Types of Health Insurance Policies Available in India
Published On 20 Mar 2019 By Mandeep Kaur Saini
Health Insurance Policies: Choose One That Fits You
In today's lifestyle, health problems are difficult to avoid. Increasing stress, poor nutrition, and intake of fast foods has deteriorated our health leading to investment in sky-rocketing health care costs. Even a regular checkup nowadays costs a few thousand bucks. In such a case, health insurance acts as an umbrella for financial security. Investment in a good health insurance plan helps us to save our finances and get the best of health care services at time of need.
There are various health insurance plans available in India now-a-days and therefore your choice of plan decides whether it is the perfect one for you or not. The perfect plan can be chosen based on numerous factors such as premium, sum assured, coverage, family or individual plan, critical illness, personal accidents, and additional benefits. Today, InsuranceDeKho is going to discuss about all the major health insurance plans available in the market, there benefits and exclusions which will surely help you to choose the best one for you in the future.
Some of the popular types of health insurance policies in India are Individual health insurance, Family floater health insurance, Senior citizen health insurance, Critical illness health insurance, Maternity health insurance, Group health insurance plan, Preventive healthcare and Personal accident insurance. Let us get a detailed picture of all the healthcare policies:
Individual Health Insurance Plans
Individual health insurance plan protects only an insured individual from all the medical expenses covered in his/her respective health plan. It is an agreement between a health insurance company and a policy holder wherein the insurer guarantees to take care of medical costs based on the investment made or premium amount paid by the insured.
Benefits of Individual Health Insurance Plans:
Benefits of having an individual health insurance are immense which includes the best healthcare possible at an affordable premium; one gets the cashless facility which saves you from the hassle of initiating a claim. Here are the other benefits:
- Insured gets all the benefits that are available in the plan taken by him/her.
- The sum assured amount can be completely used by the policyholder without distributing it with any other person.
- The policyholder, if wishes to, can add their immediate family members to the policy in the future.
- Under this plan, any number of claims can be made by an individual in a year as there are no restrictions like the family floater plans.
- The plan covers lifetime renewal as there is no restriction on the maximum age for the members for the renewal of the policy.
- Individual plans generally include hospitalization expenses, pre and post-hospitalization charges, medical examinations cost, surgery cost, laboratory charges, maternity care expenses, and consultation fees.
- The plan provides coverage for critical illness.
- The insured gets tax benefits on premiums paid towards medical insurance under Section 80D of the Income Tax Act, 1961.
Exclusions of Individual Health Insurance Plans:
- In most of the cases, pre-existing diseases are not covered, even if covered, then only after the completion of the waiting period.
- Non-allopathic treatments are not covered in individual health insurance plans but some insurers have started offering insurance for AYUSH treatment, that is, for Ayurveda, Yoga, Unani, Siddha, and Homeopathy treatments.
- Alcohol and drug related issues are not covered.
- Cosmetic surgeries are also not covered under individual healthcare plans.
Family Floater Health Insurance Plans
As the name suggests, a family floater health insurance plan is designed to offer insurance coverage to an entire family unlike an individual health insurance policy. These plans act as an umbrella medical protection to all the family members in case of unforeseen events. The plan saves you a lot of money (as it is cost-effective), time (as only a single plan is capable of fulfilling the medical costs of the entire family), and is hassle-free (as you are safe from the trouble & tension of buying and looking after multiple individual health plans).
Most of the family floater insurance plans in India cover the policyholder, spouse, and dependent children and a few insurers include dependent siblings, parents and in-laws. Most insurance plans cover up to 13-15 members of a family.
To decide on the right family floater health insurance policy, take the below-mentioned factors into consideration:
Lifelong Renewability: Most of the insurance companies offer the option of policy renewability till the age of 60 to 65 and there are some that offer lifelong renewability. Choose a health insurance that provides financial aid when it is needed the most.
Sum Insured Amount: Insurance companies give you the option to increase the sum insured to cover the medical costs as the expenses are increasing day after day.
NCB (No Bonus Claims): If you haven’t made any claims in the previous year, you will receive NCB in the form of an increase in the sum insured.
Cashless Facility: If you choose cashless treatment, you are surely safe from the hassle of initiating a claim for reimbursement. In cases of emergency hospitalization, accidents, non-network hospital admissions, insurers need to pay for treatment first, then claim for reimbursement.
Pre-existing Conditions (including critical illness)- Choose a policy that covers pre-existing conditions or the policy which has a shorter waiting period as compared to other plans.
New members’ addition: If you plan on having a baby, you have the option to go for maternity and new-born baby cover as new member can be added anytime in family floater plan.
Senior Citizen Health Insurance Plans
The older we get, the more our chances are to get targeted by unexpected medical expenditures and lack of income adds to the problem; therefore, the plan which suits the most in such a case is, Senior Citizen health insurance plan. These plans are designed specifically for people who are 60-65 years or above. Senior citizens must invest in a good medical insurance plan that provides them with adequate health cover caused due to an ailment, disability or an accident and offer various special features like cashless hospitalization, critical illness coverage, specific coverage for diseases like Stroke, Cancer and so on. The premium amount depends on the age of the policyholder and the sum insured.
Following factors should be taken into consideration while choosing a senior citizen health insurance plan in India:
Co-payment: It is the fixed amount that the insured has to pay for covered healthcare service and the remaining is paid by the insurer to the hospital. Co-pay depends on the hospital and the specified ailments.
Sub-limit: It is the percentage of sum insured that the insurance company pays such as room rent, doctor’s fee, cataract treatment and cardiovascular treatment.
Waiting period: The waiting period for a senior citizen health insurance plan is higher, for critical illness it is between 1 to 4 years.
Pre-existing Medical case: Some plans offer coverage for pre-existing medical conditions after the completion of a waiting period (which is around 2-3 years) and only up to 50% of the claim is payable in case of pre-existing conditions.
Medical Certificates: Senior citizens have to provide medical certificates while buying a health insurance policy.
Advantages of senior citizen policies:
- A good plan can lead to a peaceful and stress free retired life knowing that their medical expenses will be covered in case of emergency.
- In most of the cases, higher sum assured benefit is given in senior citizen policy.
- Senior citizens, in their chosen plan, can make use of the cashless hospitalization facility available.
- Hospitalization cover including room charges, day care expenses and ambulance charges are included.
Critical Illness Insurance Plans
Critical illness insurance plan provides health cover against severe illness that can be very expensive to treat and usually take a long time to recover. Under this health plan, if within the term of the policy, the policyholder is diagnosed with any of the critical illnesses mentioned in the policy document (after a time frame of 90 days), then the sum assured amount and the related benefits is paid to the insured.
Diseases like cancer, heart attack, aplastic anaemia, permanent paralysis of limbs, muscular dystrophy, and kidney failure are some of the critical illnesses covered. Buy a critical illness rider with Low waiting period, Affordable premium, plan with a good number of illnesses covered, Maximum renewability age of 60 to 65 years or with lifelong renewability and Sum insured of 4 to 5 times the annual income.
Benefits of critical illness plans:
- This plan gives you lump sum amount if diagnosed with serious illness covered by your policy.
- It also covers recuperation (healing) aid and other expenses which your basic insurance plans do not cover.
- Insured can avail tax benefits.
- Apart from covering your medical expenses, the policyholder is also eligible for regular free health check-ups.
- Many insurers also take into consideration the fact that policyholder with critical illness cannot work and therefore offer them daily allowance benefit.
Exclusions of a Critical Illness Rider:
The critical illness rider will not insure you in case of the following diseases:
- Diagnosis of the illness within the first 90 days from the date of policy inception.
- Demise of the member insured in a time period of 30 days from the date of diagnosis or surgery.
- Illnesses caused due to substance abuse, smoking, pregnancy or childbirth.
- Illness caused due to HIV/AIDS.
- War, terrorism, navy or military operations
- Infertility treatment
- Dental or cosmetic surgery.
- Treatment done outside India
- Hormone replacement treatment
Note: Critical illness insurance plan is different than the other health insurance plans and is taken separately as its benefits are mostly not provided in any of the health insurance plans, that is, getting a health insurance plan does not provide medical expenses against any of the critical/fatal diseases.
Maternity Health Insurance Plans
Maternity is a life-altering journey for a woman. With rising medical expenses and overall expenditure, child birth cost has become expensive. Lack of proper planning before your pregnancy may result in burning a hole in your pocket and therefore one has to be financially prepared to welcome a newly born. During maternity, a plethora of consultations, follow-ups, and medical tests are required. To sort out all the financial matters in such a case, maternity health insurance plan acts as a saviour, as a comprehensive maternity health insurance plan keeps your savings in place as the insurance company settles the bill directly with the hospital and gives you a sigh of relief.
Maternity insurance rider can be attached to your base health insurance policy to provide coverage for pregnancy and childbirth expenses. Its benefits can help reduce the cost of hospitalization, delivery (Caesarean or normal), tests, and medication.
Facilities Offered under Maternity Health Insurance Plans:
Pre and Post Hospitalization expenses: Pre-hospitalization expenses of up to 30 days before the date of admission are covered by the insurer along with the post-hospitalization expenses of up to INR 5,000 for 60 days from the date of discharge.
Hospitalization expenses: It covers ambulance fee for emergency transportation, room rent, delivery expense, nursing expense along with surgeon, and consultation fee.
Inclusion of Pre and post natal care: It comprises delivery (both normal and caesarean), and in case any complication arises, post-delivery for mother, then it also covers that.
Coverage for newly born: It provides medical coverage for the new born child diagnosed with a critical illness or congenital disorder. Some plans also cover vaccination expenses for the infant for the first year.
Exclusions of Maternity Health Insurance Plan:
- Doctor's fee for regular health check-ups
- Diagnostic tests, follow ups and consultation fee during the pregnancy period, that is, nine months of pregnancy, are not covered.
- Vitamins and tonics, unless part of treatment or mentioned in the plan, are not covered.
- In-vitro fertilisation and infertility-related expenses
- Non-allopathic treatment costs
Note: In maternity health plan, there is a waiting period of 3 to 4 years before the benefits are activated.
Group/Employee Health Insurance Plans
Group health insurance provides insurance cover to employees of the company. This is provided by the employer to its employees as an incentive to boost their morale and for personnel retention. In this group health insurance plan, the employees can also opt for additional coverage to cover their family members that include self, spouse, children, and parents.
Benefits of Employee/Group Health Insurance Policy:
One of the important benefits of group health insurance policy in India is that it helps any organization retain its employees as they feel safe when their employer offers sufficient insurance coverage for them. Other benefits include:
- Insured members do not have to undergo tests or provide medical certificates to obtain group health insurance. Employees are eligible for the group insurance policy automatically.
- Any employee can avail cashless treatment at network hospitals of the insurer.
- The plan may also provide reimbursement of specialists' fees for follow up health check-ups.
- The policyholders, employers and employees, get tax deductions on the premiums paid.
- The cost of this health insurance is lower as compared to individual health insurance.
- Maternity benefits (covered by some policies) are a part of group/employee health insurance policy which most individual health policies do not cover.
- Claim period is less as claims can be made within first 30 days of getting the group insurance policy.
- Even a relationship manager is assigned to the company to take care of the employees’ policy-related queries.
- Co-payment is not required for the company’s employees above 60 years of age.
- Ambulance cost is covered under the group health insurance plans.
- Some group insurance policies may cover boarding expenses excluding the surgeon, anaesthetist and consultant fees, costs for anaesthesia, oxygen and diagnostic materials, X-rays and dialysis costs among others.
- Some plans also provide coverage for pre-existing diseases after payment of extra premium.
Preventive Healthcare Plans
Preventive health care plans include identification and minimization of disease causing factors at an early stage by detecting the disease through screening. This has become very important since it allows an individual to know about their health issues within time. For example, diagnosis of a fatal disease such as cancer in the last stage can lead to death, whereas, with prior warning, you can get the best treatment and save yourself.
Neglecting a disease may lead to fatal or irreversible conditions and the preventive care plans do not let this thing happen. Preventive healthcare plans include various tests such as HIV test, cancer screening, cholesterol test, sugar test, PAP smear and genetic testing.
Facilities Offered by Preventive Healthcare Plans:
Preventive healthcare packages in India covers the following expenses:
- Regular Checkups: Regular health check-up at network hospitals of the insurer.
- Employee Health Checkup: An employee can go for regular health check-up under group insurance plans for various organizations.
- Family Healthcare: Family preventive healthcare to cover the self, spouse, children, and dependent parents.
- Child Healthcare: Child preventive healthcare package for children aged zero to thirteen (0-13) years.
- Diabetes Plans: Diabetes may affect the vital organs of the body- brain, kidney, heart and liver; therefore, regular check-up of the patients is of extreme importance.
Personal Accident Insurance Plans
As we all know that the accidents are increasing day by day, therefore safeguarding yourself from the unforeseen situation can help you immensely. An accident insurance plan provides for accidental death benefit, disabilities and also for the expenses of hospitalisation, transportation of patient & family and repair of vehicle or residence. Other miscellaneous expenditures can also be covered in this plan.
Apart from covering a policyholder’s medical expenses, personal accident plans offer a sum assured amount to the family in case of demise of the insured. You can attach a personal accident insurance as a rider to your base policy.
There are two types of personal accident plans:
Individual accident insurance: This plan covers an individual in the event of disability, dismemberment or demise due to an accident.
Group accident insurance: Employers provide group accident insurance to their eligible employees. This type of plan usually offers basic cover unlike the individual accident insurance, which provides many benefits. Some of the other features that can be included in a personal accident cover are ambulance fee, burns, daily cash allowance during hospitalization, etc.
Advantages of Personal Accident Cover:
Have you ever wondered how would you manage the financial commitments in case the breadwinner of your family will be permanently disabled or, in the worst case, is not there anymore? Here is when a personal accident plan comes to your rescue.
Some of the benefits of a personal accident plans are as follows:
- Cover ensures family’s security.
- No medical tests or documentation is required.
- Personal accident cover is available for families as well as individuals.
- In India, most of the personal accident covers include legal and funeral expenses.
- Easy and certified claim process
- Worldwide coverage
- 24*7 support system/staff
- Highly customized plan
- In case of accidents, some plans also offer bonuses for kids who are dependent, in case the treatment period is stretched or there is demise of the insured.
Exclusions of a personal accident cover:
- Suicide and self-injuries
- Pregnancy or childbirth
- Pre-existing disability or injury
- Disability due to abuse of substances such as drugs and alcohol
- Death or injuries due to an unlawful act
- Suffering from mental disorder
- Participation in navy, military and air force
- Participation in extreme sports
It can be concluded by saying that health insurance plans are very important in a person’s life, from kids to adults everybody requires security. Health insurance plans offers security against unexpected medical contingencies and keep your family's finances intact in time of need. If we go by keeping in mind the rising medical inflation and spurt of diseases, buying the best health insurance plan is mandatory for every individual. A medical emergency can affect you financially as well as mentally. Therefore, choose the best out of the above-mentioned health insurance plans, in accordance with your needs and budget, without even giving it a second thought.