hospitalization expenses up to the period of 60 days. However, the number of days can differ depending on the plans purchased.  

No Claim Bonus (NCB): NCB is the bonus paid to the insured in case s/he doesn’t file a claim for any treatment during the term of the health policy.

Medical Checkup: Some insurance policies also offer health checkup benefits. In addition, there are others that provide options for free health checkups based on previous NCB’s.

Transportation Charges: Most of the health insurance companies provide coverage for the amount paid to an ambulance to transport the insured.

Room Charges: Apart from the above benefits, health plans also provide cover for room charges depending on the policy purchased.  

Tax Benefit: The premium you pay against your policy is deductible under section 80D of the Income Tax Act.

Types of Health Insurance

Different types of health insurance products are available online in India. Here are some of them:

Individual Health Insurance: Individual health plan is designed to cover the medical and hospitalization expenses of the individual against whom the policy has been issued.  

Family Floater Plan: This policy is an umbrella term for the entire family members. It enables you to include all members of the family against several diseases under a single cover.

Under this policy, all members or a single member can avail a fixed sum assured.

Senior Citizen Plan: As the name suggests, a senior citizen insurance policy covers senior citizens or people over 60 years of age. This plan offers protection against health issues during old age.

Critical Illness Policy: Critical illness insurance plan is suitable for the insured person who needs treatment against critical illnesses like paralysis, kidney failure, cancer, heart attack, etc. Since the expenses of these treatments are very high, the premium is also high.

Maternity Health Insurance Plan: This plan is good for pregnant women. It covers pre and post hospitalization, delivery costs, ambulance, vaccination charges for the newly born up to one year. The coverage depends up to a certain time as described in the plan.   

Personal Accident Plan: A personal accident policy provides covers for hospitalization expenses if the insured meets an accident. The premium of the policy depends on the amount of cover taken.

Choosing the Best Insurance Policy

Choosing the best insurance policy is daunting, as almost every insurance company has similar products. When you search for health insurance online, look at some points before choosing a policy.

These points are Sum Assured, Inclusions, Exclusions, Renewability clause, Room Rent Capping, No Claim Bonus, Minimum Entry Age, Other Benefits.

Documents Required

There are certain documents you need to submit to avail a health insurance policy. Generally, these documents are:

  • Identity proof: Identify proof may include passport, driving license, PAN card, voter ID, Aadhar Card.
  • Age proof – For the age proof, you can provide a birth certificate, 10th mark sheet,  passport, driving license, voter id, etc.
  • Address proof – documents for address proof include telephone bill, electricity bill, ration card, aadhaar card, driving license, passport.

Besides these documents, passport size photos are required.

Before choosing a health product, make sure all the documents you need to provide to the insurer.

Right Age to Buy Health Insurance

There is a common confusion among individuals about the right age to own health insurance. In reality, there is no right age when it comes to buying a health policy. But early purchase can let you pay a lower premium and enjoy maximum covers.

Premiums increase according to your age. This is because the associated health risks increase too. Usually, medical history, age, location, etc. determine the premium rates.

That’s why if you choose to buy a health plan at an early age, you will save on the premiums.

Health Insurance Claim Process

The primary concern of health Insurance is to offer the best healthcare treatment to the insured without letting him/her worry about the expenses payable at the time of discharge. Therefore, it is essential to know the claim settlement process.

There are two claim processes:

1. Cashless Claim Process

2. Reimbursement Claim Process

Cashless Claim Process: This option is only applied if you get treatment in a network hospital. In the event of hospitalization, you need to provide the policy details to the respective hospital. Then the hospital will start the treatment.

Upon the discharge, the hospital forwards the medical bills to your insurer. The insurance company then will review the costs and pay the bills.  

This is a hassle-free option as all the payment procedures take place between the hospital and the insurance company.  

Reimbursement Claim Process: This process is applied when you get treatment at a non-network hospital. In this process, you have to pay the entire treatment costs.

After paying the treatment and hospitalization costs, you have to make a reimbursement claim to your insurance company by providing original bills and other documents required by the company.

After the insurer receives all the documents, they step to audit the claim and decide to approve or reject the claim. If the claim is approved, then they will reimburse the amount.

Also Read

Things to Know Why You Should Buy Top Up Health Insurance?

9 Step-by-Step Guides to Buy Medical Insurance Online


I hope, this article has helped you understand basic things about health insurance in India. However, it is essential to go through the policy documents before finalizing any health plan.

Buy a policy only when you’re completely satisfied with it.

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