In today’s world of an unhealthy lifestyle, junk eating and rising medical costs, health insurance is something which comes as a soothing breeze. But still, there are many people who don’t know much about health insurance. Health insurance offers many other benefits besides covering health issues such as tax saving, better financial planning, etc. There are also various types of health insurance plans available in the market and the best one among them can be chosen based on your requirements.
Let us look at the benefits and types of health insurance available in India.
What is health insurance?
Health insurance covers the health of the insured person from any illness and accident by covering the treatment costs. The insured has to claim the cost incurred by him/her during treatment. There are two types of health insurance claim process i.e., cashless claim and reimbursement claim.
Benefits of Health Insurance
At the present time, when health is going down all around the world due to unhealthy habits, poisonous surroundings, etc., health insurance comes as a sigh of relieve. Besides providing cover from medical costs, health insurance also offers various other benefits such as preventive care, health bonuses, etc. There are various reasons to buy health insurance such as increasing disease rate, savings, etc. and it should be done at an early age.
The various benefits of buying health insurance are:
- Annual health check-ups: Many health insurance plans provide free annual health check-ups for the insured to make sure that they remain in good health. It also enables the diagnosis of any disease, as soon as it begins to affect the insured. The health insurance providers have tie-ups with various hospitals and diagnostic centers, where they refer the insured for annual full body check-up.
- Wellness benefits: Some health plans also offer wellness benefits to the insured if they keep themselves healthy and fit. The insured is rewarded for preventive and wellness habits, the mechanism or incentive for which is determined by the insurer and is mentioned in the policy documents. Smoking cessation, weight loss, stress management, gym/workout rooms, recreational programs such as company-sponsored sports teams, medical screenings, and immunization/flu shots, etc. are some of the benefits offered under the wellness program.
- Tax benefits: Health insurance allows the insured to opt for income tax deduction under section 80C of the Income Tax Act. the maximum deduction allowed for an individual under the age of 60 years is Rs.25,000 while the deduction limit for a senior citizen (60 years or above) is Rs.50,000. It helps in saving your hard-earned money from taxation.
- Cashless hospitalization: Health insurance claims can be made in two modes i.e., cashless claim and reimbursement claim. Under the cashless claim system, most of the treatment cost or the entire treatment cost is paid by the insurer directly to the hospital. Thus, the insured doesn’t have to worry much about paying bills immediately during the treatment and can focus on better treatment.
- Better treatments: A person covered with health insurance can focus and opt for better treatments without worrying about the costs. Insured can go for treatment in a private hospital or a government hospital and get the best treatment. If a hospital comes under the network of the insurer, the insured can go for cashless treatment whereas in case of a non-network hospital the insured can pay for treatment and later get it reimbursed. In both cases, the costs are covered under the insurance plan.
There are various types of health insurance policies divided on the basis of the needs of a different person. You can choose any one health insurance plan from the lot, as per your requirements. We will discuss all the types of health insurance plans available in the Indian market in detail here.
Types of Health Insurance Plans
The most common types of health insurance available in India are:
- Individual health insurance: It is health insurance that covers the medical costs of an individual insured. Under this type of plan, an individual can have the maximum coverage and that too at an affordable premium. Under individual health insurance, separate health policy, with an individual sum insured, is taken for each individual family member. An insured can take individual plans for his/her immediate family members. Parents and in-laws can also be covered on payment of an additional premium. This plan is best suitable for individuals prone to a greater risk of diseases. Individual health plans come with lifetime renewability.
- Family health insurance: Family health insurance or family floater plan covers the entire family under one plan. The sum insured under this plan is divided among all the family members equally. The premium for this type of plan is lower as compared to other plans and depends on the age of the members. The family floater plan covers the policyholder, his/her spouse, and dependent children. There are some insurers who also offer coverage for the dependent siblings, parents, and in-laws. Most family health insurance plans offer lifetime renewability benefit to the insured members.
- Group health insurance: Any insurer can offer group health insurance for a term of 1 year, but in case of credit linked insurance plan the term can be extended upto a loan period of a maximum of 5 years. A group formed specifically for the purpose of availing insurance benefits can not be covered under the Group health insurance plan. A clear relationship should be present between the members of the group and the policyholder, which is specified by the Authority from time to time. The insurer determines the size of the group, subject to a minimum of 7 members, which shall be applicable to all the group policies. Only the groups fulfilling the size condition will be eligible for the Group Insurance policy. Employers also offer group health insurance plans for their employees.
- Maternity health insurance: The maternity health insurance covers the mother-to-be during pregnancy and also the newborn for a certain period. It covers pre and post-hospitalization costs, pre and post natal costs, ambulance charges, etc. The expenses incurred for delivery are also covered under these plans for both normal and cesarian delivery. The vaccination costs for the infant are also covered by some insurers for the first year. Some health plans also offer maternity benefits as an add-on.
- Senior citizen health insurance: Increasing age makes us more prone to diseases and thus to elevating medical expenses. At an age where there is rarely a fixed source of income, health insurance comes as a relief in case of medical emergencies. Senior citizen health insurance offers financial security to those who fall in the rage limit of 60-65 years or above. No pre-medical check-up is required to be done on part of the insured. Many insurers offer lifetime renewability option under this plan. Choose the senior citizen health policy with a minimum waiting period.
- Critical illness health insurance: Critical illnesses have very expensive treatments and can exhaust all the savings. Under these plans, if the insured is diagnosed with a critical illness during the policy term, then the insurer pays a lump sum amount to the insured for treatment. Critical illness plans also offer healing assistance to the insured. Daily allowance benefit is also offered to the insured considering that the insured will not be able to work due to the critical illness. Coverage is offered only for the critical illnesses mentioned in the policy documents. Critical illness health insurance can only be claimed if the insured survives for the 30 days survival period, after the diagnosis of the critical illness.
- Personal accident insurance: Personal accident cover offers financial aid in case of disability or death caused due to accident. This plan also covers the cost incurred on the hospitalization, transportation of the patient and his/her family to the hospital. The repair cost of the vehicle or the residence is also covered by the plan. Personal accident covers are of two types namely, individual accident insurance and group accident insurance. These plans don’t require a medical test or documentation. Personal accident cover is available for individuals as well as for a family. Child education benefits are also offered by this plan.
Increasing health issues and medical costs have made health insurance a necessity and it is always good to be prepared for the unforeseen risks in advance. But before buying any health insurance it is crucial to know everything about it. First map your needs as to what type of insurance you need, what coverage you want, what add-ons should be opted for, etc. Explore and compare various plans as per your needs before making any decision. Once you have found the best health insurance for yourself, go for it and secure your health and future. Be healthy, safe, secure and enjoy your life to the fullest.
If you have any queries or advice regarding health insurance, we will be happy to hear from you in the comments section.
Sangeeta Singh is a career journalist and passionate writer. She has extensively covered changing macros of the financial market. She is crafted with innate skill to deep dive into the ocean of financial market and collects pearls of information to bring to the real world. If not working, she can be found indulged in some good books or music.