What is health insurance?
Health insurance is a type of an insurance which covers the whole or a part of the risk of a person incurring medical and surgical expenses. Depending on the type of health insurance coverage, either the insured pays costs from his/her hard-earned money and is then reimbursed, or the insurer makes payments directly to the provider. Thus getting health insured would be a financial aid during the medical emergency.
It is important for everyone to get health insurance as it would be of great financial help during the emergency time of medical and surgical expenses. Health Insurance policy is a agreement between an insurance provider (e.g. an insurance company or a government) and an individual or his/her sponsor (e.g. an employer or a community organization). This contract can be renewable (e.g. annually, monthly) or lifelong in the case of private insurance, or be mandatory for all citizens in the case of national plans.
The best medical insurance plan is that which meets your needs. You should always consider key factors for deciding which medical insurance plan is the best and fits your requirements. A variety of benefits can be gained by the holders of health insurance policies, including hospitalization charges, ambulance expenses, and room rent, etc. The total coverage sum provided by varied health insurance policies tend to vary from company to company.
In the present times the health insurance industry is evolving a lot. In order to keep up with the changing requirements of customers, insurance companies have come up with innovative products to meet their requirements. Buying a health insurance policy in India is a tricky affair especially within the range of choices available in the Indian market. Various factors such as premium charges, benefits offered and types of diseases covered etc are taken into consideration.
Why to buy a Health Insurance Plan and what are the factors to check before buying?
1. Waiting period: In most situations, health insurance policies have a waiting period ranging from 30 to 90 days, during which one cannot make any claims even if there is a medical emergency. But, Individuals above 60 years have a longer waiting period in some cases. Hence buying a health insurance policy at a young age is always desirable because the waiting period is waived off. Always, check the amount of time taken to cover pre-existing diseases in your plan because pre-existing diseases aren’t covered from day one of buying the policy.
2. Lifelong renewal: You can opt for lifetime renewal of your health insurance plan and thereby, avail of extended coverage throughout. The duration of coverage is the most key factor in buying a health insurance policy. Therefore you can enjoy healthcare benefits for your entire life by opting for renewal of your policy. Always go for a plan that can be renewed for longer duration.
3. Tax benefit: Buying a health insurance policy will allow you to enjoy tax benefits. In this benefit one can claim the premium paid as the deduction from their total income regulated by 80D of the Income Tax Act, 1961.
4. Co-pay: Co-pay is a fixed percent of the hospital bill you will have to pay when you make a claim, while the balance will be paid by the insurance company. Buying a health insurance policy not only gives you greater coverage but also helps you plan your finances in a better way.
5. Wider options: There a wider range of health insurance plans offered. Many latest health plans offer wide coverage among others for diseases. In short, your coverage costs will only increase as you grow older owing to more medical complications. Hence pick the one which is suitable which has the benefit of comprehensive and holistic coverage.
6. Bonus: Most insurance companies offer a ‘No Claim Bonus’ in the absence of any claims in the preceding year of a policy term. If you buy a health insurance policy, you can avail cumulative bonus as you would likely to renew your policy every year. As a result, the bonus accumulated increases your coverage amount which will prove to be an advantage at later stages of life when you are old. No claims bonus may range from 5% to 100% of sum insured in most cases.
7. Financial planning: Buying a health insurance policy not only gives you greater coverage but also helps you plan your finances in a better way. When you have adequate medical cover to take care of any health emergencies, you can focus on making other long-term investments.
What are the types of Health Insurance Plans?
- Hospitalization Plans/Indemnity Plans: The word ‘indemnity’ means compensation for losses or damages. Indemnity health insurance policy compensates the policy holder and makes them to come back to their original financial position as there were before. Hospitalization Plans compensate the policyholder by reimbursing the actual hospitalization costs incurred by him subject to a maximum of the chosen Sum Assured.
- Hospital Daily Cash Benefit Plans: The daily cash benefit plan is a defined benefit policy. As known from the name, the policy pays out a defined sum of money for every day of hospitalization regardless of actual costs.
Critical Illness Plans: These are benefit-based health insurance plans which pay a lump-sum amount on recognition of predefined critical illnesses and medical diagnosis. By nature, critical illnesses are highly severe and cost of treatment is higher compared to regular medical problems.
- Individual Health Insurance: This is the simplest form of health insurance. As the name suggests, Individual health Insurance is believed by many to be the best option. The premium amount is as per the size of the policy cover. It covers hospitalization and surgical expenses till the cover limit is reached. If there is a large limit, higher premium should be paid. This plan ensures an individual against illnesses and medical costs. In this type of health insurance plan, you can buy independent healthcare policies for each member of your family.
- Family Floater policy: These are the improved forms of healthcare policy. This policy is suitably adapted to ensure the health of whole family members in one policy. Through family floater health insurance plan, you can avail maximum benefit for money spent because it gives a single insurance cover for your entire family. Unlike, Individual health insurance it covers the entire family so that anybody in your family can claim in case of hospitalization or surgical costs. The premium amount paid, in case of a family floater policy, is generally lower compared to individual health insurance for each family member and hence it is cheaper.
- Unit Linked Health Plans: Medical Insurance plans through ULIP route are yet another form of health insurance which is a combination of investment and insurance. Many health insurance companies have started Unit Linked Health Plans. Returns in such ULIPs definitely depend on stock market performance. In India, such plans are still considered as new and are still in development phase. Only financial experts who understand equity market movements can handle these market linked products like ULIP. All the returns you earn through this plan will be paid to you at the end of the policy term.
As they say, “Health is wealth” Choosing the right policy is always the key to a secure future for you and your family.
Top 5 Best Health Insurance Plans 2018 in India
Ranking Source: policybazaar.com
Sum Assured (Rs)
Apollo Munich Health Insurance
Optima Restore Family
5 years to 65 years
3lacs, 5lacs, 10lacs, 15lacs, 20lacs, 25lacs, 50lacs
Bharti AXA Health Insurance
Smart Health Plan & Smart Super Health Plan
Minimum 18 years. For children it is 91 days ( if both the parents are insured)
5 Lakhs in smart health plan. Extended to 2 cr. in smart super health plan
20 critical illnesses covered
Double the sum insured for critical illnesses
Restoration & maternity benefits in super health plan
Cigna TTK Health Insurance
Pro Health Insurance Plus
91 days for children & 18 years for adults
Rs. 4.5 Lakhs to Rs. 10 Lakhs
Critical Illness cover
New born baby cover
HDFC ERGO Health Insurance
Health Suraksha Plan
No minimum entry age. Maximum up to 80 and above
Rs 300000, Rs 400000, Rs 500000, Rs 750000 and Rs 100000
Individual & family floater
Comprehensive plan with Regain and ECB features.
Iffco Tokio Health Insurance
Swasthya Kavach (Wider)
18 to 60 years for the proposer.
Rs. 2 to 5 Lakhs
Up to 80 years of age
Optional critical illness extension
Value added services
Coverage to family members as well
Max Bupa Health Insurance
Heartbeat Plan ( Gold, Platinum & Silver)
No age limit
Rs. 5 Lakhs to 1 crore
Comprehensive Care Plan
Minimum 91 days and there is no bar on maximum age
Rs. 3 Lakhs to 6 crore
Emergency ambulance cover
Organ donor cover
Royal Sundaram Health Insurance
Anyone above 18 years of age
Rs. 5 Lakhs to 50 Lakhs
AYUSH treatment cover
Emergency domestic evacuation cover
Star Health Insurance
3 months to 65 years
Rs. 5lacs to 25lacs
Personal accident cover
Maternity Cover (normal & caesarean)
Air ambulance assistance
Universal Sompo Health Insurance
Individual Health Insurance
Up to 55 years
Up to Rs. 5 Lakhs
Add-on critical illness cover