What is Health Insurance? A Complete Guide

One thing that we all have learned during the COVID-19 pandemic is the relevance and importance of health insurance in 2020. You would already know that health insurance plans keep you financially protected and help you meet the expensive cost of healthcare services. And if you want to more about health insurance in India firstly you would need to understand how it works.

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      When you buy health insurance you have to pay a fixed premium amount against the annual coverage that you get. The health insurance company will pay for your medical expenses up to the maximum coverage i.e. the sum insured that you have opted for.

      For example, if you have opted for a health insurance cover of Rs 10 lakh and you got admitted to the hospital and have to pay a bill of Rs 5 lakh, then the insurer will pay the bills. However, your coverage amount for the year will be reduced to Rs 5 lakh as you have already used half of the sum insured.

      If you want to know more about health insurance in India you can check out this complete guide on health insurance:  

      Why do we Need Health Insurance Policies?

      We need health insurance to improve the healthcare standards in our country, to reduce the out-of-pocket expenditures of the people so that everyone can avail of the right healthcare services at the right time.

      Did you know?

      • In 2020, almost 500 million people were covered under health insurance across India. Most of them were covered under government health insurance schemes, and only a few percentage of people had individual health insurance plans.
      • As per the World Bank data about 62.67% of Indians pay for health expenditures from their pocket
      • Insufficient allocation of healthcare funds has pushed a lot of people below the poverty

      Looking at these numbers the situation is quite dire especially with the ongoing pandemic. Therefore the need for affordable health insurance plans rises even more.

      Understand how you can benefit from Health Insurance?

      We all want to know the benefits of insurance in our lives. The main purpose of having health insurance is to help you pay for hospitalization expenses and high medical bills. Check out the scope of health insurance in points below:

      • Coverage against Hospitalization Expenses- The policy covers daycare procedures, hospitalization expenses, ambulance charges, domiciliary expenses, among others. With this, you can focus on your speedy recovery instead of worrying about treatment costs
      • Coverage against Critical Illnesses- Health Insurance providers now offer critical illness cover as a rider benefit or as a standalone plan. Critical illness plans are useful in treating serious illnesses like kidney failure, cancer, bone marrow transplant, among others
      • Accidental Hospitalization- The cost incurred while seeking treatment after accidental hospitalization is covered under health insurance plans
      • Coronavirus Treatment Cover- The cost related to COVID hospitalization and any consumable expenses like the cost of PPE kits, ventilators, oximeters, gloves, masks, etc. is covered
      • Tax Benefits- The premium that you pay for health insurance is eligible for tax-benefits u/s 80 D of the Income-tax Act and the limit is up to Rs 1, 00,000

      Types of Health Insurance Plans in India

      • Individual Health Insurance Plans - There are different types of health insurance for individuals that cover different types of diseases. The sum insured is available on a standalone basis and therefore the coverage provided is higher.
      • Family Health Insurance - A family of 3 or 4 people can easily get insured under a family health insurance plan. The coverage provided is the same as individual medical plans but the insurance amount is on a floater basis.
      • Coronavirus Health Insurance - The one in popularity is COVID-19 health insurance that helps you pay for the treatment of a global disease whose treatment is not established yet. The cost of the treatment can shoot in lakhs, thus insurance is important.
      • Critical illness Insurance - Cancer, TB, tumors, organ failure, and kidney transplants are common these days. The cost of such treatments can be very high; therefore, it is important to have critical illness cover that can help you pay for such expensive treatments without any financial stress.
      • Top-up Health Insurance Plans - A lot of people buy top-up health plans over and above their basic health plans as it provides buffer coverage over and above the existing policy.
      • Critical Illness Plans for Women in India- There are quite a few women health insurance plans that cover women-specific critical illnesses and cancers. Read more about women-specific health plan here
      • Maternity Health Insurance- There are a few health plans that cover maternity expenses after the waiting period is over. But you can buy maternity-specific health plans that pay the expenses with a minimal waiting period of 9-months only.

      Health Insurance for Cancer Patients in India- What are the Options?

      The number of cancer cases in India is estimated to be 13.9 lakh in 2020 and the cases are likely to increase to 15.7 lakh by 2025.

      The prevalence is marginally higher among women, as per the report. Looking at these numbers it becomes important to secure yourself and your loved ones from this deadly disease by getting the right treatment at the right time and avoid any financial crisis.

      If you want to buy cancer insurance cover then you can find out the best health insurance plans for cancer patients here

      Waiting Period in Health Insurance

      Most people get confused with the waiting period clause. So, when you buy the insurance you can only avail of certain policy benefits after completion of the waiting period. For example, many health insurance plans have a waiting period of 2 to 4 years. Once the waiting period is over you can get coverage for pre-existing health conditions.

      For example, if you have a pre-existing medical condition like diabetes or high blood pressure, you can only file a claim for treatment cost if you continued the policy for 3-4 years.  However, there are now health insurance plans that provide pre-existing disease cover from Day 1, without any waiting period clause. Check out the plans here

      Co-Payment in Insurance

      So, when you are trying to understand health insurance better, one of the most common things that people get confused with is the co-payment clause. There are co-pay clauses in a lot of health insurance plans where the insurer only pays a certain percentage of the hospital bill, and you settle the rest of the bill.

      Simply put, with a co-pay clause you share a percentage of healthcare expenses with your health insurance provider. The premium of these policies is usually on the lower side. Do not just fall for the lower premiums as the cost that you need to bear at the time of treatment can be quite exhaustive. So, opt for it or buy a plan with co-pay if you can pay it else just get a normal health insurance plan with no co-payment clause.

      Health Insurance Portability - Things to Know

      At any point, if you feel dissatisfied with your health insurance policy or the services offered by your insurer then you can definitely port to another insurer. The Insurance Regulatory and Development Authority of India (IRDAI) came up with the concept of Health Insurance Portability to ensure that the common people are not taken for a ride by health insurance companies.

      For smooth portability of your health insurance plan, you need to communicate with your insurance provider at least 45 days before your next renewal is due. Otherwise, the health insurance company can reject your portability application.

      Right Way to Purchase Health Insurance Online

      Flipping through different health plans and looking for the correct way then all you can do is thoroughly understand the different types of health insurance plans, what do they offer, and what are the terms that you need to understand. If you have selected a health insurance plan online, and you don’t go through the details then it might not be the best fit for you.

      So, to ensure that you buy the right kind of policy you need to invest some time in it. Health insurance is one of the most important purchases that you will make and you must browse through different options. Alternatively, you can get in touch with our health insurance experts at Policybazaar.com and discuss your health insurance needs and requirements.

      Our team will then be able to recommend you a health insurance plan that matches your insurance needs. Remember the health insurance details mentioned in this post will make it easier for you to discuss your requirements with us.

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

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      *We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881. Product information is authentic and solely based on the information received from the Insurer. Policybazaar is acting only as a facilitator and claims settlement shall be at the sole discretion of the Insurer. As per the Insurance guidelines, you are allowed to cancel the policy with-in 15 days from the date of Issuance of policy. For more details, please read the Plan Brochure carefully or talk to our advisor at the time of purchase.

      *All the health insurance plans cover hospitalization expenses including COVID-19 treatment cover up to the specified limits. You can also buy specific COVID-19 health insurance policies such as Corona Kavach Policy and Corona Rakshak policy.

      **All savings and online discounts are provided by insurers as per IRDAI approved insurance plans. #Tax Benefits are subject to changes in tax laws. GST Exemptions depend on fulfilment of qualification criteria and submission of relevant documents.

      *₹1748/month is the starting price for a 1 crore health insurance for an 18-year-old male, with no pre-existing diseases. Discount on renewal premium is subject to the number of wellness points earned in the health insurance policy. For more details about the plans, please read the sale brochure carefully to get upto 100% discount on renewal premium.

      *₹400/month is the starting price for ₹ 5 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹541/month is the starting price for ₹ 10 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹762/month is the starting price for ₹ 1 Crore Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹243/month(₹ 8/day) is the starting price for a 5 lakh health insurance for a 20-year-old male, non-smoker, living in Bengaluru with no pre-existing diseases

      *₹2020/month is the starting price for ₹ 1 Cr Health insurance for a 50 year old male & 50 years old female, living in Bangalore with no pre-existing diseases rounded off to nearest 10.

      *₹390/month (₹13 per day) is starting price for 1 cr. Health insurance for 25 years old male, with pre-existing diseases, residing from tier 1 city rounded off to the nearest 10.

      *No medical tests are required unless requested by the insurer’s underwriter. In-case of pre-existing diseases relevant medical proof would be required as per the terms and condition of the policy opted.

      *The values taken for effective cost calculation are indicative values and may change as per the selected plan.

      *Coverage upto double the amount of Sum Insured is available on certain covers for a minimum plan of Rs. 5 Lakh on the first claim only to an individual of upto 45 years of age with no pre-existing diseases. The benefit is available with or without extra cost depending on the plan chosen.

      *Coverage of pre-existing diseases is provided by insurer as per their underwriting policy.

      *The scope of coverage may vary from plan to plan.

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