Feb 25

Health Insurance

Team Antworks

Key factors to consider before buying Health Insurance

Co-pay

Co-pay is a fixed percentage of the hospital bill you will have to pay when you make a claim, while the balance will be paid by the insurance company. For e.g. If your policy has a 10% Co-Pay clause, it means for a Rs 1,000 claim, you have to pay Rs 100 while the insurer will pay Rs 900. Ideally, opt for a “no co-pay” plan so you don’t have to shell out for every claim.

Waiting Period for Pre-existing Diseases

Pre-existing diseases are classified as diseases/conditions that a person has before buying health insurance. All pre-existing diseases aren’t covered from day one of buying the policy. The time taken to cover pre-existing diseases will vary from plan to plan. Check the amount of time taken to cover pre-existing diseases in your plan.

Lifelong Renewable

The duration of coverage is the most important factor in buying a health insurance policy. Your health is most likely going to deteriorate only in your sunset years so ensure that your coverage is lifelong and not for a few years. Always go for a plan that can be renewed lifelong.

Room Rent

Your room preference during hospitalization matters (such as shared room, private room or private room with high-end facilities). A costlier room means you’ll pay higher treatment and hospitalization charges! It’s better if your plan has a higher room rent limit per day.

What is Health Insurance?

A health insurance policy is a contract between the insurance company and the policyholder, wherein the insurer pays for the medical expenses incurred by the life insured. The insurer will either provide a reimbursement for your medical expenses or ensure you are eligible for cashless treatment for injuries or illnesses covered under the policy at one of the network hospitals. You can also get tax deductions on the premiums paid towards health insurance under Section 80D of the Income Tax Act, 1961.

Broad Classification of Health Insurance Plans in India:

Medical insurance plans in India can be broadly classified into two types, namely reimbursement or indemnity based policies and fixed benefit hospitalization plans.

Reimbursement or indemnity-based health insurance: This type of health insurance plan is commonly known as mediclaim. The insurer will reimburse any medical expenses incurred due to hospitalization, diagnosis, and pre and post-hospitalization treatments. Mediclaim plans have an annual limit which is renewed every year. This type of plan is available as:

Individual Health Insurance Plan: Under an individual health insurance plan, only one person is covered for the chosen sum insured. Family members can be enrolled under this plan but a different sum insured has to be chosen for each member.
Family Floater Insurance Plan: This type of plan is customized for families, wherein a fixed sum insured is available for all insured members for one or more claims during the policy tenure. Spouse, dependent children, and parents can be included under this plan.
Fixed benefit hospitalization plans: This type of plan offers fixed coverage and benefit payouts if the insured member is diagnosed with a specified illness or is hospitalized. It partially covers hospitalization costs and provides a substitute income. Some health insurance add-ons or riders that can be attached to your base policy are:
Critical illness plans: The insurer will pay a fixed benefit payout if the insured person is diagnosed with any of the critical illnesses specified under the policy. The lump sum benefit can cover hospitalization cost and act as an income supplement.
Hospital Cash and Surgical benefit plans: This plan covers defined hospitalization and surgery costs. Medical bills will have to be submitted to the insurer to receive the benefits.

Statistics of Leading Health Insurance Companies

Health Insurance Companies	Incurred Claim Ratio	Grievances Solved	Network Hospitals	Number of Policies Issued	Number of Persons Covered
Apollo Munich Health Insurance	54.99%	99.6%	4000+	6,81,314	25,33,000
Bajaj Allianz General Insurance	70.41%	97.5%	3700+	4,73,346	21,67,000
Bharati Axa General Insurance	86.84%	99.1%	5000+	21,692	3,18,000
Cholamandalam MS General Insurance	72.91%	99.6%	2600+	75,189	34,94,000
Cigna TTK Health Insurance	48.14%	98.2%	4000+	1,23,921	1,44,000
Future Generali Health Insurance	77.31%	100.0%	4300+	41,310	43,64,000
HDFC ERGO General Insurance	76.9%	99.5%	4800+	4,72,566	10,98,000
ICICI Lombard General Insurance	80.38%	98.3%	4500+	8,90,383	2,26,97,000
IFFCO Tokio General Insurance	81.96%	99.9%	3000+	1,56,118	72,34,000
L&T General Insurance	77.83%	100.0%	2800+	71,931	8,52,000
Liberty Videocon Genral Insurance	79.14%	99.4%	3000+	10,918	2,31,000
Max Bupa Health Insurance	51.96%	100.0%	3500+	3,07,007	20,40,000
National Health Insurance	97.25%	96.5%	6000+	17,80,030	8,51,02,000
Reliance General Insurance	92.23%	97.6%	4000+	80,625	1,91,41,000
Religare Health Insurance	50.52%	98.9%	4500+	3,20,316	11,98,000
Royal Sundaram General Insurance	78.13%	99.2%	3000+	1,88,662	8,02,000
SBI General Insurance	75.01%	95.8%	4400+	1,98,876	21,79,000
Star Health and Allied Insurance	60.51%	98.7%	6000+	25,79,591	85,47,000
Tata- AIG General Insurance	72.32%	100.0%	3000+	1,60,790	22,29,000
New India Assurance Health Insurance	91.26%	96.7%	1200+	17,85,302	7,71,24,000
Oriental Health Insurance	112.11%	95.1%	4300+	13,78,773	1,08,35,000
United India Insurance	107.06%	99.7%	7000+	11,60,432	10,35,02,000
Universal Sompo General Insurance	70.91%	100%	5000+	1,62,577	11,32,000

Types of Health Insurance Policies Available in India:

Some of the popular types of health insurance policies are explained below.

Individual Health Insurance Plans:

As the name suggests, individual health insurance policies are designed to protect an individual from emergencies medical expenses. It is an agreement between an insurance company and an individual under which the insurer promises to cover the medical cost incurred by the insured person in return for a premium amount paid by the customer.

Most of the individual health insurance plan covers hospitalization expenses, pre and post-hospitalization expenses, medical examinations charges, laboratory charges, maternity care expenses, and consultation fees.

Advantages of individual plans:

One policyholder gets all the benefits that are available in the plan under the individual health insurance policies.
The sum assured amount can be completely used by the insured person without distributing it to anyone.
The individual policyholder can add their immediate family members to the policy in the future, if the insured person wishes to.
Unlike a family floater plan, there are no restrictions on the number of claims that can be made in one year as any number of claims can be made by an individual in a year under this plan.

Exclusions of an individual health insurance plan includes:

Pre-existing diseases are mostly not covered. Some insurance providers offer cover for pre-existing diseases after the completion of the waiting period.
Non-allopathic treatments are not covered by individual health insurance plans but recently some insurers have started offering insurance cover for AYUSH treatment which includes Ayurveda, Yoga, Unani, Siddha, and Homeopathy treatments.
Substance abuse treatments such as alcohol and drugs are not covered.
Cosmetic surgeries aren’t covered by medical insurance plans.

Benefits of having an individual health insurance include receiving the best healthcare possible at an affordable premium. With the cashless facility, you don’t have to go through the hassle of initiating a claim or providing documents to get reimbursement. You can get tax benefits on premiums paid towards medical insurance under Section 80D of the Income Tax Act, 1961.

Family Floater Health Insurance Policies:

A family floater health plan that is designed to offer insurance coverage to an entire family. Unlike individual health insurance plans, a family floater medical insurance policy does not focus on only the policyholder. These plans are ideal for families. It acts as an umbrella plan as it covers the entire family from unforeseen medical expenses.

Buying a family floater health insurance plan will save you a lot of money, time, and hassle as you don’t have to buy and manage multiple individual health plans. Most of the family floater insurance plans cover the policyholder, spouse, and dependent children.

However, there are few insurers who allow policyholders to include their dependent siblings, parents, and parents-in-laws. Though family floater plans are quiet famous in India, one should do sound research before buying any medical insurance plan. Most of the family floater insurance plans cover up to 15 relationships.

As the entire family is covered under one policy, you don’t have to go through the hassle of purchasing and maintaining different policies for each member. Choose a policy that offers lifetime renewability and covers pre-existing conditions. Some plans can be attached to a critical illness rider that offers coverage against specified critical illnesses. To decide on the right policy, take the following factors into consideration:

Renewability: Most insurers offer policy renewability option till the age of 60 to 65. There are some health insurance companies that offer lifelong renewability. Choose a family floater health insurance that provides financial protection when it’s needed the most.
Sum Insured: Healthcare costs keep rising every year. Health insurance companies give you the option to increase the sum insured to cover the rising healthcare costs. Also, if you haven’t made any claims in the previous year, you will receive a No-Claim Bonus (NCB) in the form of an increase in the sum insured.
Cashless treatment: If you choose cashless treatment, you don’t have to go through the hassle of initiating a claim for reimbursement. Just make sure the network hospitals listed in the policy are good ones.
Addition of new members: If you plan on having a baby, you have the option to opt for maternity and newborn baby cover.

Senior Citizen Health Insurance Plans:

As the name suggests, senior citizen health insurance plans are tailor-made for the senior citizens who are more than 60 years of age. One of the biggest fears that a senior citizen might face when he/she retires is if they will be able to take care of unexpected medical expenses which are sure to arise given the age factor with the limited income they get every month.

With the change in lifestyle and improved healthcare facilities in India, the average lifespan of an Indian citizen has increased from 53 years to 71 years in the last 2 decades. A longer lifespan means a longer retirement period. Senior citizens, especially pensioners and retirees above 60 years of age have to invest in a good medical insurance policy that provides them adequate health cover against medical expenses caused due to an ailment, disability or an accident.

Take the following factors into consideration when choosing a senior citizen health insurance plan:

Co-payment: It is the fixed sum of money that the life insured has to pay for covered healthcare service. Co-payment depends on the hospital where treatment is received, the specified ailments, and specific hospital charges.
Sub-limit: It refers to the percentage of sum insured that the insurance company will pay for certain hospital expenses and illnesses such as room rent, doctor fee, cataract treatment, cardiovascular treatment, etc.
Waiting period: The waiting period for a senior citizen health insurance plan is higher, from 1 to 4 years for certain illnesses.
Pre-existing conditions: Some health insurance plans offer coverage for pre-existing conditions after the completion of a waiting period of 2 to 3 years. Only up to 50% of the claim will be payable in the case of pre-existing conditions.
Medical check-up: Senior citizens have to provide medical certificates when purchasing a health insurance policy.

Advantages of senior citizen policies:

A comprehensive senior citizen health insurance plan gives peace of mind to the elderly and helps them lead a peaceful retired life knowing that their medical expenses will be covered as and when they occur.
Mostly, higher sum assured benefit is given to a senior citizen.
Senior citizens can make use of the cashless hospitalization facility available under their insurance plan. A senior citizen doesn’t have to arrange for funds in case of an emergency hospital visit as the insurer will settle the bill directly with the hospital.

Critical Illness Insurance Plans:

Critical illness plans are very important as the number of fatal illnesses are increasing day by day. Critical illness is a serious health condition that affects the lifestyle of a person and is often fatal. Apart from the bodily pain and emotional trauma that a person goes through, they also have to face serious financial crisis. To help people with critical illness, health insurance providers in India offer comprehensive critical illness plans at affordable prices in India.

Under a critical illness plan, the policyholder pays a premium and purchases a policy from an insurance provider. If within the term of the policy, the policyholder is diagnosed with one of the critical illnesses mentioned in the policy document, a sum assured amount and the related benefits will be paid. Many insurers also consider the fact that the policyholder with a critical illness cannot work and therefore loses regular income and offer them daily allowance benefit.

An indemnity health insurance policy may not be sufficient to cover a critical illness treatment. Critical illnesses may lead to disability and loss of income. A critical illness rider can be attached to your base policy to give you enhanced financial protection. Most insurers cover 6 to 15 critical illnesses. Choose a critical illness rider with:

Low waiting period
Affordable premium
High number of illnesses covered
Maximum renewability age of 60 to 65 years
Sum insured of 4 to 5 times the annual income

Cancer of specified severity, heart attack, aplastic anemia, muscular dystrophy, permanent paralysis of limbs, and kidney failure requiring regular dialysis are some of the critical illnesses covered under this rider. A critical illness claim can be initiated once you are diagnosed with any of the critical illnesses specified in the policy.

Advantages of a critical illness plan:

This plan comes to your rescue when you are diagnosed with a critical illness and protects your savings which you would have used if you didn’t have a critical illness plan.
Most of the insurers also cover recuperation aid and other expenses which your basic insurance plan would not cover.
A policyholder with a critical illness plan can avail tax benefits.
Apart from covering your medical expenses, under the critical illness plan, the policyholder is eligible for regular free health check-ups.

Exclusions of a critical illness rider includes:

Diagnosis within the first 90 days from the date of policy inception.
Demise of the insured member within 30 days from the date of diagnosis or surgery.
Illnesses caused as a result of substance abuse, smoking, pregnancy, childbirth or congenital disorder.
Illness caused due to HIV/AIDS infection.
Infertility treatment, and dental or cosmetic surgery.
Treatment received outside India.

The policy tenure of a critical illness rider can be anywhere between 10 to 15 years with annual renewability option.

Maternity Health Insurance Plan:

One has to be financially prepared to welcome a baby home. During maternity, many consultations, follow-ups, and medical tests are required. To help people cope up with their maternity expenses without breaking their savings, many insurers offer maternity health insurance plan at an affordable price.

A maternity insurance rider can be attached to your base health insurance policy to provide insurance cover for pregnancy and childbirth expenses. Maternity benefits can help reduce the cost of hospitalization, delivery, tests, and medication. Maternity insurance is offered as add-on in group insurance policies offered by employers with a sub-limit of up to Rs.50,000.

Here is a sample list of expenses covered by a maternity insurance rider:

Pre-hospitalization expenses of up to 30 days before the date of admission.
Post-hospitalization expenses of up to Rs.5,000 for 60 days from the date of discharge.
Ambulance fee for emergency transportation, room rent, delivery expense, nursing expense, and consultation fee.
Treatment costs for childbirth complications.
Medical cover for infants diagnosed with a critical illness or congenital disorder.

Maternity health insurance has to be bought before conceiving as there is a waiting period of 3 to 4 years before the benefits are activated. Exclusions of maternity health insurance includes:

Doctor’s fee for regular health check-ups.
Diagnostic tests and consultation fee during the pregnancy period.
Vitamins and tonics unless mentioned in the plan is not covered.

Advantages of maternity insurance plans:

A comprehensive maternity health insurance plan keep your savings in place as the insurer settles the bill directly with the hospital.
Some maternity health insurance plans also cover vaccination expenses for the new-born baby for the first year.
Maternity health insurance plan also covers post-hospitalization expenses and other complications caused due to the delivery.
Some plan also covers the new-born baby for the first 90 days if the baby is diagnosed with any congenital disorder or other critical illness.

Group/Employee Health Insurance Schemes

Group health insurance provides insurance cover to a group of people like employees, members of associations, etc. Employers provide group medical insurance to their employees as an incentive to boost morale and retain personnel. The employees can opt for additional coverage to cover their family members. Employers and employees can get tax deductions on premiums paid towards group health insurance as per the Income Tax Act of 1961. Employee health insurance covers self, spouse, children, and parents. Some insurance companies provide cover for pre-existing conditions and maternity expenses.

With employee health insurance, you can avail cashless treatment at network hospitals of the insurer. This type of health insurance may also cover ambulance fees and provide reimbursement of specialists’ fees for follow up health check-up.

Benefits of corporate health insurance plans:

Listed below are some benefits of opting for a group or employee health insurance policy:

Unlike an individual medical insurance policy, insured members don’t have to undergo tests or provide medical certificates to obtain group health insurance. Employees of the organization are eligible for the group insurance policy automatically.
The cost of group health insurance is lower compared to individual health insurance as the employer pays a part of the insurance premium.
Maternity benefits are a part of group health insurance which most individual health policies don’t offer.
Same goes for pre-existing conditions, group health insurance covers pre-existing illnesses.
Claims can be made within first 30 days of getting the group insurance policy.
A relationship manager will be assigned to the company to take care of the employees’ policy-related queries.
Co-payment is not required for members over 60 years of age in the case of group health insurance.
Employer health insurance plans offer cashless hospitalization which is very useful.
Ancillary charges like ambulance costs and other charges are covered under the group health insurance plans.
One of the important benefits of group insurance plan is that it helps organization retain their employees. Employees feel safe when their employer offers sufficient insurance coverage.

Preventive Healthcare Plans

Preventive health care includes testing, detection, and minimization of disease-causing factors in an individual at an early stage. For example, diagnosis of cancer in later stages or a heart condition is ineffectual. Whereas, with prior warning, you can get the treatment required to keep the disease from spreading or becoming fatal. Regular health check-up can keep you aware of your health condition. Health insurance companies in India offer preventive health care packages to cover the following expenses:

Regular health check-up at network hospitals of the insurer.
Employee health check-up under group insurance plans for various organizations.
Family preventive healthcare to cover the self, spouse, children, and dependent parents.
Child preventive healthcare package for children aged 0 to 13 years.
Diabetes preventive healthcare.
Specific disease-related plan: Under this type of preventive health care plan, a specific disease like diabetes is covered. Any time a policyholder incurred medical expenses for that specific disease, the insurer covers the bill as agreed during the inception of the policy.
Preventive health care insurance plans based on age: Many insurers also offer preventive health care insurance plans based on the age of the insured.

Preventive healthcare insurance is beneficial in keeping the insured member aware of his or her health condition and receiving appropriate treatment in a timely manner. Preventive tests include HIV testing, cancer screening, cholesterol and sugar testing, PAP smear, genetic testing, etc.

Personal Accident Insurance:

Accidents, however minor or deadly cannot be predicted. All accidents take your time, money, and attention irrespective of the intensity of the accident. Did you know that the number of road accidents keeps increasing from year to year? Like your motor insurance that protects your vehicle in case of any accidents, a valid health insurance with an accident cover is important to cover your health-related expenses in case of an accident.

Apart from covering your medical expenses caused due to an accident, most of the personal accident covers also gives your family or loved ones a sum assured amount in case of an insured person’s sudden demise. This makes sure that your family is financially safe in case of any eventuality. A personal accident cover is a rider that can be attached to your base insurance policy.

Advantages of personal accident cover:

Imagine what will happen if the earning member in your family is permanently disabled or worst case not there anymore. How would you manage the financial commitments? Here’s when a personal accident cover comes to your rescue. Some of the benefits of a personal accident cover are as follows:

A personal accident cover ensures family security.
No medical tests or documentation is required to avail a personal accident cover.
Personal accident cover is available for both families and individuals.
Most of the personal accident covers available in India cover legal and funeral expenses.
The sum assured or other benefits available under a personal accident cover can be personalised to suit one’s needs.
Injuries sustained due to terrorist acts are also covered under this policy.

Exclusions of a personal accident cover includes:

Suicide and self-inflicted injuries
Pregnancy or childbirth complications
Pre-existing disability
Disability due to abuse of substances such as drugs and alcohol
Death or injuries due to an unlawful act or war
Participation in extreme sports

There are 2 types of personal accident plans:

Individual accident insurance: This plan covers an individual in the event of permanent total or partial disability, dismemberment or demise due to an accident.

Group accident insurance: Employers provide group accident insurance to their employees as a value-added advantage. The employee’s family will be safeguarded against financial contingencies. This type of plan usually offers basic cover, unlike the individual accident insurance.

Healthcare Insurance Benefits:

A comprehensive health insurance plan with excellent features has various benefits to the policyholder. While the biggest benefit of having the best insurance plan is that you are always financially protected in case you have a medical emergency, there are many other benefits too. Some of the benefits are:

No-claim bonus (NCB): NCB refers to the percentage of discount that is given to the policyholder from the insurer for every year that the former has made no claims. It encourages the policyholders to not make petty medical claims. Please note that NCB can be given as a discount on the premium payable while renewing the policy or the insurer may choose to increase your sum assured amount. While renewing a health insurance policy, it is very important to check if you have received your no-claim bonus.
Family/loyalty discounts: Family and loyalty discounts are given to a policyholder who enrolls a family member or another person in the health insurance plan. This is a reward paid by the insurance company to the policyholder for referring people to them. The policyholder also benefits from the discount given as insurers usually give 5% to 10% discount on the premium which is payable by the new member.
Round-the-clock customer support: Most people find insurance plans to be complicated. To help people understand their health insurance plan better and to answer queries if any, all health insurance provide 24/7 customer service.
Sum Assured Restoration: Most of the time, policyholders with a family floater plan are afraid that the total sum assured amount available under the plan can be exhausted if one person is critically ill. To help people make optimum use of their sum assured, insurers these days offer sum assured restoration benefit. If a policyholder 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. Health insurance plans with restoration benefit are expensive than the regular health insurance policies.
Cashless facility: India is going digital and so is our healthcare system. Gone are the days you had to carry cash in hand to pay your medical bills. In case of hospitalisation, when you have a health insurance plan, the insurer will settle the bill directly with the hospital. The insured person does not have to pay the bills. This has helped many people significantly as they don’t have to arrange for funds during an emergency medical situation.
Online application and renewal facilities: Insurance providers these days have a great online presence. All of them keeps their websites updated at all times as it is very important for them to keep in touch with their customers, to gain new ones, to upsell, and to launch new insurance products. As a customer, you will be able to buy or renew your health insurance plan within few seconds from the comfort of your home.
Free check-ups: To encourage their customers to lead a healthy life, most insurance providers also offer free medical check-up facility once in a while. Depending on the type of policy that a policyholder holds, he/she may be eligible for a master health check-up.
Lifelong renewability: It is very important to choose a plan that protects you for a very long time, especially during your old age. That is exactly why many health insurance plans these days come with lifelong renewability option. The policyholders will be allowed to renew for a lifetime. To keep the insurance cover always active, the insured has to renew the policy at the end of every policy term.
Co-payments/deductibles: When it comes to health insurance plan, policyholders will have an option to choose to co-pay. 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 is borne by the insured. Please note that the sum assured amount under the plan will not be affected by co-payments.
Claim updates and quick settlements: Due to competition, the quality of customer service in the health insurance industry has increased by leaps and bounds. To retain their customers, insurers treat their claims professionally and send them updates about the status of their claims via email/SMS/phone call. Also, the claim settlement ratio has gone up in the last few years. The claim settlement ratio of an insurer is very important as it indicates the number of claims that an insurer has rejected versus the number of claims the insurer has settled. This ratio will let you know if the insurer is playing a fair game.
Tax benefits: Not to forget, all health insurance policyholders can enjoy tax benefits for the premiums paid towards the plan under Section 80D of the Income Tax Act, 1961. If you are filing taxes and are looking for ways to reduce the tax amount you pay, invest in a health insurance plan today.
Portability: Often we tend to go back to our service providers and switch to another company that caters to our needs better. The same rule applies to health insurance providers as well. One of the benefits that health insurance plans offer today is portability. The policyholder will be allowed to switch from one insurance company to another without compromising on the waiting period or any other features and benefits which were available with the previous insurer.