What is the Definition of Health Insurance?

A health insurance policy extends coverage against medical expenses incurred owing to accidents, illness or injury. An individual can avail such a policy against monthly or annual premium payments, for a specified tenure.

During this period, if an insured meets with an accident or is diagnosed with a severe ailment, the expenses incurred for treatment purposes are borne by the insurance provider.

You can also enjoy several add-on benefits, extended with health insurance policies, which are discussed in detail in the following sections.

But, in the first place,  

What do these statistics signify? The possible medical complications individuals might develop during their lifetime and corresponding expenses for treatment of the same.

The healthcare market in India is estimated to be valued at US$ 372 billion by 2022, reflecting the rate at which medical charges are expected to increase in the country.

These staggering figures, coupled with rising medical expenses, demonstrate the importance of health insurance policies in India. These policies offer comprehensive coverage of healthcare expenses against periodic premium payments made by the policyholders. 

Important: Learn more about the advantages & disadvantages of Coronavirus Insurance in India

1. Hospitalisation Expenses

Any medical condition requiring urgent hospitalisation is covered under standard health insurance plans. However, claims are only entertained, provided the disease has not been previously diagnosed when the insurance plan was not availed.

Hospitalisation expenses incurred under the following situations are also extended by renowned insurance providers:

2. Pre and Post Hospitalisation Charges

Pre hospitalisation expenses such as diagnosis expenses, and doctors’ fees etc. can be covered by a health insurance plan. 

Expenditures post-release such as medication, routine check-ups, injections, etc. are also reimbursed by most insurance companies. Compensation funds against the same can be extracted as a lump sum amount, or by producing respective bills. 

3. No Cap on ICU Room Charges

Health insurance policies also cover ICU bed charges. An insured individual can also choose to stay in a private room, costs of which can be billed against the respective insurance provider, up to a specified amount or total insured amount, at the discretion of the insurance company.

4. Cover Against Mental Illness

Hospitalisation in due course for mental treatment is also covered under such health insurance policies. With rising rates of mental health issues in India and globally, this facility allows individuals to seek professional help for a well-rounded life.

5. Bariatric Surgery Costs

Only specific insurance providers agree to bear all expenses incurred for surgeries aiming to help individuals overcome their obesity problems. Obesity often lead individuals to develop other related complications such as heart problems, diabetes, high blood pressure, etc. This promotes the overall wellbeing of individuals in the long run.

Such features of a comprehensive health insurance policy are adept at meeting all major medical expenses an individual might face. At slightly higher premium charges, additional benefits in the form of higher coverage facility are offered by major institutions.

6. No Room Rent Capping

Room rent of hospital rooms is covered under such health insurance policy, allowing insured individuals to recover with comfort. Total amount disbursed in such cases are specified by an insurance company beforehand.

7. Daycare Procedures

Expenses incurred for daycare treatment at hospitals such as dialysis, cataract, tonsillectomy, etc. are covered under most health insurance plans.

8. Road Ambulance Charges

A standard health insurance policy covers any road ambulance expenses incurred during times of medical emergency. This poses a significant benefit as premium hospitals often charge substantial amounts for transportation.

9. Refill Sum Insured

Under such health insurance policy, you can make claims amounting up to the sum insured twice a year, provided the medical conditions are different each time. 

10. No Claim Bonus

For every non-claim year, insured individuals are extended discounts or a higher sum insured (at no additional cost) in the succeeding years, that can help to reduce their premium charges payable annually or to extend their sum insured coverage.

11. Daily Hospital Cash Cover

Daily cash allowance is provided by stipulated institutions, enabling individuals to make up for the loss of pay during times of hospitalisation.

12. 0% Co-payment

Renowned insurance companies cover the entire medical bills generated during the treatment procedure of an insured individual, up to the sum insured amount. Zero co-payment mitigates the financial liability of a patient, allowing him/her to focus solely on recovery.

Know more about

• What is Copay in Health Insurance
• Difference between Copay, Coinsurance & Deductible

13. Zone upgrade Facility

In India, treatment costs usually vary from one city to the other. It is especially higher in metropolitan cities like Delhi and Mumbai. 

With a zone upgrade, you can avail higher financial coverage for treatments at different city zones. Zones are classified as per the city’s medical expenses. The higher the medical expense in a particular region, the higher it is placed in such classification. 

This add-on allows you to account for the disparity in treatment costs across different regions or zones with a slightly higher premium. But subsequently allows you to save on your total premium by 10%-20%. 

 *Currently, at Digit, we have no Zone Upgrade Add on. However, you get an additional discount on premium if you are based in Zone B. Not just that, we have No zone-based co-payment.  

14. Domiciliary Care

Coverage against all expenses incurred for home hospitalisation is covered under comprehensive health insurance policies. This includes medication, nurse fees, injections etc. payable for comprehensive treatment of a patient.

15. Organ Donation Charges

Claims can be made against all medical bills accruing to organ donation.

All major insurance companies maintain the above-stated provisions on their insurance products. Nonetheless, various types of insurance policies are offered to attribute to specific diseases, or catering to different age groups. 

1. Individual Health Insurance

An individual health insurance policy, like its name suggests covers the treatment cost of a single individual. This cover can be availed for yourself, parents including your spouse and children. 

Under this plan, every family member gets an individual sum insured. For example; if your plan sum insured is Rs 10 lakhs, each family member gets to use up to 10 lakhs each for that policy period, i.e. if you’re buying an individual plan for three members, the collective sum insured for the three would be Rs 30 lakhs.

It means that if something were to happen to all/more than one of your family members at the same time, this health insurance policy will be enough to cover them all due to the separate sum insured amount.

2. Family Floater Health Insurance

Under family floater plans, a single sum insured is available for all individuals under one policy. This entire sum can be disbursed for treatment of one person respectively, in which case no subsequent claims are covered in the event of another medical emergency.

Senior citizens are not eligible under family floater plans, as their medical needs tend to be more complicated.

3. Senior Citizen Health Insurance

Tailor-made to suit all medical expenses of aged individuals, such plans like senior citizen health insurance can only be obtained by people above the age of 60 years. Comprehensive coverage for different types of illnesses which might develop due to old age is extended.

4. Group Health Insurance

Companies extend such plans to their employees. Premium is paid by the employer itself and has provisions which ensure refill of the sum insured. Such group health insurance policies are cost-effective and are undertaken disbursed as an employee retention tactic.

However, you should remember that this insurance cover can only be availed as long as you are employed at the company. The benefits of the cover cannot be availed if you are terminated or have left your job at the company.

5. Health Insurance with Maternity Cover

All pre and postnatal care expenses incurred during pregnancy are covered under maternity insurance cover. Medical bills of a new-born are included for the first three months as well. However, such policies come with a waiting period of two years.

6. Top-Up Health Insurance

Oftentimes, the treatment costs you estimate while availing a health insurance cover can increase over time even though your sum insured remains unchanged.

Under such circumstances, you can choose to avail a top-up for your existing cover, instead of purchasing a separate policy. This top-up policy helps to increase the overall sum insured which you can use in case of any emergency.

But to avail the top-up, you will first need to choose a deductible amount. For example, if you go for top-up plan of Rs. 3 Lakhs with a deductible of Rs. 50,000.

Then, at the time of claim, you will first have to bear this Rs. 50,000 from your pocket. Once the deductible amount is exhausted, the insurance provider will come into the picture and will borne the remaining expenses up to 3 Lakhs.

These health insurance plans are designed to meet all healthcare expenditures a person might incur in their lifetime. It is significantly different from life insurance plans, as the latter provides financial coverage based on the life or death of an insured individual.

Know more about the Types of Health Insurance in India in detail.

People should carefully factor in the following parameters before choosing a plan:

1. Benefits and Sum Insured

An insurance plan should be selected depending upon the age and medical history of an individual. Also, look into the coverage benefits extended by an insurance provider, as well as the waiting period before which any claims can be made.

2. Market Reputation of the Insurance Company

This is a significant factor to be analysed carefully, as it reflects the method and time taken for disbursement of the claim amount.

To ensure hassle-free distribution, ensure your insurance provider satisfies the following conditions – 

• High claim settlement ratio - This reflects the percentage of insured individuals who applied for claims successfully received the requested amount to meet all medical bills generated.
• Assets under management - This reflects the total number of people opting for an insurance policy from the specified company, through total funds available. Cumulative premium amounts collected from all policyholders are categorised as assets under management. A high AUM value implies a larger proportion of individuals are opting for plans from the stipulated company, hence reflecting its reputation in the market.
• Solvency ratio - This indicates the ability of a company to meet its short term and long term liabilities in the event of multiple claims simultaneously. A higher solvency ratio indicates sound management of a company, as the assets managed is substantially higher than total claims which have been or might be made.
• The number of years in business - Experience of an insurance company speaks volumes regarding the manner in which all claims are settled, as well as a mannerism of fund disbursal.

3. Network hospitals

A higher number of network hospitals ensure cashless claim transfer required for treatment. The hassles of third-party involvement are diminished by facilitating the treatment process.

4. Routine Medical check ups

Major insurance companies have provisions for free annual check-ups of policyholders, allowing them to keep track of their health conditions.

5. Renewability

Choose insurance providers who have lifetime renewability clause in their policies. Such a facility allows individuals to remain financially secured in any unpredicted situations causing deterioration in their health conditions at constant premiums.

You can choose an ideal health insurance policy suited to meet all your medical requirements by keeping the following pointers. Nominal premium charges can go a long way into easing the financial burden significantly in your lifetime through a health insurance policy.

As most people opt for health insurance once in their lifetime, and renew it periodically, selecting the right pan is crucial.