Health Insurance Plans and Types
Health is an independent beast. Why do we say that when we know that there are a number of things we can do to stay healthy? We know that we can eat and drink healthy, we can maintain a good exercise regimen, we can sleep well to revitalize our body. There is so much that we can do and then why is that we call health and “independent beast”?
The reason is that no matter how much we try, health remains unpredictable. A perfectly healthy person with daily exercise habits can actually get a heart attack. A person who has never smoked before can get cancer! There can be a genetic problem which will invariably show up even if you live healthy, eat healthy and drink healthy. For instance, if your great grandfather had asthma, the likelihood of you getting asthma cannot be zero. In fact, you will always be at a risk of developing asthma.
Now do you understand why we say that health is an independent beast? Well, we just talked about illnesses or diseases. What about freak accidents? They are something we will never want but again, they are something we cannot prevent. They just tend to happen. While there are various forms of accidents – lethal and subtle, subtle ones can also create tremendous health problems. For example, just slipping and falling on bathroom floor can lead to broken limbs or a head trauma and concussion. What about a bad allergic reaction to a simple pain killer?
Exactly what will trigger the need for health insurance is simply unpredictable. Hence, it is absolutely necessary that we get a health insurance.
But, why health insurance?
Smart question! See, when your health gets derailed, you need to get medical care. Medical care can be as simple as a pain killer or may be as serious as intensive care after emergency hospitalization. You just cannot say for sure what will come your way. This is where health insurance comes in. Simple medical expenses like a few hundred or a few thousand worth of medicines may be taken care of easily but when it comes to hospitalization, the medical bills can break free the roofs and burn a hole in your wallet. A medical insurance will give you relief from that.
Precisely how does health insurance work?
We can go by books and give you a really difficult definition and modus operandi of health insurance. But, we are not a bunch of idiots whose sole motive is to make life difficult for others. So, we will give a simple explanation.
Say, there are 26 people with each one of them having a spouse.
These 26 people are represented with capital letters A, B, C etc. till Z.
The 26 spouses are represented with small letters a, b, c, etc. till z.
So, there are 52 people in total. They are A, a; B, b; C, c; … Z, z
What is the probability of these 52 people falling sick at once? That’s an impossibility we are talking about unless there is something like a zombie apocalypse or a widespread epidemic like that of Black Death of 1347 to 1352.
May be 2 or 3 people will fall sick at once.
Now, these 52 people decided to create a pool of money which will be kept aside for medical treatment of anyone who falls sick in that group of 52 people. Here are the features of the fund:
- Everyone contributes 100 rupees a month (so, total money accumulated in a month is 5,200).
- Everyone decides to contribute the same amount for 5 years (so, total money accumulated will be 5,200 x 12 x 5 = 3,12,000.
So, in 5 years, they manage to accumulate a sum of INR 3,12,000.
Now, since this is a community fund, when someone falls sick, money from this fund is taken out to provide medical treatment for the person who is sick.
Isn’t that a simple method?
That is the principle on which insurance works. There are other nitty gritty details to the process but that’s the basic or the core method.
Now, there are several questions that you may ask:
- Is it necessary that the community will invest only for 5 years? Not really, no! They can keep investing as long as they want or for a predefined time period.
- What happens when the fund is used up? Well, a fresh round of investment comes up. However, remember that the example we took involved only 52 people. In reality, insurance companies work with literally hundreds of thousands of people. So, the fund they create is massive.
- Is there a way for the fund to grow independently? Hell yes! The fund money can stay sitting in a locker and doing nothing other than collecting dust or the money can be invested in market to earn interest. The interest so earned can be put to several uses like, covering the cost of investment, reinvesting in market for further growth and more…
That’s the simplest explanation we can provide for the modus operandi (modus operandi means method of operation). As we said earlier, there are several nitty gritty details that we cannot include in this article simply because insurance companies work in a very complex set up and deal with lakhs of crores of people. But remember, no matter how complex a system grows for a company, it will always and always have the basic method (described above) in its core.
Time to take a jump…
We have a basic idea of how health insurance works. Now, let us know about the various types of health insurance plans which are available in India.
Types of health insurance plans in India
There are some broad categories of health insurance plans in India. There may be sub categories from various insurance companies but in general, the broad categories available in India are:
- Individual health plans.
- Maternity insurance plans.
- Personal accident plans.
- Senior citizen health plans.
- Family floater health insurance plans.
- Critical illness plans.
- Employee or group health insurance plans.
Let us take a quick look into different health plans in a brief:
Individual Health Plans
|PLAN TYPE||QUICK DESCRIPTION|
|INDIVIDUAL HEALTH PLANS||This is a type of insurance plan in which only one person gets insurance cover. This person is known as ‘insured’. It is not necessary that the insured will be the person who pays premium. For instance, a person can buy an individual plan for his unemployed daughter. Buyer in this case will pay for the insurance premium while the daughter will become the insured. Individual health plans have several interesting features which are mentioned below.|
|Ø Only the insured individual gets health coverage under this type of plan.
Ø Depending on the amount of premium paid, the insurance provider will pay for or take care of certain medical expenses.
Ø Hospitalization charges are covered under this type of health insurance plan.
Ø Allows lifetime renewal.
Ø Covers several costs such as cost for laboratory tests, fee of the attending physician, rent of the room taken, cost of surgery etc.
Ø For a few types of healthcare services, the insured needs to pay a predetermined amount of cost. This feature is known as co-payment.
Ø Certain expenses – before and after hospitalization are covered under this type of insurance.
Ø One can enjoy tax benefits against premiums paid for this type of insurance. The tax deductions are provided under section 80D.
Ø A person can actually opt for critical illness coverage with this type of health plan.
Maternity Insurance Plans
These types of insurance plans didn’t exist until recently. However, now they do exist. But why? There are several reasons for the same. In a survey, which was conducted few years back, it was found that in India, women are opting to become mothers when they reach the age of 32 years or above. Simply put, they tend to become mothers only during their early thirties and not prior to that as opposed to old times when women used to become mothers by 23-24 years of age.
Studies have shown that the longer women take to enter motherhood, complications in pregnancies increase significantly. On top of that, complications increase more for those who opt for caesarean deliveries over normal deliveries.
Weirdly enough, metropolitan cities have witnessed a sharp rise in the normal to caesarean delivery ratio. The ratio today stands at 35% normal delivery against 65% caesarean delivery. Because of the increased rate of maternity complications, a pressing need was felt for maternity insurance plans.
One of the weirdest aspects of maternity insurance plans is that they come with a very long waiting period. On top of that, they have high premiums. Here is another shocker – there is no such thing called standalone maternity insurance plans. Such plans are actually fused with conventional health insurance plans and the insured or the policyholder needs to pay additional premiums for covering expenses that can raise out of maternity care.
What really is waiting period?
Maternity insurance comes with what is known as waiting period. This means that once the health insurance plan is purchased, the maternity rider will not become applicable unless and until the health insurance plan has completed at least 3 years and up to 6 years of policy period. Only after that period has lapsed, the insured can claim maternity insurance coverage.
Why is premium high?
What do you think – if a woman is purchasing a maternity insurance, what will be the claim ratio? Usually, the claim ratio will be 100% because women will become mother except for a few cases such as:
- An unfortunate miscarriage.
- Woman no longer willing to become mother or bear a child.
- Turns out that a woman is not capable of becoming a mother etc.
In scenarios like those maternity insurance claim will not come in place. Apart from scenarios like that, once a maternity plan is purchased, the claim will be made, making the claim ratio to be nearly 100%. Since insurance companies work on the basic concept that there will not be 100% claim ratio for a particular insurance plan, the premiums can be kept low. However, when a type of insurance policy comes with high claim ratio, premium increases as the insurers will know that they will have to pay out to almost every insured person.
What are the most important features of maternity insurance plans?
The table below will give a quick list of the features of maternity insurance plans:
|Long waiting period||This type of insurance plan has a long waiting period. One needs to wait for at least 3 years and up to 6 years for the policy (rider) to kick in. This waiting period starts from the day on which the actual or parent health insurance policy becomes effective. In case of Group Insurance policies, the waiting period is 9 months, after which, the maternity coverage become effective and insurance pay out can be claimed.|
|Things that are included in the cover provided||30 days of expenses before hospitalization.|
|60 days of expenses after hospitalization. This includes anaesthetist charges, nursing costs, room charges etc.|
|All expenses for delivery of the child.|
|In some cases, charges for vaccination of the new born infant.|
|Charges for ambulance.|
|In case the doctors find that the new born baby is affected by congenital disorders, baby cover is provided.|
|Pre-natal expenses and post-natal expenses. This will depend on the type of delivery chosen – normal delivery or caesarean delivery.|
|In case any emergency arises, some insurers may pay up to INR 50,000 for those emergency expenses.|
|Premium to be paid||Because the product itself is a high-risk product where the claim ratio is nearly 100%, premium is pretty high. However, there are a number of factors on which the premium depends. These factors are:
Ø Industry in which the woman is working.
Ø Existing risk factors.
Ø Age of the woman.
Ø In case of group insurance policies, the number of employees will play a significant role.
Ø In case of group insurance policies, the company location also determines the premium that will be charged.
In the table above, we have learned about what all is included in the maternity health insurance. This gives us one question – “is there something that is excluded?”
Yes, there are a number of things which are excluded from a maternity health insurance plan. They are mentioned below:
- Cost of medicines that will be used.
- Cost of all regular check-ups.
- Fees to be paid to the doctor for consultation.
- Treatment costs in case one opts for treatment which is not allopathic. This means if the treatment is Ayurvedic or Homeopathic, the cost will not be covered.
- In case the woman is suffering from any congenital disease, such disease will not be covered.
- In case the pregnancy is terminated under 12 weeks’ time.
- In case the woman has Aids and treatment is to be provided, those expenses will not be covered.
- If some pre-existing injuries or ailments show up in diagnosis with 48 months from the date on which the policy commences, treatment for those injuries or ailments will not be covered.
- In case the woman inflicts some injuries on her because of alcohol use, drug usage or any other situation, the treatment cost for such injuries will not be covered by the insurance.
- Expenses related to infertility and in-vitro fertilisation will also not be covered by the insurance.
- Expenses for dental treatment will also be excluded from the insurance cover.
Is there any perfect time for opting maternity health insurance plan?
Remember that these plans haves a waiting period which is usually very long and hence, it is important to plan out the purchase of these plans before pregnancy. In fact, if you are just married, consider talking to your partner about the time when you want a baby and then purchase a plan. The plan you purchase will have a minimum of 3 years of waiting period and waiting period may be as long as 6 years.
Personal Accident Plan
Accidents are unpredictable and they can lead to a lot of damage. In worst case scenarios, accidents can lead to death. Personal accident insurance plans offer coverage against a number of possibilities like disablement, limb loss, life loss etc. that can be caused by accidents related to work or travel.
The problem with accidents is that they come uninvited and they are very unpredictable. One can become a victim of an accident while commuting to work. One can be a victim of an accident in a work place. If we start listing all dangers, the list can become way too long to be accommodated in this single article. A personal accident plan gives financial protection against such freak events, safeguarding you as well as your family members against the financial turmoil that one may face.
Broken bones, cuts, burns, ambulance cost, hospitalization costs, medical services etc. are all covered under person accident plan. Whether it is eyesight loss or limb loss or disablement, personal accident plan has everything covered. The extent or the range of coverage one wants can be decided by the person who is seeking the insurance.
Let us take a quick look at the salient features of personal accident plan:
- Provides cover hearing loss, eyesight loss, limb loss, broken bones, cuts, burns etc. and pays for ambulance and hospitalization charges against all types of accidental injuries.
- Even in case of death of the insured person, benefits are paid out.
- If the insured person becomes permanently or partially disabled, benefits are paid out.
- In some cases, temporary disablement is also covered and benefits are paid out.
- In some cases, separate plans are designed for women.
- If a person who is at a greater risk of hospitalization because of dangerous conditions for commuting, dangerous nature of work, dangerous environment for work etc., he or she should get a personal accident plan.
Remember that personal accident plan is better than a life insurance plan or a health insurance plan which are not as diverse as personal accident plans when it comes to providing cover against accidents. However, the premiums differ to a great extent for personal accident plans and the factors which are used for calculating premiums of personal accident plans are also different than the factors which are used for calculating simple health insurance or life insurance. Here are the factors which are usually accounted for when calculating the premiums for personal accident plan:
- Employment category
- Risk exposure
- Income etc.
Employment category and risk exposure are the two most important factors and more weightage is given to them compared to age and income.
In case you are wondering about the risk factor, you should know that the insurers have a complete list of various work types which they have categorized a low risk, medium risk and high risk work. The table below will give you an idea of the different risk levels for different jobs.
|Low Risk||Medium Risk||High Risk|
|Managers and administrators||Machine operators||Mine workers (those people who work in underground mines like coal mines, diamond mines etc.)|
|Lawyers, Teachers, Architects etc.||Mechanics||Jockeys|
|People with desk jobs and have least interaction with tools and machinery which can cause accidents||Veterinary doctors||Performers in a circus|
|Any other profession which are similar to the ones mentioned above||Contractors and builders||Mountaineers|
|Heavy and paid vehicle drivers||People involved in sports such as river rafting and any other dangerous sport|
|Any other profession which are similar to the ones mentioned above||Engineers who are engaged in working with power supplies of high tension|
|Any other profession which are similar to the ones mentioned above|
What are the benefits of personal accident plans?
Personal accident plans come with a number of benefits which are mentioned in the table below:
|Death by accident||This is very basic – the insured unfortunately dies because of an accident – the insurer pays out death benefits to the nominees of the insured so that they do not face any kind of financial problem.|
|Total permanent disability||In case an accident leads to total disability of the insured and such disability is permanent and there is no way in which medical science can revert such disability, the insurer will pay out the insured but within certain set guidelines. If the disability sets in not immediately but within 365 days from the date of the accident, the insurer will be liable to pay the benefits to the insured.|
|Partial permanent disability||In case an accident leads to partial disability of the insured and such disability is permanent and there is no way in which medical science can revert such disability, the insurer will pay out the insured but within certain set guidelines. Speaking of set guidelines, some insurers clarify at the beginning that if partial permanent disability is taking away a person’s ability to earn, only and only then insurance benefits will be paid out. So, watch out.|
|Total temporary disability||When we say temporary disability, we mean that the disability can be reverted back to normal conditions using medical help. However, there are some insurers out there who promise to pay out the insurance benefits to the insured even if an accident renders the insured totally disable even for a temporary time frame.|
|Partial temporary disability||Same as in case of total temporary disability, partial temporary disability states that if a person becomes partially disabled even for a temporary period due to an accident and loses the ability to earn, the insurer will pay out the benefits.|
|Dismemberment||Dismemberment in case of personal accident plans provides benefits to the insured in case the insured person ends up losing eyes, toes, fingers, legs etc. because of accidents which may occur at work place or while transit. However, for benefits to be released, the insurer will take a look into the percentage of dismemberment. There are predefined percentages and the insurer will strictly adhere to the rules.|
|Burns||This coverage is optional and extra and is provided by some insurers. In case a person dies or ends up with dismemberment caused by burns due to fire or chemicals, the insurer will pay benefits. In addition to that, in case of hospitalization due to burns, the insurance cover will provide for the hospitalization expenses. However, the insured will have to pay for hospitalization and insurer will later reimburse the money spent.|
Other things that are reimbursed
We just gave a list of benefits that a personal accident plan provides. However, there are several other costs and expenses which are reimbursed by the plan. Some of those are mentioned below in a bullet points’ list.
- Daily allowance for hospitalization: If an accident leads to hospitalization, a person can meet with some unexpected costs on a daily basis. There are some insurers out there who provide a daily allowance to meet those unexpected daily expenses. Cover for these unforeseen expenses can be provided by the insurer for 30 or even 45 days of hospitalization.
- Hospitalization expenses reimbursement: If the insured person ends up being hospitalized because of an accident, the insurance will reimburse several hospital expenses which include fees for nurses, fees for visiting doctors, charges for the room taken on rent, medical expenses, costs incurred for medical tests etc. The list of expenses that will be reimbursed by the insurer will be provided while purchasing a personal accident plan.
- Education benefits: Though it is present with almost every insurer, there are some insurers out there who do not provide this benefit. In this benefit, if the insured person dies, the insurer pays out a certain amount of money to the family of the insured so that the education of the dependent child(ren) can continue.
- Mortal remains transportation expenses: In this feature, if the insured person dies because of an accident, the insurer will pay a certain amount of money to the family of the insured person so that they can transport the mortal remains of the insured person.
Certain exclusions that you should be aware of:
There is a lot that has been included in the personal accident plan. However, there are some exclusions. Exclusions here simply mean that accidents under certain conditions will not be covered by personal accident plan. What is excluded from a policy will be properly communicated by the insurer, however, here is a general list:
- Injury inflicted intentionally: It may happen that the insured person inflicts injury on himself or herself. This deliberate act may lead to death, permanent total or partial disability, temporary total or partial disability, dismemberment, burns, cuts and broken bones etc. If the company (insurer) manages determine and prove that the injuries were inflicted by the insured on himself or herself deliberately, the insurer will not provide any coverage even though the insured person pays the premiums.
- Injuries inflicted during civil and / or foreign wars: War is a bad thing and everything gets destroy. People die and properties are damaged. In case of any war, whether civil or foreign, the insurer will not pay any coverage for death, permanent total or partial disability, temporary total or partial disability, dismemberment, burns, cuts and broken bones etc. to the insured if the insured person participates in war.
- Drugs or alcohol influenced injuries: In case the insured person meets an accident, which lead to death, permanent total or partial disability, temporary total or partial disability, dismemberment, burns, cuts and broken bones etc. of the insured person while he or she was under the influence of drugs or alcohol, the claim made by the insured or his or her family will not be honoured by the insurer.
- Accidents where two-wheelers above 150 cc are involved: In case the insured was using a two-wheeler, which had an engine above 150cc, at the time of accident, the insurer will not pay any claim made by the insured in the event of injuries as mentioned in the above points.
- STDs / HIV / AIDS: If any of the injuries (as stated above) were caused because the insured person suffered from STDs / HIV / AIDS, the insurer will not pay the claims made.
- Injuries inflicted while on duty of police / paramilitary / military: These are the types of jobs where the possibility of incurring such injuries is extremely high and the people getting into such jobs are very well aware of the fact that they will always be exposed to such risks. So, if a person (insured) joins such a service after opting for personal accident plan, the claims will not be settled by the insurer in case of such injuries.
- Past sickness and illness: Injuries of the nature mentioned above may be caused by past sickness and illness (that is a medical condition that already existed before the purchase of the policy), the insurer will not honour any claim made by the insured or the family of the insured.
- Claims because of child birth / pregnancy / other related conditions: This applies only in case of female policy holders. If the policyholder gets the aforementioned injuries during child birth, pregnancy or conditions which are related to pregnancy and child birth, the insurer will not pay the claims made. In order to get a coverage for such issues, the woman should ideally go for maternity insurance.
Senior Citizens Health Plans
Old age – it is something we cannot defy, something we cannot stop forever (at least, there is no such known technology for now, which can give eternal youth and eternal life). With old age, a number of health-related problems show up and visits to doctors’ chambers and hospitals increase manifolds. This means that medical care expenses for those who are earning members of the family also get high. Such expenses kind of break out of roof for people over 65 years of age.
As we know, people aged 60 and above are tagged as senior citizens and hence, insurance companies have come up with health insurance plans to address the medical needs of senior citizens. These specialized health insurance plans come with loads of benefits, which address some of the most vital aspects of old age like financial dependence, critical illness and more. Let us take a quick look at some of the most important features of Senior Citizens Health Plans:
- Cover provided for hospitalization charges, which include charges for room and medical bills.
- Facility of cashless hospitalization.
- Technological advancements-enabled Day Care expenses.
- Coverage for ambulance expenses.
- Insurers may cover pre-existing ailments.
- Medical tests are not conducted by some insurers for providing medical insurance to senior citizens.
- Coverage provided promises higher sum assured.
- Settlement is hassle-free and fast.
A few important things to remember while purchasing senior citizen health plans:
Purchasing a senior citizen health insurance plan is not easy. It is even more difficult compared to purchasing a health insurance for a young person. There are several reasons for the same. Here is a list of things you should remember while purchasing a health insurance plan for a senior citizen:
- DO NOT trust senior citizens with their own medical history: We are not saying that you should not trust your own parents but what we mean is that that senior citizens tend to forget things. Memory loss is pretty common among old people. So, if you are depending on your parents for their medical history while purchasing health insurance for them, you will be making a mistake. Providing thorough information about their health conditions and their medical history will help you to get the best possible health insurance, which covers every illness and potential illness that may pop up because of the existing ones.
- Comparing plans in important: Take it! Not every insurer will be an ace player in market and it is literally impossible to give a comparative study of all, where the comparison best suits the needs of the senior citizen for whom you are purchasing the insurance. Hence, you should yourself compare maximum possible health insurance plans from various insurers to find out which one caters best to the needs of your parent(s).
- Correct information in proposal form: Once you get the policy of your choice after comparing various policies, all you need to do is to fill up a proposal form. This form must have correct information. Incorrect information may lead to application rejection and you may have to settle for a less than perfect insurance plan for your parent(s).
- Medical check-ups may be conducted: As said earlier, some insurers may go for medical check-up even in case of senior citizens. Hence, if you are selecting an insurer of that nature, you need to make sure that you provide correct medical information. The insurer will appoint a doctor of its preference (remember that insurance companies have a panel of doctors) and conduct several tests like sugar, lipid profile, liver function, urine routine, serum creatinine, sonography for women, PSA for men, kidney function test etc. If the information you provide about the medical history of the intended insured person does not match the test results (that is, there is a huge deviation), the insurance company may decline the insurance application.
Myths surrounding senior citizen health insurance
There are a few myths floating around in market regarding the health insurance for senior citizens. Do not fall for those myths. Here is a quick list of myths and their corresponding debunking:
|It is sufficient to get a group insurance||Many people have a tendency to think that the group insurance (mediclaim) that their companies provide for their parents is sufficient. This is absolutely wrong. Such group policies often do not cover a wide spectrum of pre-existing illnesses and also exclude several expenses. The end result is that when the unfortunate time comes, the actual expenses soar so high that it becomes very difficult for people to handle the expenses.|
|Pre-existing health conditions will prevent availing health insurance||There are many insurers who will not provide cover for existing illnesses. There are some who will do. It is a common notion among people that pre-existing illnesses will render their parents ineligible for health insurance. However, there are various insurers who will provide cover for such illnesses as long as the illnesses are not critical.|
|Coverage is insufficient||Many insurers who provide cover for existing illnesses will have a waiting period for at least 4 years. Once those 4 years lapse, insurers will provide cover for the illnesses that already exist. However, even if the existing illnesses are not covered, the insurance will still provide necessary cover for new illness and hospitalization charges arising out of those illnesses.|
|Parents are healthy and they will stay healthy||It is highly possible that even though your parents are senior citizens, they are pretty healthy and fine. That’s possibly because they had access to organic healthy food during their childhood and their youth. However, because of age, their health can deteriorate any moment. So, if you are thinking that they will stay healthy forever, you are very wrong. You should buy health insurance for them.|
|Health insurances are too expensive||Yes, they are! Especially, if you are purchasing health insurance for your parents, they will be more expensive than the health insurance designed for young people. However, don’t hold the notion that every company will have policies designed for burning holes in your pocket. There are many companies which offer affordable and comprehensive health insurance plans for senior citizens without burning holes in your pocket.|
Family Floater Health Insurance Plan
If you think that taking individual health insurance plans for every member of your family will make you bankrupt, here is an alternative – Family Floater Health Insurance Plan.
What really happens here is that you buy a health insurance plan for yourself and then you pay one additional yearly premium to extend the total sum assured for multiple members of your family. This is particularly good when you think that members in your family are prone to illnesses and each one of them need some kind of insurance cover for their health problems.
Here are some of the key feature of family floater health insurance plan:
- This plan allows extending the sum assured to get multiple people in the family under cover of a single insurance plan.
- The members of the family who are covered by family floater can avail cashless hospitalization provided they manage to inform the insurer about the hospitalization within 24 hours from the time of hospitalization. However, the member(s) covered by family floater needs to go for one of the network hospitals. In case the person is admitted in a hospital which is not within the network of the insurer, the insured needs to pay for hospitalization first and then claim reimbursement.
- Room rent with a predefined cap can be availed under family floater for each single day of hospitalization.
- Family floaters usually operate using the method known as co-pay. This means that the insured and the insurer share the hospitalization cost. It is because of this; family floaters usually have low premium as the insured share cost.
- In case you are asking for a very high sum assured or in case one or more of the family members senior citizens or of higher age group or some have some kind of medical history, the insurer may order a medical check-up.
One of the most interesting features of the family floater is that there are several insurers who will allow automatic top up or restoration of sum assured once the sum assured is exhausted. The sum assured thus restore may be of the tune of 100%.
As far as the number of family members that can be included under a single floater insurance is concerned, there are some insurers who will allow addition of only spouse and children. There are some others which will allow inclusion of parents, siblings and other relatives.
When it comes to tax benefits, family floater health insurance allows tax benefits under section 80D. The amount of tax that can be saved is INR 15,000 if no senior citizen is covered and an additional 20,000 rupees if senior citizens are included. So, including senior citizens, total tax benefits stand at INR 35,000.
There are some exclusions that one needs to keep in mind
- Illnesses that are pre-existing will not be covered initially. There will be a waiting period after which they will be covered.
- If senior citizens are included after they have attended the age of 60, the premium to be paid is significantly high. However, if a senior person is included before attaining the age of 60 and later he or she attains 60 years of age, the coverage will be gained at lower premium and continued coverage will be provided for regular renewals.
- Childbirths will not be covered under usual circumstances. Some insurers have now started offering cover for childbirth as well as for new-borns who are just born.
- Treatments for nuclear attacks, suicide attempts etc. are not covered.
- Experimental treatment, congenital disease treatment, HIV / AIDS treatment etc. are not covered.
- Expenses which are non-medical by nature are not covered by the policy.
Critical Illness Plan
First thing first, what is critical illness. In context of insurance, critical illness is some type of pre-defined illness in which recovery takes a very long time and the treatment is usually very expensive. Such illnesses are very destructive by nature for both the patients and their families. Almost every insurer provides critical illness cover as a separate plan and hence, provide a safety net (financially speaking) to cope with extreme monetary pressure that people undergo.
Some of the diseases or illnesses which are defined as critical illness are:
- Kidney failure
- Bypass Surgery
- Organ transplant
- Heart attack etc.
Here are some of the key features of critical illness plans:
- There will be a 30-day grace period post-diagnosis (this however depends on the insurance provider). If the person diagnosed with a critical illness dies within these 30 days, no cover is given. If the person survives, coverage is give and so is the compensation for those 30 days.
- Sum assured is paid only after hospitalization. This money is paid out in lump sum.
- After a certain age limit has been attained, medical check-up becomes essential. This age limit is 45 years.
- Certain illnesses where Day Care facility is available, coverage is provided. For instance, dialysis can be performed within a few hours and hence, considered as Day Care.
- Pre-existing ailments will be covered only and only after a certain waiting period, which is usually 4 years for critical illness plans. In these 4 years, premiums should be paid out regularly.
- There are cashless hospitalization features available. However, the insured needs to be hospitalized only and only in network hospitals.
- Critical illness policy can be extended to direct blood relations like spouse, children, parents, siblings etc. However, different insurers will have different rules.
- Income Tax Act’s section 80D offers tax benefits for this insurance.
- Different insurers offer different riders, which can extend or improve the actual policy against a small cost.
- Claims for treatment of any illness which is not listed as critical illness by the insurer will not be entertained.
Group Health Insurance
This is a type of health insurance plan where an employer purchases a plan for all of its employees. There are some group insurance plans where the insurance cover is extended to the family members of the employees who are covered under group insurance.
Here are some of the key benefits or features of group health insurance are:
- Some insurers will offer boarding expenses apart in addition to other expenses like consultant fees, anaesthetist, surgeon, anaesthesia charges, charges for diagnostic materials, oxygen, dialysis cost, X-Rays etc.
- Cashless facilities are made available where the insurer settles the bills directly with the hospitals.
- Some insurers will offer maternity benefits.
- For a specific period, coverage for expenses before and after hospitalization are also offered.
- Cover for Day Care facilities are also offered. For example, tonsillectomy, eye surgery, chemotherapy, dialysis etc. are covered.
- Apart from hospitalization expenses, additional cover may be provided for some predefined critical illnesses.
- Domiciliary expenses may be covered by certain insurers.
- Upon payment of addition premium, pre-existing illnesses can be covered.
Why do companies offer group health insurance?
There are multiple reasons for this. Here are some of the reasons:
- Getting employee loyalty.
- Providing a sense of safety for employees.
- Reducing absenteeism.
- Increasing morale of employees.
- Enjoying tax benefits for providing group health insurance.
- It may be a statutory obligation for the company.
Some benefits of group health insurance plans
- Though co-payment is not ideal for people getting insurance, some insurers keep co-payment clause in group health insurance policies to reduce cost.
- A wide range of diseases are covered and critical illness cover can be gained by adding extra premium.
- Medical check-ups of the employees are not conducted and cover becomes applicable from day-one of employment.
- Pre-existing ailments are often covered.
- Previous medical history or age do not usually become a factor for denying health insurance to an employee.
Different health insurance companies in India
So far, we went through the basics of different types of health insurances available in India. Now it is time to take a look at the various health insurance companies that are operating in India. We will take a look at them in a tabular format. A table just makes things easy, that’s all!
|Company Name||Brief Details|
|Apollo Munich Health Insurance||This is a standalone health insurance company. It is a joint venture firm where two companies – Munich Health and Apollo Hospitals have come together to provide health insurance policies. The insurance company has teamed up with 4000+ hospitals in India to provide cashless hospitalization facilities. The company was formed in 2007 on August 8. 95% of the claims made are being settled by the company on a regular basis. This insurance company bagged the ‘Best Health Insurance Company of the Year’ award for year 2016.|
|BAJAJ ALLIANZ Health Insurance||A joint venture between Allianz SE and Bajaj Finserv Limited, this company has become one of the most trusted names in India when it comes to either Life Insurance or Health Insurance. The company started off by providing only Life Insurance but later entered health insurance market and garnered a large fan following because of excellent products and amazing claim settlement ratio.|
|BHARTI AXA Health Insurance||A joint venture between AXA and Bharti Enterprise, this company operates with 26% stake of AXA and 74% stake of Bharti Enterprises. The company started its nationwide operations back in 2008 and ever since then, the company has become one of the leading names in insurance industry. Within the first 365 days of operation, the company managed to bag two ISO certifications. Just in case you don’t know, ISO certification is considered to be a hallmark of quality in India.|
|Chola MS Health Insurance||A joint venture between Japanese company – Mitsui Sumitomo Insurance Group and Indian conglomerate – Murugappa Group, the Cholamandalam MS General Insurance Company Ltd. offers Personal Accident and Home Insurance, Travel Insurance, Health Insurance and Motor Insurance. Ever since its inception, the company has managed to become one of the most trusted names in world of health insurance. The company is known for maintaining transparency and trust and has a nation-wide operation.|
|CignaTTK Health Insurance||India’s TTK Group and USA’s Cigna Corporation joined hands together to offer health insurance in India. The company started operations in 2014 through it earned IRDA license in 2013. The company offers a wide range of health insurance plans for Indians, which are tailored to their needs. Protection is provided at various situations and various levels.|
|Future Generali Health Insurance||Italy’s Generali Group and India’s Future Group have come together to provide health insurance in India. However, the company is basically a general insurance company which works in the same areas as Chola MS Health Insurance. The company started its operations in 2006. Today, the company has become one of the most popular names in health insurance industry and has earned trust and reputation that the company proudly boasts of.|
|HDFC ERGO Health Insurance||ERGO International AG – an insurance entity of Munich Re Group and HDFC Limited of India have joined hands to provide health insurance in India. The actual company – HDFC ERGO General Insurance Company Ltd. has become India’s 4th largest company in general insurance industry. The company has received iAAA rating and ISO certification. iAAA rating is given by ICRA for outstanding claim settlement ratio. No doubt, the company has become one of the most trusted health insurance providers in India with a massive customer base.|
|ICICI Lombard Health Insurance||ICICI Lombard GIC Ltd. is India’s one of the largest general insurance companies in private sector. It is a joint venture between Canada’s Fairfax Financial Holding Limited and India’s ICICI Bank Limited. Basically, it is Lombard Canada Ltd. – a sister concern of Fairfax that teamed up with ICICI Bank. Both the companies are two formidable forces and since they joined hands together, they offer insurance products which can be trusted with diversity and features.|
|IFFCO Tokio Health Insurance||In 2000, on December 4th, the IFFCO Tokio General Insurance Company was incorporated. IFFCO is an Indian company which is an abbreviation for Indian Farmers Fertilizer Co-operative. On the other hand, is Japan’s Tokio Marine and Nichido Fire Group. The company gave outstanding performance and experience a massive growth between 2001 and 2011. Ever since then, the company never looked back. It has not only penetrated India’s urban sector but has also penetrated rural India more than any other private insurer operating in India.|
|L&T Health Insurance||L&T General Insurance Company Limited is a subsidiary of Larsen & Toubro Limited. The company doesn’t provide Life Insurance but works with Home Insurance, Corporate Insurance, Health Insurance and Motor Insurance. The company is known for its rural penetration with micro and rural insurance schemes but it also operates in the urban sectors of India. The strong financial background of the mother company has earned its insurance wing quite some reputation and seekers of health insurance.|
|Max Bupa Health Insurance||Max Bupa Health Insurance is a joint venture between Bupa Financial PLC of UK and Max India Limited. This insurance company is a standalone insurance company. The company aims towards becoming India’s most preferred health insurance company and hence, believes in excellent customer service, thereby maintaining amazing relationships with its customers.|
|National Health Insurance||Owned by Central Government of India, National Insurance Company Limited offers National Health Insurance to Indians. The company was established back in 1906 and is headquartered in Kolkata. However, the company was nationalized back in 1972. The company has maintained a steady growth rate and definitely, it is the oldest domestic company to provide general insurance in India. The company is known for offering flexible products and is currently operational in Nepal as well. Economic and social inclusion of Indians is one of the core objectives of the company.|
|New India Health Insurance||New India Health Insurance is a part of New India Assurance Co. Ltd. The company was founded back in 1919 by Sir Dorabji Tata and it has since grown into a multinational company with operations in 22 different countries. Today the company is 100% government owned. Health insurance is just one of the many general insurances offered by the company, which has developed well over 160 products. CRISIL has given the company AAA/Stable rating, which reflects the financial strength of the company and its ability to settle claims.|
|Oriental Health Insurance||Oriental Government Security Life Assurance Company Ltd’s wholly owned subsidiary – the Oriental Insurance Company Limited started back in 1947. Today, the company is one of the largest insurance companies in India and has representations in various other international markets like Dubai, Kuwait, Nepal etc.|
|Reliance Health Insurance||A part of Reliance General Insurance, Reliance Health Insurance is a private company owned and operated by Reliance Group. Today, the company has presence in 102 Indian cities. The company not only caters to individual customers but also to corporates, small businesses and medium businesses. Apart from health insurance, the company also provide insurance cover for home, travel, motor etc.|
|Religare Health Insurance||Religare Health Insurance Company Limited is made up of three parent businesses – Religare Enterprises Limited, Corporation Bank and Union Bank of India. All three of them are Indian and hence, the insurance company has no foreign stake in it. These three trusted names have helped to drive Religare Health Insurance to the top of Indian health insurance space and today, it strives to become one of the most trusted health insurance companies in India.|
|Royal Sundaram Health Insurance||Royal Sundaram Alliance Insurance Company Limited became India’s privately owned general insurance company. The company earned its operational license back in 2001. Apart from catering to individual customers, the company also caters to the needs of small business, medium businesses and rural customers. Royal Sundaram pioneered many services in health insurance industry, which are today followed by every other company as a rule carved on rocks. For instance, the concept of cashless claims was first introduced by this company. The company services 5 million customers, which itself speaks of the success of the company in field of health insurance.|
|SBI Health Insurance||Everyone knows the name – State Bank of India. SBI General Insurance Company Limited is a joint venture between Insurance Australia Group and State Bank of India. SBI holds 74% of the stake in company while the IAG holds only 26%. Health insurance is a part of the various types of insurance services provided by the company. The company has earned its reputation because of the iconic stature of State Bank of India.|
|Star Health Insurance||Star Health Insurance is provided by Star Health and Allied Insurance Co Ltd. It is basically a joint venture between UAE’s Oman Insurance Company and…guess who? Well, the others involved in the company are leading NRIs and an Indian company which was actually created by several business tycoons for the sole purpose of creating the Star Health and Allied Insurance Co Ltd. The company has 6000+ hospitals in its network for providing cashless benefits. However, it is the claim settlement ratio which has earned the company its good will and reputation.|
|TATA AIG Health Insurance||TATA AIG General Insurance Company Limited is a joint venture between AIG or American International Group and India’s iconic TATA Group. TATA AIG General Insurance Company Limited started its operations back in 2001. As per IRDA regulations, TATA owns 74% of the stake in company while AIG has 26% stake. The company services both corporates as well as individuals. It has managed to become one of the most prominent names in India’s general insurance market.|
|United India Health Insurance||The Government of India owns United India Insurance Company Limited. Providing only non-life insurance, the company has garnered enough operational experience from over 70 years of existence. The Networth of the company stands in excess of INR 5,300 crores. The company was formed back in 1938 and then it was nationalized in 1972. The company has 1 crore clients. The company has excellent claim settlement ratio.|
|Universal Sompo Health Insurance||Universal Sompo General Insurance Company Limited is a joint venture between Karnataka Bank, Allahabad Bank, Indian Overseas Bank, Dabur Investments and Japan’s Sompo Japan Insurance Company. The company started its operations back in 2007. Sompo Japan Insurance is a Fortune 500 company and hence, the Universal Sompo General Insurance Company Limited benefits from the knowledge and brand equity. The company caters to the needs of corporates, individuals and small and medium enterprises in India. Despite the brand equity of Sompo and other companies in the group, the insurance company has not performed well in terms of claim settlement ratio, cashless treatment and even customer service.|
This concludes our long article on health insurance. Remember, it is only a general article and we didn’t explain everything in details as it is literally not possible to describe everything under the sun in a single article. Stay tuned for more articles on health insurance and independent company reviews. Until then, if you have any questions or remarks, feel free to drop your messages. We will try to reply as soon as possible.
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