A health concern should never put a dent in your savings which is why purchasing one or more types of health insurance policies is important for every individual in India. Medical emergencies can strike at any moment and if you have the best medical policy in India, you can be well prepared to cover all the associated expenses. But with so many forms of health insurance, it can be confusing to pick which ones to purchase which is why understanding each is of utmost importance.
Health insurance policies give you peace of mind as you know you are covered in case of a medical emergency, you do not have to pay out-of-pocket for every health issue, and you save on your income tax. Health insurance products can be classified as follows.
Indemnity health insurance plans enable the policyholder to claim expenses up to a certain limit that has been specified as per the policy. Some examples of indemnity health insurance plans include Mediclaim insurance plans, individual plans, unit-linked health plans, family floater plans, and senior citizen plans. Indemnity health insurance plans reduce out-of-pocket expenses and are helpful as healthcare costs are increasing every day.
Indemnity health insurance policies are types of health insurance plans that provide extensive coverage. They provide for doctor fees, pre-hospitalization expenses, post-hospitalization expenses, ICU charges, medications, in-patient treatment, surgery expenses, and so on. Generally, you can find indemnity health insurance plans are less expensive compared to definite benefit health insurance policies. However, it may require you to pay a portion out-of-pocket because it is subject to deductibles.
Definite benefit plans are those which provide a sum assured in case a particular health-related event occurs. The event may be a result of an ailment or an accident. Some examples of definite benefit plans include maternity plans, critical illness plans, and personal accident plans. These are more expensive than indemnity health insurance plans and their eligibility depends on the conditions of the policyholder.
Definite benefit health insurance plans improve the cash flow because they provide a lump sum payment to the policyholder. These plans have a simpler documentation process and enable the policyholder to recover with ease without worrying about the financial aspect. They also ensure treatment is received in a timely manner thereby improving the chance of healing. They can be seen as enhancements to the standard plans.
The following are all the major types of health insurance in India.
The most basic type of health insurance is individual health insurance. This covers the policyholder, his parents, his spouse, and his children. The policyholder’s medical expenses in case of diseases and injuries are covered in this insurance along with daycare procedures and hospitalization. Premiums are higher in individual health insurance policies. When the policyholder purchases this plan for his family, everyone has an individual sum insured.
Let us say that a person purchases a plan for himself and his spouse for Rs. 5 lakhs sum insured. The policyholder will have Rs. 5 lakhs sum insured and his spouse will also have Rs. 5 lakhs sum insured. Any person who is 18 years and above and a maximum of 70 years can purchase the individual plan to financially secure his family from hospital charges and so on. Even though it is expensive, it is recommended by experts.
One of the most common types of health policies is the critical illness health insurance plan. It provides a sum of money to the policyholder when he is diagnosed with any of the critical illnesses covered under the policy. It is recommended for those people who have a family history of certain diseases as they will benefit the most from such a policy that provides cover for a variety of common diseases.
The critical illness insurance plan provides cover for diseases such as kidney failure, stroke, heart attack, cancer, and pulmonary arterial hypertension. It also covers paralysis, aorta graft surgery, and coronary artery bypass surgery. Note that this insurance plan comes with a lifetime renewability option and the policyholder must stay alive for 30 days after he is diagnosed with the disease. When a claim is filed for this plan, the policyholder receives a lump sum and the policy terminates.
Senior citizens’ health insurance is one of the types of health insurance. It is for people who are older than 60 years. Any individuals who have parents or grandparents who are 60 years or above, should consider getting this health insurance policy. This type of health insurance covers medical costs, hospitalization-related fees (pre, post, and during surgery), and psychiatric problems that are common in older people.
In some cases, an insurance provider will require the elderly person to go through a full body check-up before selling the insurance policy. Generally, this is to diagnose any existing conditions that the person may be unaware of. These plans have higher premiums as older people are more prone to different types of illnesses and related complications. The age limit to get this health insurance is 70 years and it usually comes with a lifetime renewability option.
One of the types of medical insurance is family floater health insurance. It is an affordable plan for the entire family as the premiums are comparatively lower than individual health insurance plans. A person can buy it for his entire family and get cover for his parents, children, and spouse. It offers a single sum insured for every family member and is often a choice for people who live with their parents.
Family floater health insurance plans are much easier to manage as it is an umbrella cover. When purchasing a family floater health insurance plan, it is better to add people who are younger than 60 years because older people are more likely to get sick and suffer from illnesses. If the policyholder adds older people, the premium of the family floater health insurance plan will increase substantially depending on whether both parents are above 60 years.
A group health insurance plan is one of the types of health care policies in India that is applied to a group of people, generally, employees who work together in the same office. Employers buy these types of health insurance to improve employee retention and show them their support. Such plans offer lower premiums and can cover a wide range of medical problems that arise from diseases, mental issues, accidents, and so on.
Group health insurance is valid until the employee or the policyholder works at the company. If he chooses to move on to another organization, the group health insurance does not cover him anymore which means he must purchase a new plan. Group health insurance plans differ from provider to provider as some offer refilling of the sum insured for an unlimited number of times when the original sum insured is exhausted.
One of the different types of health insurance is the maternity health insurance policy. It can be purchased as a standalone policy or can be bought as a rider when the policyholder purchases a health insurance plan. The medical expenses which are incurred during the delivery, the prenatal stage, and the post-natal stage are covered by maternity health insurance. These costs can be quite high when paid out-of-pocket. These plans have a waiting period of about 2 years.
Maternity health insurance policies should be purchased by people who wish to have a baby in the future and those who have been recently married. The maternity health insurance plan also covers when termination of the pregnancy is required due to complications that leave the couple with no other option. It also covers infertility expenses and provides cover for expenses incurred by the newborn baby for up to 90 days after being born.
Top-up health insurance is among the many types of health insurance and it is used to get broader cover on top of the insured person’s existing basic health insurance plan. It provides a higher sum insured and therefore more protection when the expenses touch the roof. Once the claim limit is reached by the policyholder, the insurer pays the remaining amount. Policyholders can opt for a super top-up health insurance plan which promises a higher sum insured.
The top-up health insurance plan always has a deductible clause and when the claim is made, the payment is made over the limit specified in the insurance plan. For example, if a person named Amrit has taken a health insurance plan of Rs. 20 lakhs and a deductible of Rs. 5 lakhs, then Amrit will need to pay Rs. 5 lakhs and the insurer will pay the remaining amount after that as per the top-up health insurance plan.
Mediclaim insurance is one of the types of health policies in India. It is available as an individual medical insurance plan, group Mediclaim, overseas medical insurance, family floater Mediclaim, and so on. It covers the medical expenses of the policyholder when he is being treated for a medical condition. The insured person can opt for a cashless treatment option under this plan for direct medical bill settlement.
Another option is to submit all the medical bills incurred for treatment to the insurer. Before you do this, you must pay for all the expenses out-of-pocket and then send the bills to the insurer for settlement. Mediclaim covers the hospitalization-related costs of the policyholder. The hospitalization may have been due to critical illness, surgery, or an accident. It covers the in-patient costs such as doctor’s fees, anaesthesia, and nursing charges among others.
A disease-specific health insurance plan is used to cover expenses incurred due to a specific ailment. It is provided by select insurance providers in India at present and it is among the many types of health insurance plans. Someone prone to a specific type of disease can get this type of health insurance plan as it will ensure financial protection if the policyholder gets diagnosed with that type of disease.
Disease-specific health insurance policies have age limits and it is wise to get it as soon as possible. The older the person gets, the more expensive the premiums become as they are more likely to get a particular disease especially if the person has a family history of that disease. A person who has turned 18 years old can purchase this health insurance plan and the age limit is often up to 65 years. It is often more expensive than other forms of health insurance.
The personal accident health insurance plan is provided by the top 5 health insurance companies. This plan provides cover in case the policyholder becomes partially disabled or permanently disabled because of an accident. The plan also covers death that can occur as a result of an accident. The personal accident plan can offer the policyholder compensation when he becomes partially or totally disabled. In the case of death, a lump sum is provided to the nominee.
Personal accident health insurance can also reimburse the hospitalization expenses incurred due to the accident. The insured individual receives a daily allowance whereby he is paid a certain amount every single day that he is hospitalized. This enables him to cover a myriad of expenses like transport, food, and others. It is one of the most important types of health insurance policies because it saves the family from financial problems in case the breadwinner suffers from an accident.
A unit-linked insurance plan (ULIP) is among the types of health insurance in India. They have dual benefits as they provide cover in the form of financial protection and act as investment tools too. When the policyholder regularly pays the premium; two things happen. A portion of the premium is used for covering the insured in case of a medical emergency. The other part of the premium is invested in debt and equity. This ensures the policyholder can build wealth over time.
The benefit of choosing a ULIP is that you can choose the type of insurance cover you want. You can also pick the type of investment you wish to perform. You can choose to depend on your goals such as funding your children’s education, planning for your retirement, and so on. As you can withdraw a portion of the invested money, you have peace of mind in case you need extra money in the future. You can also benefit from tax benefits under various sections of the Income Tax Act, 1961.
Every individual has a unique set of requirements which is why selecting the right types of health insurance policy should be well-researched and thought out. When determining which types of health insurance to choose, you need to look at the sum insured, deductibles, waiting period, and claim settlement process. You must also determine the age of your family members, their medical history, exclusions from the policy, renewability options, and network hospitals. A health insurance policy is necessary in these uncertain times.
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