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Health Insurance Guide

Health Insurance <br>
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Insurance is a subject that is not so easy to comprehend, especially for common people, who are not familiar with its finer details. In fact, there are some terms in insurance that you may have never heard of or maybe you don't know what they mean. Hence, some people think insurance documents are incomprehensible even after meticulous reading and analysis and thus refrain from buying a policy.

Are you one of those staying away from insurance because you think it is hard to buy? If so, let's make an effort to offer some understanding about insurance by means of simple explanations to educate you about the complicated terms and concepts.

Further, it will enlighten you on how insurance influences your life and what all features of a health policy you should or shouldn't opt for. So, let's get started with the most common and popular features of health insurance as mentioned below.

Read more on Free Look Period in Health Insurance >>

Deciding on a Plan - Whether to go for Individual or Family-Floater

Simi, who works in a private company, has been looking for a health policy for some time now. She approached a few health insurance providers and got the quotes from them. She is however confused about the kind of plan that she should opt for - Individual health insurance policy or family-floater health insurance plan.

She was earlier planning to buy an individual health insurance plan to suit her needs. Since she knows that an individual health plan will safeguard her against expenses incurred towards her overall Hospitalization treatment and wellbeing.

But she later realized that she needs health insurance for parents as well to secure their health since they are getting old and are not covered under many health plan. Thus, it added to the confusion to choose between individual health plans for her and her parents separately or to buy a family health insurance policy to cover them all.

Read more on Why Employer Health Insurance is not Enough? >>

Individual or Family-Floater

So, to make her decision easy Simi adopted the comparison approach to choose between an individual health insurance plan or health insurance plan for family:

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Comparison (Points) Individual Health Insurance Plans Family-Floater Health Insurance
Meaning These plans protect an individual against numerous Hospitalization treatment expenses incurred towards his/her overall health and wellbeing. Here, the coverage is offered as per the sum insured and the premium paid by the policyholder. Family-floater health plans allow coverage to all members of a family under one policy. They are available on a family floater or individual sum insured basis.
Who all are covered? Only the individual who is insured under a policy. All family members who are insured under a plan.
Benefits It is more expensive as every person has his/her own sum insured. It is a cost effective health insurance plan as all members of the family get protection under one plan and one premium.
Detriment Premium are Higher for Family with Individual Sum insured as compared to Family floater Here, the sum insured may not be enough for all family members.
Preference Suits bigger families with senior citizens.
Single individuals without dependents.
Suits well for nuclear families.
Recommendations Buy relevant add-ons to have exclusive coverage Opt for an increased sum insured to have sufficient coverage for all family members. And Opt for Sum insured Re-instatement benefit

The above comparison helped Simi make the right decision. She now knows which policy to choose to suit her precise requirements.

Read more on Health Insurance Benefits >>

Coverage Amount (Sum Insured)

Once you pick the health insurance plan that you seek to buy, the next important feature to choose is the Sum Insured (SI) or the coverage amount of your policy. Here, again the great confusion resumes. How to choose the right coverage amount? How much health insurance do you need? All these and more questions will crop up once you initiate to buy a health insurance plan.

In the above case, the comparison of plans helped Simi to make the right decision on buying the right policy. However, now she is perplexed as to how much sum insured or coverage amount does she require to protect her health as well as the health of her parents. Simi knows that the sum insured depends on various things including the type of policy.

Like Simi, if you too are planning to buy a health policy and are uncertain about the sum insured, you must note that in individual plans sum insured simply cater to the needs of the policyholder. Whereas, if it is for a family-floater policy which also includes senior citizens/parents, spouse, kids etc., the SI is shared among all the family members. Thus, you would require an enhanced coverage amount if you are availing a family-floater policy so that all the members of the family are well protected.

Coverage Amount (Sum Insured)

So, it is important to include realistic coverage amounts for health insurance. As such, the medical or healthcare costs are soaring high with every passing day. Thus, an amount that might appear adequate now may not be so a few years down the line. So, there is no ideal coverage amount for a health plan and it depends on varied factors. But the market rule states that health insurance coverage should be 2 times your annual income.

Remember, your health coverage amount depends on factors that affect you and your family members, like the type of plan, age of the insured individuals, health condition of the insured people etc. So, consider every aspect before choosing the amount.

Read more on Factors that Affect Health Insurance Premium >>

Waiting Period for Pre-Existing Conditions

The waiting period in health insurance is the scariest part of buying a health plan. Once you opt for a policy and the initial phase of communication with the insurer is over, you reach this stage of endless queries related to your medical history. What diseases do you already have? Which ailments made you stay in a hospital for days? etc. Once the question answer session is over comes the session of medical examinations and tests.

As per the reports of the tests, the insurer specifies the hospitalization coverage allowed under your health plan for diseases that are not associated with your pre-existing medical conditions. However, for all the pre-existing diseases the insurer will levy a waiting period that you have to undergo, which can be of 1 to 4 years. So, you can avail the insurance benefits for your existing diseases only after completing the waiting period. This is a tricky condition which creates problems for the insured. For instance,

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Recently, Mr. Surinder Sharma, who is a simple service class middle aged man bought health insurance to cover him against medical emergencies. Since he had high blood pressure he disclosed it to the insurer. The insurer levied a waiting period of 2 years on his health policy. Unfortunately, he went through a heart ailment and had to undergo surgery the very next year. But he couldn't avail the benefits of his health plan because of the policy of health insurance waiting period.

Now, the waiting period is something that is a part and parcel of almost all health insurance policies. So, you cannot avoid it. However, you can make sure to buy a policy that offers the least time of waiting period so that you do not suffer like Mr. Sharma.

Hence it is suggested to start a Health cover in early age before the onset of such long term diseases.

Read more on What is a Pre-Existing Disease? >>

Consider Room Rent Restrictions

Consider Room Rent Restrictions

For a starter, the term 'Room Rent Restriction' might not denote much. Jaspal, who works as a designer in a private university, recently bought a health insurance plan. The insurer gave him the plan with a room rent restriction of 1% of the sum assured. Since, he opted for a plan with a sum insured of INR 5 lakh, the room rent came to INR 5000 per day, which is not much if you seek better hospital rooms.

However, Jaspal, being a novice with no knowledge of insurance, didn't consider the fact about the room rent limit at the time of buying the policy. One year later, he went through hospitalization for removing his gall bladder and he realized that he cannot stay in his preferred room because of the room rent cap set by his insurer. Even if he pays from his own pocket and opts for a plush room with extra charges, he will not get complete coverage benefits for other expenses like surgeon fee, consultancy charges etc., as these are proportionately deducted, So, he will have to bear them from his own pocket.

Thus, it is important to consider what is room rent capping in health insurance to avoid policies with such capping. Or if you have to buy a policy with such limitations, just ensure not to cross the cap while choosing a room in a hospital. Otherwise, you will be paying a hefty amount from your pocket.

Read more on What is Hospital Cash Insurance? >>

Consider Room Rent Restrictions

Don't Avail Co-Pay if not Mandatory

Sunil, a trader of cosmetics, is finalizing a health care plan. He got the quotes and has opted for a plan that offers health coverage of INR 5 lakhs for a premium of just about INR 6700. While negotiating the plan with the insurer, he was further offered a discount of INR 1700 on premium. However, to avail the discount, he must opt for a 20% co-pay.

Now, Sunil already knows about co-pay meaning from his friend. He knows what is co-pay in health insurance? And he knows that if he falls sick and gets hospitalized, he might have to pay more from his pocket despite having insurance if he agrees to the insurance co-pay clause. So, he calculated that if he avails this discount of INR 1700 per annum, his financial need would not suffice in case he falls sick and goes through hospitalization. Because in that case he might be required to pay 20% of the claim amount from his own pocket due to this co-pay discount. So, he has promised himself never to go for Co-Pay if it is not mandatory or if he is not buying health insurance for senior citizens.

For instance, if Sunil opts for the co-pay of 20% and, on claim, his medical bills amount to Rs.2 lakhs, he will have to pay Rs.40,000 from his pockets (20% co-pay on Rs.2 lakhs) and his insurance company will pay the remaining Rs.1,60,000. Saving Rs.1700 on premium only to bear Rs.40,000 on claims is a bad choice, is it not?

Avoid co-pays, if possible, to protect your finances at the time of a claim.

Read more on What is Copay? >>

Always go for Pre & Post-Hospitalization benefits

Simi, who was confused about buying an individual vs. family health insurance policy, finally opted for a plan that fulfills her requirements. She considered most of the things while buying the policy but somehow missed to discuss the pre and post hospitalization charges. Soon, she realized that she had to undergo some complex diagnostic tests to comprehend a medical condition she has been suffering from for some time now.

Her friend suggested that she should opt for the pre-hospitalization benefit of her insurance policy. However, she is not sure if her policy covers the same or not. She enquired with the insurer and found that her policy offered coverage for pre and post-hospitalization charges. So, she is relaxed now. She can claim for the thousands of rupees she spends on the various tests to diagnose her problem.

You may note that almost all health policies offer Pre- Post hospitalization cover of 30 to 60 days which every policyholder can take benefit of.

Pre-hospitalization coverage covers the medical costs that you might incur before being hospitalized. For instance, in Simi’s case, the cost of diagnostics, doctor’s consultations, medicines, etc. that she incurred before actual hospitalization are pre-hospitalization expenses.

Post-hospitalization expenses, on the other hand, mean expenses that are incurred after discharge. Once you are treated and discharged, you might incur medical expenses on follow-up consultations, diagnostic tests, etc. These expenses are also covered up to a specified number of days.

Read more on What are Pre- and Post-Hospitalization Expenses? >>

Check the Restoration Policy

Check the Restoration Policy

As you know, health emergencies never appear pre-informed. When Mr. Jaspret Singh bought his health insurance policy he opted for a combined plan that included his spouse as well. Both Mr. Singh and his wife were in their late 50s when they bought the policy.

Now, last year Mr. Singh had to undergo a major surgery with 2 weeks of hospital stay. The expenses of the entire process came to over 4.5 lakh rupees. Thankfully, Mr. Singh got covered by his insurance plan. However, now he is worried that if any medical emergency crops up with his spouse requiring hospitalization how will he bear the expenses? Because his health policy of INR 5 lakh sum insured is almost exhausted. Seeing him worried, his best friend suggested that he should go for restoration benefit in health insurance wherein your policy sum insured will restore to the initial amount as soon as you raise a claim.

Wondering how it works? Let’s understand –
If Mr. Singh would have opted for the restoration benefit in his health insurance policy, his sum insured of Rs.5 lakhs would have been refilled after his claim of Rs.4.5 lakhs. So, if his wife would have made a claim in the same policy year or if Mr. Singh would have made another claim, the policy would have covered them up to Rs.5 lakhs, not Rs.50,000 which was left after the first claim.

There are some insurers who offer restoration for unlimited times, while others might set a limit. But the fact is, availing restoration benefits under your health insurance plan is always better. This way, you can stay away from all the worries of getting your sum insured exhausted. The only thing you must do is to read the policy terms and conditions well about how to get the restoration facility included in your policy.

Before opting for a Single/Multiple restore benefit once should compare it with premiums of Super topup policy. It is advisable to buy a Super top-up policy instead of restoration if the additional premiums are similar.

Read more on Restoration Benefit in Health Insurance? >>

Check the Restoration Policy

Day care Treatments

For a starter like Kishore, who attempted to buy a health plan after much persuasion from family and friends, the term 'Exclusion of Day Care Treatment' under his health policy meant nothing much. However, the sudden burst of appendicitis one fine day made him realize the importance of a Day Care facility under his health plan. He had to undergo a small operation to get rid of the pain, which incurred him a cost of over INR 60,000. Being a small operation, he was discharged from the hospital within 24 hours of the surgery. Later when he approached his insurer for a reimbursement claim, it was denied. Further queries made it clear that his policy doesn't cover day care facilities. Since his hospital stay was less than 24 hours, his claim was not approved.

Thus, it makes sense to prefer health plans with daycare treatment coverage. You can see the day care treatment list with your insurer to check which treatments are included.

Read more on Day Care Treatments Under Health Insurance >>

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Domiciliary Treatment Expenses

The recent episode of Covid-19 pandemic emphasized on the importance of domiciliary treatment. With thousands of Covid-19 patients seeking hospital beds during the peak of the disease, it became a task for most of the private and public hospitals to make beds available for such patients. This is when the domiciliary treatment came to the rescue.

Also, even in normal circumstances domiciliary treatment helps such patients who seek hospital care at home. But to make sure that the domiciliary treatment doesn't make your pocket empty, you must check that your insurer covers this benefit under your health plan.

No Claim Bonus (NCB)

Insurance companies incentivize policyholders with health insurance no-claim bonuses in return for staying healthy and for raising no claims during a policy tenure. So, if you do not raise any health claims for the entire duration of your insurance policy, you might get 5 to 10 % of hike in sum insured each year with upto a limit of 50 -100% of your Sum Insured (SI). This way you may enhance your SI till it doubles. Isn't it amazing? So, if you have a sum insured of INR 5 lakhs, you can raise it to over INR 10 lakhs by not raising any claims for the next 2-3 years of your policy duration. However, as soon as you raise a claim after availing the bonus, the accumulated bonus will reduce. Nevertheless, No Claim Bonus in health insurance is a useful feature of a health insurance policy.

Read more on What is No Claim Bonus in Health Insurance? >>

Free Health Checkups

Free health check-ups offered under health insurance plans serve as lucrative deals that encourage people to take their health seriously. Sunaina is a fit and active lady in her 30s who is very particular about her health and eating habits and everything related to fitness. She makes it a point to go for regular health check-ups once a year. During one such check up, her doctor suggested that she should go through certain tests to detect a lump in her breast. She did as directed by the doctor and could save herself from a serious illness. She could cure her problem with medication and was advised to get regular check-ups every alternate year to stay secure. Since early detection facilitates early treatment, somehow her free health check-up helped in limiting the effects of a serious illness. She thanked her insurer and continued to follow the regime of regular health check-ups. So, availing health check-ups under your insurance policy is a great way to stay secure about your health issues.

Read more on Preventive Health Care & Checkups >>

Alternative Treatments

The common perception that people have about alternative treatment is that "We won't require that". Most people think that they don't need to include alternative treatment under their health insurance policy as they most certainly won't require that facility. Mr. Hara Nath also thought the same and was not showing any interest in availing the alternative treatment facility under his health plan. But his close friend advised him to get the clause included.

Last year, Mr. Nath felt sick with loss of appetite and stayed drained out all the time. His doctor suggested some medications and said nothing is wrong and he should be fine soon. But the situation didn't change. So, Mr. Nath, on his friend's recommendation, went for alternative treatment at a government certified AYUSH* Hospital. Soon, he felt good but the treatment cost him INR 30,000. Thankfully, his insurance plan covered the treatment and helped him to avoid a hole in his pocket.

Most insurance policies these days allow coverage for AYUSH Treatments. However, the condition is to get the treatment done in an AYUSH facility that is a government certified Hospital.

AYUSH – Ayurveda, Unani, Siddha and Homeopathy medical treatments are collectively known AYUSH

Read more on What is Critical Illness Insurance Cover? >>

Avail Maternity Benefits

Avail Maternity Benefits

Anyone planning to start a family needs to avail maternity benefits. However, advance planning is the right approach so that you can make sure that the waiting period and other features of your insurance plan get sorted by the time you plan your baby.

Now, there are many insurance companies that do not offer health insurance with maternity cover because it costs them hugely. Even if an insurer offers such a benefit, they might levy a hefty premium on the policyholder. Further, some insurers might allow coverage to a portion of the expense and not cover the total expenses.

When Manu, a IT professional, opted for a health plan, she was already engaged and was supposed to get married in a year. So, she opted for maternity health insurance benefits under her health plan. However, getting the best health insurance for maternity at the best rate was not easy. She had to look for many quotations and consider many aspects before finalizing on one policy that allowed her to avail maternity benefits at a reasonable premium.

Avail Maternity Benefits

However, many people who do not look for options end up buying policies with maternity benefits at a hefty premium rate. It is always better to avail this facility if you are planning to start your family soon. But paying exorbitant premiums may not be worthwhile. Hence, look for plans that allow health insurance with maternity benefits at a premium that is within your budget.

In case you already have 2 pregnancies, it is advised to opt out of Maternity benefits, or choose a plan without maternity benefits, as most insurers restrict their maternity coverage to initial two pregnancies.

Read more on Health Insurance with Maternity Cover >>

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Doctor Consultations and OPD Benefits

Doctor Consultations

Paying consultation fees to your doctor every time you visit him/her is obvious. The fee may range from INR 1000 to INR 15000 in most cases. You wish to avail OPD benefits to save this money. However, you must note that many insurers do not offer doctor consultation benefits under health insurance. You will have to look for the ones who allow such coverage if you really want to include that clause. Here again, you must make sure not to pay a hefty premium in lieu of this coverage. Or else you might be paying more insurance premiums as compared to doctor consultation fees every year.

When Shalini was planning to buy her health insurance policy, she wanted to avail the OPD benefits under her policy. However, after much deliberation and research, she realized that not availing this facility was more cost effective than availing the same. So, she dropped the idea.

Hence, in case you are willing to get OPD benefits under your policy, make sure to look for the best deal that suits your budget, and which does not make a hole in your pocket.

Read more on OPD Cover Means in Hospital? >>

Doctor Consultations

Avail Super Top Up Plan

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Jagdish, a trader, bought a health insurance policy recently. He bought a family-floater plan as he wanted to provide coverage to his elderly parents as well. He decided on an amount and gave his nod to the policy terms. However, on his wife's persistence he had to include his kids and spouse too in the policy. The additional members made the sum insured quite less. Now Jagdish is concerned that if a member of his family is hospitalized and uses up the entire sum insured, how will he take care of other members if anyone else falls sick during the same policy tenure?

He shared his concern with his business partner and he suggested Jagdish to go for a Super Top-Up Health plan. The super top-up plans offer supplementary coverage on your existing plan. It is available with a deductible limit and if the claim of the policyholder exceeds the limit, the top-up plan makes the excess payment. Further, the super top-up plans present wider scope of coverage. Some of the advantages of this plan are:

  • Increased sum insured at a reasonable premium rate
  • Provides no capping or co-pay clause
  • Allow insured to avoid heavy out of pocket expenses in case of hefty hospital bills
  • Policy is available at cost-effective rates
  • Suits best for elderly people, etc.

Read more on What is Super Top Up Health Insurance? >>

Conclusion

So, now you know that buying health insurance requires an individual to have a nose to details on various minute features. If you are planning to buy a health plan soon, also consider aspects like;

  • Health insurance exclusions
  • Sum insured in health insurance
  • Benefits and coverage available in default plan and add-on options
  • Network hospitals offered by the insurer for 'cashless facility'

Read more on Do's and Don'ts for Medical Insurance Policy >>

Read more on Important Questions to ask While Buy Health Insurance in India

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Frequently Asked Questions

The expenses related to healthcare are rising exorbitantly, making it difficult for common people to afford good medical facilities. Thus, to have access to good healthcare and to afford hospitalization expenses in case of health emergencies, an individual requires a health insurance policy to protect self and family.

Following are the types of health insurance in India offered by different health insurance companies:

Premium in health insurance is an amount that the policyholder must pay to avail the benefits of a health insurance policy. Coverage is the expense of the policyholder's medical costs that the insured is legally entitled to from the insurer to be paid or reimbursed under your health insurance plan.

Determining how much health insurance you need is difficult. But, having a coverage of over twice your annual income is a must. So, if you are earning INR 10 lakhs per annum, you must consider a health plan with a sum insured of INR 20 lakhs for you and your family.

Cashless health insurance means the cashless claims in your health insurance plan which is nothing but a mode of claim settlement. In this process of settling claims, the policyholder does not have to pay anything to the hospital, for the covered expenses, for treatment that the insured has undergone as the insurer does the settlement of the bills directly.

Certain non-medical expenses that may not be covered in a cashless health insurance claim are Hospital registration desk fees, cost of toiletries, attendant fee, service charges, cost of artificial limbs and spectacles etc.

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The waiting period in health insurance is levied to lower the risk of insurers. Since health insurance functions on the idea of risk sharing, only after the steady collection of premium from the insured can the insurer start paying out claims.

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Room rent capping is the limit set by the insurer on the hospital room rate. The room rent capping can be levied on the entire sum insured or on a specific percentage of sum insured. The capping states the amount of room rent expenses that is paid by the insurer.

In health insurance, co-pay or co-payment is the percentage of the claim amount that the policyholder has to pay from his/her own pocket while raising a claim, while the remaining amount is paid by the insurer.

Co-pay clauses in health plans make the policy comparatively cheaper because it reduces the liability of the insurer. However, they may or may not be good for the insured depending on different situations.

The exclusions in health insurance policies mean that the insurer will not pay for the things excluded from the plan. An insurer cannot cover every aspect of a health insurance. So, depending on your need, you must buy insurance that suits your requirement.

Alcohol and Drugs abuse, War and allied perils, Cosmetic or plastic Surgery unless due to accident, voluntary participation in Unlawful activities, Adventure activities etc is an exclusion not covered under most health insurance policies.

Pre-hospitalization costs are those incurred by an insured person before getting admitted to a hospital for a particular treatment. Post-hospitalization costs are those incurred after the insured gets discharged from the hospital.

Restoration in health insurance policy is the option to reinstate the sum insured of your health plan back to the original amount as soon as it gets exhausted after a claim.

In Restore, you can avail the facility only after you have completely used your basic sum insured. On the other hand, in Recharge, the facility is available even if the claim amount goes beyond the basic sum insured.

The process to claim for day care treatment is same as hospitalization benefit claim. You can either choose a cashless claim or a reimbursement claim. In case of a cashless claim you can inform the insurer in advance and get the treatment done in a network hospital. In case of a reimbursement claim, you can choose to get the procedure done at any hospital and later raise the claim by submitting the medical papers and bills and other relevant papers to the insurer.

* Rs. 245/month is the starting price for a 5 lac health insurance for an 25-year-old male, with no pre-existing diseases.
*! Rs. 334/month is the starting price for a 10 lac health insurance for an 25-year-old male, with no pre-existing diseases.
*@ Rs. 12/day is the starting price for a 5 lac family health insurance for an 25-year-old male and 22-year-old female, with no pre-existing diseases.
*# Rs. 12/day is the starting price for a 5 lac health insurance for an 25-year-old male, with no pre-existing diseases.
*$ Rs. 600/month is the starting price for a 20 lac health insurance for an 25-year-old male, with no pre-existing diseases.
*^ Rs. 12/day is the starting price for a health insurance that covers coronavirus for an 25-year-old male, with no pre-existing diseases.