How Health Insurance Works in India?

Medical inflation is one of the biggest reasons for bankruptcy in India. eople lose their lifelong savings if they are diagnosed with a critical illness or get severely injured in an accident. If you are looking for ways to protect your savings from medical expenses, buying a health insurance policy is your best bet. Let’s know how health insurance works in India.

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      How Does Health Insurance Work in India?

      Health insurance is designed to provide financial assistance to the policyholder in case he/she incurs a covered medical expense. In return, the policyholder is required to pay a premium regularly. The medical expenses are covered up to the sum insured limit, which is the maximum claim amount provided by the insurance company.

      Not every medical expenditure is covered under health insurance.

      Usually, a healthcare insurance policy provides coverage for hospitalization expenses, day care procedures, organ donor expenses, ambulance charges, maternity expenses, AYUSH treatments, etc. However, the scope of coverage is not the same for all mediclaim policies and varies from one policy to another.

      Besides, health insurance plans also come with certain add-on covers that can be added to your policy to increase its coverage. For instance, reduction in PED waiting period, critical illness cover, OPD cover, hospital daily cash, etc. are some of the most common health insurance add-on covers.

      Besides, the premium of all health insurance plans is not the same.

      The premium of a health insurance policy depends on several factors, such as the age of the insured, medical history, city of residence, sum insured, coverage, deductibles, add-on covers, etc. The deductible is the amount that you agree to pay at the time of claim settlement.

      How Does Health Insurance Renewal Work?

      When you buy a health insurance policy, you pay a premium amount. However, this premium is valid only for a fixed time period. Usually, health insurance plans are available on an annual, bi-annual, quarterly or monthly premium payment.

      Once the validity of a health plan expires, the policyholder needs to renew the plan. This is essential because insurance coverage ceases to exist as soon as the policy expires. So, if you want medical coverage at all times, renewing your health insurance policy before its expiry date is non-negotiable.

      To renew your health policy, you need to contact your insurance company and request them to renew your policy. Alternatively, you can also renew your health insurance policy online. Just visit the insurance provider website, select the policy to be renewed, pay the renewal premium and the validity of your policy will get extended.

      How Does Health Insurance Claim Work?

      When you incur a medical expense, you are required to raise a claim to get your insurance company to pay for it. But as soon as your insurer receives your claim, they will first check if the illness/treatment is covered under the ambient of your health insurance policy.

      The medical reimbursement will be available only if your illness/treatment is covered by your policy.

      If your treatment/illness is covered by your policy, the insurer will check the hospital where you are availing the treatment. In the case of a network hospital, you are eligible to avail cashless hospitalization facility and the third party administrator (TPA) will be responsible to settle your hospital bills on behalf of the insurance company. The TPA will go through your medical documents and ensure that you pay the deductibles before they pay the hospital bill.

      Remember… Every health insurance company in India has a network of affiliated hospitals where cashless hospitalization is available.

      But if you are receiving treatment at a non-network hospital, you cannot avail cashless treatment. In such a case, you will have to pay your hospital bill as soon as you get discharged from the hospital. You can raise a claim with your insurance company after getting discharged by submitting the required documents.

      Don’t forget to collect your medical documents from the hospital at the time of discharge.

      When your insurance company will receive your reimbursement claim request, they will go through your documents and check if your policy offers coverage for your illness/treatment. If it does, the claims team will initiate reimbursement of your medical expenses.

      In a Nutshell

      Health insurance is easy to buy and useful to claim. Just make sure that you understand how health insurance works so that you have a hassle-free experience. Also, use insurance broker websites like to find the best health insurance policy within your budget.

      Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

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