What is Health Insurance?
The term health insurance is a type of insurance that covers your medical expenses. A health insurance policy is a contract between an insurer and an individual /group in which the insurer agrees to provide specified health insurance cover at a particular “premium”.
Is Health Insurance the same as Life Insurance?
No. Life Insurance protects your family (or dependents) from financial loss that may arise in the event of your untimely death/or if something happens to you. The payout is made only post the death of the person insured or at the maturity of the policy. Health Insurance protects you against ill health/diseases by covering the expenses you might incur (for treatment, diagnosis etc.) in case you are affected by disease or injury. There is no payout made at maturity. Health insurance also needs to be renewed annually.
My employer provides me with health insurance coverage. Is it advisable to take another policy on my own?
It is strongly advised to have health insurance on your own as well because of reasons of continuity. Firstly, if you change your job, you might not necessarily get health insurance from your new employer. In any case you will be exposed to health costs in the transition period between jobs. Secondly, the track record that you have built in health insurance at your old employer will not transfer to the new company policy. Covering pre existing diseases might be a problem. In most policies pre-existing diseases are covered only from the 5th year onwards. Therefore, to avoid the above problems, it is advisable to take a private policy in addition to your company provided group health insurance policy.
Are Maternity/Pregnancy related expenses covered under Health Insurance plans?
A.#1: What is covered under maternity benefit in India
The definition of maternity expense is a part of the IRDAI’s Circular on Standardised Definitions issued in 2013, so all insurers need to follow this uniform definition. It essentially includes any hospitalisation traceable to child birth, and also includes medical termination of pregnancy and pre/post-natal expenses. Maternity expense includes the following expenses:
- Maternity related hospitalisation – pre-hospitalisation expenses are covered up to 30 days prior to delivery and will also cover post-hospitalisation expenses up to 60 days
- Delivery including Pre and post-natal expenses – Maternity insurance covers expenditure related to both caesarian and normal delivery, as well as post-delivery complications for the mother
- Hospitalisation costs- This usually includes room charges, nurse and surgeon charges, anaesthetist consultation charges, medical practitioner fees, and emergency ambulance charges.
- New Born Baby cover (Day 1-90) – Coverage is also extended to infants in case they are diagnosed with a congenital disorder or some critical illness.
#2: What is the waiting period and what are the sub-limits?
There is a waiting period of anywhere between 2 to 4 years before one is eligible to claim a maternity related claim, with some policies extending this up to 6 years,though this of course varies across insurers. Thus, it is essential to buy maternity cover as early as possible, even if you have no plans of having a baby anytime soon. The only notable exception to plans with such long waiting periods is Religare Health Insurance’s specialised maternity product JOY in which the waiting period is just 9 months. To know more about such plans, check out Features of New Age Health Insurance Plans.
There are specific exclusions applicable to the maternity benefit and some are reproduced below:
- Benefit limit for maternity and new born baby related claim is capped between Rs. 15,000-30,000 for normal deliveries and between Rs. 25,000 – Rs. 50,000 for caesarian births. It may seem insufficient considering maternity costs in A-rated hospitals in metros but can help in reducing the burden of these expenses.
- Age of insured for claiming maternity benefit cover is capped at 45 years.
- Termination of pregnancy within 12 weeks from the date of conception is not covered by the policy.
- Medical expenses on ectopic pregnancy are not covered under this benefit.
The major downside to these policies is the high premium. However, the reason these premiums are higher than that of a regular health insurance policy where there’s a high possibility you may not need the cover, maternity insurance covers an almost certain event, and can greatly help lessen its financial impact. For example, Religare’s Joy Rs. 5 lakh cover for an 18-35-year-old woman would be Rs. 27,039 per annum. However, Joy has a waiting period of just 9 months, which so far is the shortest in the industry! Hence, it is important to do a cost-benefit analysis of these plans before picking the one you want.
Related: 7 Women-specific health conditions that your insurance needs to cover
#5: Tips on buying a policy and planning this expense:
- Do not make maternity cover the sole criteria you consider when purchasing a health insurance policy.
- In case your employer provided plan covers maternity expenses, claim from that policy without touching your own policy. This will also allow you to preserve the no-claim bonus.
- Additionally, if the cost you have incurred exceeds the cover offered by your employer’s policy, you can claim the balance through your individual health policy
- Work at creating your own maternity fund which can be parked in a fixed deposit or liquid mutual fund.
- The insurer will not cover you in such policies if you’re already pregnant and also waiting periods shall apply. Hence, it is important to time the purchase properly
A steep rise in maternity expenses over the years is forcing couples to look for options to fund this expense and hence insurers highlight the maternity benefit feature in their health insurance policies. The couple purchasing these policies should fully understand the scope, exclusions and pricing of these policies and also create a separate medical fund to meet this requirement.
Is there any tax benefit that one can avail of while purchasing Health Insurance?
Deduction on Section 80D in Income Tax Act (Tax deduction based on Health Insurance Premiums Paid)
- Deduction on Section 80D in Income Tax Act (Tax deduction based on Health Insurance Premiums Paid). You are allowed to claim a deduction up to Rupee. 25,000 per budgetary year for medical insurance premium instalments. The premium should be for you, your spouse, and dependent children. On the other hand, if there is a chance that either you or your spouse is a senior citizen (60 years or above), the limit goes up to Rupee. 30,000.
- Deduction on Preventive Healthcare Check-ups
You get tax reduction on preventive health check-ups annually. Inside the aforementioned limit of Rupee. 25,000 (or Rupee. 30,000 all things considered) under Section 80D income tax, you can also claim expenses incurred for preventive health check-ups up to Rupee. 5,000 for each budgetary year.
My wife and children are residing at Mysore while I am here in Bangalore. Can I cover all of us in one policy?
Yes, you can cover the entire family under one policy. Your health insurance policy is in force across India. You must check whether there is any network hospital near to your as well as your family’s place of residence. You must check if your insurer has a network hospital close to you or where the rest of your family resides. Network Hospitals are the hospitals that have tied up with the TPA(Third Party Administrator) for cashless settlement for expenses incurred there.If there are no network hospitals at the place of your residence, you could opt for reimbursement mode of settlement.
Which are the network hospitals in your vicinity?
To avail a cashless settlement of your claim, you should be admitted in a network hospital. A company has a list of such hospitals and you need to find out whether the hospital in the company’s network is your preferred choice of hospital and/or located in your area.This is a one of the most important health insurance questions to be considered because medical emergencies may arise anywhere. Usually, health plans cover treatments anywhere in India but you should make sure of this clause. Find out whether the claim settlement in your policy has any geographical limitations or not. There are some medical insurance plans that offer international coverage too.
Are naturopathy and homeopathy treatments covered under a health policy?
The coverage of alternative medicines is dependent on the particular insurer. Some health insurers cover only Ayurvedic treatments while some cover all of them. There is also a cap on the amount covered which usually ranges from 7.5% to 25% of Sum Assured.
Ayurveda has many treatments which are for rejuvenation of the body which are not covered by the health insurer to avoid any misuse by the insured. The Ayurvedic treatments covered by health insurer are dependent on the health insurer.
Health Insurance Covering Ayurvedic Health Care
Chola MS Advanced Individual Healthline plan covers Ayurvedic therapy treatments up to 7.5% of Sum Insurer and also has 20% co-payment clause.
Star Health Medi Classic plan covers non-allopathic treatment up to 25% of Sum Insured subject to maximum of INR 25,000 per policy period.
Apollo Munich Insure health plan covers alternate medicines under Ayush benefit which includes Ayurveda, Unani, Sidha and homeopathy for amount up to 10% of Sum Insured.
HDFC Ergo Health Suraksha plan also covers Ayush benefits up to 20% of Sum Assured.
Though traditional medicines are being covered by the new health insurance plans, there are still few exclusions. One should verify the treatments covered before buying a particular health insurance policy
Can I buy more that one Health Insurance policy?
Yes, you can have more than one Health Insurance policy. In case of a claim, each company will pay rateable proportion of the loss. For example, a customer has Health Insurance from Insurer A for a coverage of Rs. 1 lakh and Health Insurance from Insurer B for a coverage of Rs. 1 lakh. In case of a claim of Rs. 1.5 lakh each policy will pay in the ratio of 50:50 up to the sum assured.
What is the difference between Health Insurance & Critical Illness policies ?
Health Insurance policy is a reimbursement of the medical expenses.Critical illness insurance is a benefit policy. Under a benefit policy upon the occurrence of an event, the insurance company pays the policyholder a lump sum amount. Under a Critical Illness policy, if the insured is diagnosed with any critical illness as specified in the policy.The insurance company will pay the policyholder a lump sum. Whether the client spends the amount received on the medical treatment or not depends on the client’s own discretion
What are the forms of Health Insurance available?
The commonest form of health insurance policies in India cover the expenses incurred on Hospitalization, though a variety of products are now available which offer a range of health covers, depending on the need and choice of the insured. The health insurer usually provides either direct payment to hospital (cashless facility) or reimburses the expenses associated with illnesses and injuries or disburses a fixed benefit on occurrence of an illness. The type and amount of health care costs that will be covered by the health plan are specified in advance.
Why is Health Insurance important?
All of us should buy health insurance and for all members of our family, according to our needs. Buying health insurance protects us from the sudden, unexpected costs of hospitalization (or other covered health events, like critical illnesses) which would otherwise make a major dent into household savings or even lead to indebtedness.Each of us is exposed to various health hazards and a medical emergency can strike anyone of us without any prior warning. Healthcare is increasingly expensive, with technological advances, new procedures and more effective medicines that have also driven up the costs of healthcare. While these high treatment expenses may be beyond the reach of many, taking the security of health insurance is much more affordable.
What kinds of Health Insurance plans are available?
Health insurance policies are available from a sum insured of Rs 5000 in micro-insurance policies to even a sum insured of Rs 50 lakhs or more in certain critical illness plans. Most insurers offer policies between 1 lakh to 5 lakh sum insured. As the room rents and other expenses payable by insurers are increasingly being linked to the sum insured opted for, it is advisable to take adequate cover from an early age, particularly because it may not be easy to increase the sum insured after a claim occurs. Also, while most non-life insurance companies offer health insurance policies for a duration of one year, there are policies that are issued for two, three, four and five years duration also. Life insurance companies have plans which could extend even longer in the duration. A Hospitalization policy covers, fully or partly, the actual cost of the treatment for hospital admissions during the policy period. This is a wider form of coverage applicable for various hospitalization expenses, including expenses before and after hospitalization for some specified period. Such policies may be available on individual sum insured basis, or on a family floater basis where the sum insured is shared across the family members. Another type of product, the Hospital Daily Cash Benefit policy, provides a fixed daily sum insured for each day of hospitalization. There may also be coverage for a higher daily benefit in case of ICU admissions or for specified illnesses or injuries.
A Critical Illness benefit policy provides a fixed lumpsum amount to the insured in case of diagnosis of a specified illness or on undergoing a specified procedure. This amount is helpful in mitigating various direct and indirect financial consequences of a critical illness. Usually, once this lump sum is paid, the plan ceases to remain in force.There are also other types of products, which offer lumpsum payment on undergoing a specified surgery (Surgical Cash Benefit), and others catering to the needs of specified target audience like senior citizens.
What is cashless facility?
Insurance companies have tie-up arrangements with several hospitals all over the country as part of their network. Under a health insurance policy offering cashless facility, a policyholder can take treatment in any of the network hospitals without having to pay the hospital bills as the payment is made to the hospital directly by the Third Party Administrator, on behalf of the insurance company. However, expenses beyond the limits or sub-limits allowed by the insurance policy or expenses not covered under the policy have to be settled by you directly with the hospital. Cashless facility, however, is not available if you take treatment in a hospital that is not in the network.
What are the factors that affect Health Insurance premium?
Age is a major factor that determines the premium, the older you are the premium cost will be higher because you are more prone to illnesses. Previous medical history is another major factor that determines the premium. If no prior medical history exists, premium will automatically be lower. Claim free years can also be a factor in determining the cost of the premium as it might benefit you with certain percentage of discount. This will automatically help you reduce your premium.
What does a Health Insurance policy not cover?
You must read the prospectus/ policy and understand what is not covered under it. Generally, pre-existing diseases (read the policy to understand what a pre-existing disease is defined as) are excluded under a Health Insurance policy. Further, the policy would generally exclude certain diseases from the first year of coverage and also impose a waiting period. There would also be certain standard exclusions such as cost of spectacles, contact lenses and hearing aids not being covered, dental treatment/surgery ( unless requiring hospitalization) not being covered, convalescence, general debility, congenital external defects, venereal disease, intentional self-injury, use of intoxicating drugs/alcohol, AIDS, expenses for diagnosis, x-ray or laboratory tests not consistent with the disease requiring hospitalization, treatment relating to pregnancy or child birth including cesarean section, Naturopathy treatment.
Is there any Waiting Period for claims under a policy?
Yes. When you get a new policy, generally, there will be a 30 days waiting period starting from the policy inception date, during which period any hospitalization charges will not be payable by the insurance companies. However, this is not applicable to any emergency hospitalization occurring due to an accident. This waiting period will not be applicable for subsequent policies under renewal.
What is pre-existing condition in health insurance policy?
It is a medical condition/disease that existed before you obtained health insurance policy, and it is significant, because the insurance companies do not cover such pre-existing conditions, within 48 months of prior to the 1st policy. It means, pre-existing conditions can be considered for payment after completion of 48 months of continuous insurance cover.
If my policy is not renewed in time before expiry date, will I be denied for renewal?
The policy will be renewable provided you pay the premium within 15 days (called as Grace Period) of expiry date. However, coverage would not be available for the period for which no premium is received by the insurance company. The policy will lapse if the premium is not paid within the grace period.
Can I transfer my policy from one insurance company to another without losing the renewal benefits?
Yes. The Insurance Regulatory and Development Authority (IRDA) has issued a circular making it effective from 1st October, 2011, which directs the insurance companies to allow portability from one insurance company to another and from one plan to another, without making the insured to lose the renewal credits for pre-existing conditions, enjoyed in the previous policy. However, this credit will be limited to the Sum Insured (including Bonus) under previous policy. For details, you may check with the insurance company.
What happens to the policy coverage after a claim is filed?
After a claim is filed and settled, the policy coverage is reduced by the amount that has been paid out on settlement. For Example: In January you start a policy with a coverage of Rs 5 Lakh for the year. In April, you make a claim of Rs 2 lakh. The coverage available to you for the May to December will be the balance of Rs.3 lakh.
What is ‘Any one illness’?
‘Any one illness’ would mean the continuous period of illness, including relapse within a certain number of days as specified in the policy. Usually this is 45 days.
What is the maximum number of claims allowed over a year?
Any number of claims is allowed during the policy period unless there is a specific cap prescribed in any policy. However the sum insured is the maximum limit under the policy.
What is “health check” facility?
Some health insurance policies pay for specified expenses towards general health check up once in a few years. Normally this is available once in four years.
What do you mean by Family Floater Policy?
Family Floater is one single policy that takes care of the hospitalization expenses of your entire family. The policy has one single sum insured, which can be utilised by any/all insured persons in any proportion or amount subject to maximum of overall limit of the policy sum insured. Quite often Family floater plans are better than buying separate individual policies. Family Floater plans takes care of all the medical expenses during sudden illness, surgeries and accidents.
Will I get covered for my pre-existing illnesses?
Every insurer excludes coverage on the pre-existing illnesses for certain tenure at the starting of the policy. You need to find out what this waiting period for your pre-existing illness is and how soon can you be covered for your pre-existing illnesses. Basically, you need to understand whether your pre exiting condition is temporarily not covered or is it completely excluded from the scope of coverage.
Whom do I call at the time of an emergency hospitalization?
An emergency situation involves a lot of stress and you don’t need the additional burden of finding out the claim settlement process. If your policy facilitates cashless settlement of claims, find out the policy of emergency hospitalization. Ask about the documentation and, most importantly, whom to contact at the time of such emergency hospitalization. Good brokers have a customer service desk or a specifically appointed representative who would help at the time of claim.
What to do if I am admitted in a non-network hospital?
In an emergency situation, you might be admitted in a non-network hospital and knowing the claim protocol at that time is imperative. Always remember that treatment in a non-network hospital would be on a reimbursement basis only where you would have to shoulder the medical bills and then get them reimbursed from your insurer. So find out the reimbursement process, the documents required in this case, and the deadline for informing the insurance company, etc. for this situation.
What are the documents required for claiming?
This is one of the most common health insurance queries, and knowing the answer from the get-go makes the claims process much smoother. Essentially the company asks for the identity proof of the members covered, the health card, the hospital bills, etc. at the time of a claim. A pre-authorization form is required in case of cashless claims which are to be submitted to the TPA. Other documents might also be required and you should have the knowledge of the required documents so that you can get your claim processed smoothly.
What is the method of claim processing followed by the company?
The claim settlement process is the true test of your health plan. You should ask about the company’s claim settlement process to assess whether the process is simple or ambiguous. Moreover, take special care to notice whether the company settles the claims through cashless facility or by reimbursement. A cashless facility is your best bet to avoid any financial burden of medical bills.