Health Insurance

What is Health Insurance?

Health insurance policy is like a safety net for your health.

Think about it this way: imagine you're walking on a tightrope high above the ground. You don't know when you might slip and fall, but if you have a safety net, you'll be protected if it does happen. A health insurance policy is like that safety net for your health.

Imagine you have a health insurance policy that covers doctor visits, hospital stays, and prescription drugs. If you get a cold and need to see a doctor, your insurance policy will help cover the cost of the visit. If your cold ends up being pneumonia and you end up needing to be hospitalized, your insurance will help pay for the hospital stay and any treatment you receive. And if you need medication, your insurance will also help cover the cost of your prescription drugs.

Let's explore some additional benefits that come with health insurance

What are the benefits of Health Insurance?

Having health insurance offers more than just peace of mind, it can provide financial protection during unexpected health events. Here are some benefits of having health insurance:

1. Covering Hospitalization Costs : Your health insurance policy can help you pay for hospital stays related to illnesses or injuries, even those that may require immediate attention. Reputable insurance companies often cover costs associated with:

• Treating Critical Illnesses: Some insurance companies will pay for all medical expenses, including hospitalization, diagnoses, and medications, for the treatment of acute diseases like cancer, heart attacks etc.
• Hospitalization for Accidents and Diseases: These costs include medical expenses incurred during hospitalization for illnesses or unexpected injuries, and some insurance companies offer to pay the entire amount or more. Having these expenses covered offers significant security in case of unforeseen health events.

Checklist to buy insurance policies:

We believe you have understood that health insurance is a critical component for protecting your financial well-being and ensuring you have access to quality healthcare when you need it. With so many options and variables to consider, buying a health insurance policy can seem overwhelming. But with a clear understanding of what you need and what you're looking for, the process can be manageable. To help make the process easier, we've created a comprehensive checklist for buying health insurance policies. This checklist will cover all the essential elements to consider and help you make an informed decision when choosing a policy that meets your unique needs and budget. Whether you're a first-time buyer or are looking to switch policies, this checklist will ensure you don't miss any important details.

1. No Claim Bonus

How happy would you be if the insurance company told you that they will increase your cover if you stay healthy and don't make any claims? No claim bonus is an insurer's way of rewarding you for not making any claim.

For example, let's say if your insurer promises to increase your cover by 50% each year, above the original sum insured, if you don't make any claims. For instance, starting with a coverage of ₹5 lakhs, the next year it could increase to ₹7.5 lakhs, and then to ₹10 lakhs the following year. The No Claim Bonus is a good feature, but make sure it is substantial, with a minimum of 10% increase to be meaningful.

1. Restoration Benefit

Have you ever been in a situation where you've exhausted all of your health insurance coverage and still needed medical attention? That's where restoration benefits come in! Some insurance policies offer unlimited restoration for any illness, while others have restrictions. For example, let's say you have a health insurance of 5 lakhs and you spend the entire amount on hospitalization. If you suddenly need medical attention again after three months and the bill comes to 3 lakhs, your original health plan won't cover it. But, if you have a restoration benefit, your insurance company will automatically refill your coverage back to 5 lakhs, giving you the chance to make a claim again within the same policy year. Just be aware, some policies may not allow you to claim the restoration benefit if you have the same illness once again. It's important to carefully read the fine print!

3) Disease wise sublimit

Beware of disease-wise sublimit in health insurance policies! These sneaky clauses limit the amount you can get back for specific diseases or treatments, regardless of your overall coverage. For instance, a cheaper policy might only cover up to Rs 2 lakhs for a heart disease, even though the policy advertises a total coverage of Rs 10 lakhs. Don't be a victim of these unfair practices. Do your due diligence and make sure there are no disease-wise sublimits in your policy, because you never know what the future holds and it's always better to be on the safe side.

4) Opt for low waiting periods

Have you heard of waiting periods in insurance policies? It's when the insurance company won't pay out for certain pre-existing or critical illnesses during the first few years of your policy. And the wait can be a long one - sometimes as much as 3 years! The only way to avoid this is to choose a policy with the shortest waiting period possible. Unfortunately, some common illnesses like diabetes, hypertension, and osteoporosis come with a built-in wait time. But don't worry, by doing your research and choosing wisely, you can find a policy that works for you.

5) No room rent cap

Some insurance policies come with a limit on how much they'll cover for room rent. For example, if you buy a policy with a sum insured of Rs 5 Lakh and a room rent limit of 1%, your room rent is capped at Rs 5000. Any amount above this will come out of your own pocket. The catch is that all other expenses, like the surgeon's fee and medical tests, are tied to this room rent limit. So, if your room rent is below Rs 5,000, you'll be compensated for these expenses. But if it goes above Rs 5,000, your total claim will be reduced in proportion to how much you exceeded the room rent limit. To avoid these restrictions, it's best to opt for a policy that doesn't cap room rent.

6) Do you mind chipping in?

"Co-payment" means your insurance only covers part of your medical expenses and you have to chip in and pay the rest, usually 10-20%. The insurance company might offer a lower premium as a trade-off. However, it's not always worth it as you could end up paying lakhs in hospitalisation expenses in the long run while trying to saving just a few thousand rupees in premiums. It makes more sense for senior citizens because they can save money this way.

7) Check for cashless hospital network

Want to make your hospital visits stress-free? Look for a health insurance plan that offers cashless services. With this feature, the insurance company pays for your medical treatment directly, so you don't have to dip into your own pockets. Just double check the policy document to see if the hospitals near you are part of the insurance company's network. That's it, you're all set for a hassle-free hospital visit!

Types of Health Insurance in India

1. Individual Health Insurance

As the name implies, a single individual's medical expenses are covered by an individual's health insurance coverage. This coverage is available for you, your parents, your spouse, and your kids.

Every family member receives a separate sum insured under this plan. For instance, if your plan's sum insured is Rs. 10 lakh, each family member may spend up to Rs. 10 lakh throughout the policy; thus, if you purchase an individual plan for three people, the total sum insured would be Rs.

Because each family member has a different total covered amount if something were to happen to all or more than one member of your family simultaneously, this health insurance policy would be sufficient to cover everyone.

2. Family Floater Health Insurance

In such plans, each person is covered by a single sum insured under a single policy. This total amount may be paid out for the treatment of one individual, in which case any more claims for the same medical emergency will not be covered.

Due to their extensive medical demands, seniors are not eligible for family floater insurance.

3. Senior Citizen Health Insurance

These plans, explicitly intended to cover all medical costs for seniors, are exclusively available to those over 60—extended comprehensive coverage for various ailments that might arise with advancing age.

4. Group Health Insurance

These programs cover employees of businesses. The employer pays the premium, including clauses that guarantee the renewal of the covered amount. These affordable group, health insurance plans are offered as a retention strategy for workers.

It would help if you kept in mind that you may only benefit from this insurance coverage while you work for the organisation. If you're fired or quit your work at the firm, you can't use the advantages of the cover.

5. Health Insurance with Maternity Insurance

The maternity insurance coverage pays for all prenatal and postnatal care costs incurred during pregnancy. A new-medical born's expenses for the first three months are also included. However, there is a two-year waiting period for these plans.

6. Critical Illness

As expensive medical expenditures are created for appropriate treatment of life-threatening disorders. A critical illness insurance policy offers protection against these particular occurrences, giving patients the financial security they need for the best possible care and recovery.

However, the set sum offered by this plan may only be obtained if the covered individual lives for 30 days after diagnosis.

7. Top-Up Health Insurance

The treatment expenses you anticipate when purchasing health insurance can rise over time even while your covered amount stays the same.

In such cases, you can add to your current coverage rather than getting a new policy. This top-up policy can use the whole sum covered in an emergency.

But before you can use the top-up, you must pick a deductible amount. Assume you choose a top-up plan with a deductible of Rs. 50,000 and a coverage amount of Rs. 3 Lakhs.

Then, you would have to pay this Rs. 50,000 out of pocket at the time of claim. The insurance company will enter the picture and cover the remaining costs of up to 3 Lakhs once the deductible sum has been used.

These health insurance policies are purchased to cover all potential lifetime medical expenses. It differs significantly from life insurance plans, which provide financial protection depending on the survival or demise of an insured individual.

8. Super Top-Up Cover – Health Insurance

A super top-up comes to the rescue when a single claim does not cross the threshold limit of the standard policy, but multiple claims do.

Example – Dr. Sharma has a personal Health Insurance policy of Rs 3 Lakh and a Super Top health cover of Rs 10 Lakh sum assured (total coverage Rs 13 Lakh), with the threshold limit of Rs 3 Lakh.

• Scenario 1 – If there is a single claim of Rs 2 Lakh in a year, his standard policy will pay Rs 2 Lakh.

• Scenario 2 – If there is a single claim of Rs 5 Lakh in a year, his standard policy will pay Rs 3 Lakh, and the super top-up plan will pay the remaining Rs 2 Lakh.

Top up vs Super Top up:

Situations	Top-Up Cover	Super Top-Up Cover
Hospitalisation in Year 1: You Claim Rs 2 Lakh	Paid by base plan (2 Lakh)	Paid by base plan (2 Lakh)
Hospitalisation in Year 2: You claim Rs 4 Lakh	Paid by Base plan (3 Lakh) & Paid by Top up (1 Lakh)	Paid by Base plan (3 Lakh) & Paid by Super-top up (1 Lakh)
Hospitalisation in Year 3: You make 2 claims in the same year: Of Rs 4 Lakh, and Rs 2 Lakh	First Claim (4 Lakhs) :Paid by Base policy (3 Lakhs) & Paid by Top up (1 Lakh) Second Claim (2 Lakh): Paid out from your pocket (2 Lakh) Top-up plan cannot be claimed as the claim amount is less than the deductible amount of Rs 3 Lakh	First Claim (4 Lakhs): Paid by Base policy (3 Lakhs) & Paid by Super-top up (1 Lakh) Second Claim (2 Lakh): Paid by super-top up policy (2 Lakh)

What Should You Consider When Choosing a Health Insurance Policy?

Before selecting a strategy, people should carefully take into account the following factors:

1. Benefits and Sum Insured

A person's age and medical history should be considered when choosing an insurance plan. Additionally, look at the insurance company's coverage features and the waiting time before filing any claims.

2. Market Reputation of the Insurance Company

This critical component must be carefully considered since it represents the process and timeline used to disperse the claim money.

Your insurance provider must meet the following requirements to guarantee hassle-free distribution:

-High claim settlement ratio indicates the proportion of insured people whose claims were approved and receiving the desired amount to pay for all incurred medical expenses.

-Assets under management - The total amount of cash available shows the overall number of individuals choosing insurance coverage from the stated firm. Assets under management are defined as the total sum of all policyholder premium payments. A high AUM figure suggests that a more significant percentage of people choose plans from the specified firm, showing its standing in the market.

• Solvency ratio -This demonstrates a company's capacity to pay its current and future obligations in the case of concurrently arising demands. Since the assets maintained are significantly more than the total claims that have been or may be made, a higher solvency ratio implies competent management of a corporation.

• The number of years in business - Regarding how all claims are resolved and how funds are distributed, an insurance company's experience speaks volumes.

3. Network hospitals

More network hospitals guarantee the cashless claim transfer necessary for treatment. The facilitation of the treatment procedure reduces the inconveniences of third-party participation.

4. Routine Medical checkups

Major insurance providers provide clients with free yearly checkups so they can keep track of their health concerns.

5. Renewability

Select insurance companies with lifetime renewal provisions in their contracts. Such a service enables people to maintain regular premiums while remaining financially secure in case of unforeseen circumstances worsening their health problems.

By keeping the following guidelines in mind, you may select an optimal health insurance plan that will satisfy all of your medical needs. A health insurance policy's nominal premium costs can significantly reduce your lifelong financial load.

Choosing the appropriate plan is essential because most individuals only purchase health insurance once in their lives and renew it occasionally.