Life Insurance

Health

Highlights

A health insurance policy is a contract between the insurance company and the policyholder, wherein the insurer pays for the medical expenses incurred by the life insured.

The insurer will either provide a reimbursement for your medical expenses or ensure you are eligible for cashless treatment for injuries or illnesses covered under the policy at one of the network hospitals.

You can also get tax deductions on the premiums paid towards health insurance under Section 80D of the Income Tax Act, 1961.

Types of Health Insurance

Medical insurance plans in India can be broadly classified into two types, namely reimbursement or indemnity based policies and fixed benefit hospitalization plans.

Reimbursement or indemnity-based health insurance

This type of health insurance plan is commonly known as mediclaim. The insurer will reimburse any medical expenses incurred due to hospitalization, diagnosis, and pre and post-hospitalization treatments.

Mediclaim plans have an annual limit which is renewed every year. This type of plan is available as:

Individual Health Insurance Plan

Under an individual health insurance plan, only one person is covered for the chosen sum insured. Family members can be enrolled under this plan but a different sum insured has to be chosen for each member.

Family Floater Insurance Plan

This type of plan is customized for families, wherein a fixed sum insured is available for all insured members for one or more claims during the policy tenure. Spouse, dependent children, and parents can be included under this plan.

Fixed benefit hospitalization plans

This type of plan offers fixed coverage and benefit payouts if the insured member is diagnosed with a specified illness or is hospitalized. It partially covers hospitalization costs and provides a substitute income.

Some health insurance add-ons or riders that can be attached to your base policy are:

• Critical illness plans
  

  The insurer will pay a fixed benefit payout if the insured person is diagnosed with any of the critical illnesses specified under the policy. The lump sum benefit can cover hospitalization cost and act as an income supplement.

• Hospital Cash and Surgical benefit plans

  This plan covers defined hospitalization and surgery costs. Medical bills will have to be submitted to the insurer to receive the benefits.

Key Benefits

A comprehensive health insurance plan with excellent features has various benefits to the policyholder. It is very important for one to know the benefits that are generally available under health insurance plans as they help in selecting the right plan.

While the biggest benefit of having the best insurance plan is that you are always financially protected in case you have a medical emergency, there are many other benefits too. Some of the benefits are:

No-claim bonus (NCB)

NCB refers to the percentage of discount that is given to the policyholder from the insurer for every year that the former has made no claims. It encourages the policyholders to not make petty medical claims.

Please note that NCB can be given as a discount on the premium payable while renewing the policy or the insurer may choose to increase your sum assured amount. While renewing a health insurance policy, it is very important to check if you have received your no-claim bonus.

Family/loyalty discounts

Family and loyalty discounts are given to a policyholder who enrols a family member or another person in the health insurance plan. This is a reward paid by the insurance company to the policyholder for referring people to them.

The policyholder also benefits from the discount given as insurers usually give 5% to 10% discount on the premium which is payable by the new member.

Round-the-clock customer support

Most people find insurance plans to be complicated. To help people understand their health insurance plan better and to answer queries if any, all health insurance provide 24/7 customer service.

Sum Assured Restoration

Most of the time, policyholders with a family floater plan are afraid that the total sum assured amount available under the plan can be exhausted if one person is critically ill. To help people make optimum use of their sum assured, insurers these days offer sum assured restoration benefit.

If a policyholder has a health insurance plan with restoration option, once the sum assured amount is completely used, it will be automatically restored at no additional cost. Health insurance plans with restoration benefit are expensive than the regular health insurance policies.

Cashless facility

India is going digital and so is our healthcare system. Gone are the days you had to carry cash in hand to pay your medical bills. In case of hospitalisation, when you have a health insurance plan, the insurer will settle the bill directly with the hospital.

The insured person does not have to pay the bills. This has helped many people significantly as they don’t have to arrange for funds during an emergency medical situation.

Online application and renewal facilities

Insurance providers these days have a great online presence. All of them keeps their websites updated at all times as it is very important for them to keep in touch with their customers, to gain new ones, to upsell, and to launch new insurance products.

As a customer, you will be able to buy or renew your health insurance plan within few seconds from the comfort of your home.

Free check-ups

To encourage their customers to lead a healthy life, most insurance providers also offer free medical check-up facility once in a while. Depending on the type of policy that a policyholder holds, he/she may be eligible for a master health check-up.

Lifelong renewability

It is very important to choose a plan that protects you for a very long time, especially during your old age. That is exactly why many health insurance plans these days come with lifelong renewability option. The policyholders will be allowed to renew for a lifetime. To keep the insurance cover always active, the insured has to renew the policy at the end of every policy term.

Co-payments/deductibles

When it comes to health insurance plan, policyholders will have an option to choose to co-pay. When a claim is made and if the insured has opted for co-payment, then pre-agreed percentage of the claim is paid by the insurer and the remaining is borne by the insured. Please note that the sum assured amount under the plan will not be affected by co-payments.

Claim updates and quick settlements

Due to competition, the quality of customer service in the health insurance industry has increased by leaps and bounds. To retain their customers, insurers treat their claims professionally and send them updates about the status of their claims via email/SMS/phone call.

Also, the claim settlement ratio has gone up in the last few years. The claim settlement ratio of an insurer is very important as it indicates the number of claims that an insurer has rejected versus the number of claims the insurer has settled. This ratio will let you know if the insurer is playing a fair game.

Tax benefits

Not to forget, all health insurance policyholders can enjoy tax benefits for the premiums paid towards the plan under Section 80D of the Income Tax Act, 1961. If you are filing taxes and are looking for ways to reduce the tax amount you pay, invest in a health insurance plan today.

Portability

Often we tend to go back to our service providers and switch to another company that caters to our needs better. The same rule applies to health insurance providers as well.

One of the benefits that health insurance plans offer today is portability. The policyholder will be allowed to switch from one insurance company to another without compromising on the waiting period or any other features and benefits which were available with the previous insurer.

Exclusions

While coverage is at the discretion of individual insurers, there are certain exclusions or conditions that form an important part of the contract.

The more common ones are elucidated below

• The policy comes into effect after a waiting period, usually 30 days from inception.
• Pre-existing diseases and other specified ailments may be covered subject to a waiting period. This usually ranges between 2 to 4 years.
• Some policies specifically exclude maternity/new-born expenses.


• Injuries/ailments arising from:
  
  
  • War, civil unrest, terrorism and related acts.
  • Nuclear risks.
  • Suicide attempts, hazardous activities, acts of negligence.


• Ailments such as HIV, STDs and other related illnesses/illnesses of similar nature.
• Alternative/unrecognized treatments that are non-allopathic in nature (some policies cover ayurvedic, unani and similar treatments).
• Procedures like cosmetic/plastic/sex change surgeries, hormonal replacements etc.
• Dental, optical procedures etc.
• Genetic disorders; Psychiatric disorders.
• Expenses for rest and rehabilitation; common illnesses of mild severity.
• Unnecessary diagnostic tests, treatment, post-care procedures.
• Treatment/diagnosis undertaken outside India or by an unqualified medical professional.

Health Insurance - How It Works?

Health insurance is the best financial protection you can get for you and your loved ones in the current scenario of rising healthcare costs and lifestyle diseases. Choose a medical insurance plan and the company with care. Also, remember to renew your policy on time.

Choosing a health insurance plan

There are several health insurers selling numerous medical insurance products. While choosing a health insurance plan, take the time to research about the company, the products, and the insurer's Claim Settlement Ratio.

How to Claim?

If you require hospitalization, you can file a claim with your insurance provider in 2 ways:

• If are hospitalized in a network hospital, you can opt for cashless treatment, wherein the insurer settles the medical bills directly with the hospital.
• If are hospitalized in a non-network hospital, you have to pay the bills out of your pocket, then file a reimbursement claim with your insurer. The insurer will verify the claim documents furnished by you and reimburse the medical expenses.

Policy renewal

A health insurance plan is usually active for 1 year. You must renew the policy each year in order to avoid losing the benefits associated with the plan. Always renew your insurance on time to avoid policy lapse.

Note : Policy details offered are indicative, not exhaustive. Please contact your nearest Arunaya office for further details.