Types of Health Insurance

If the pandemic has taught us anything, it is that life is uncertain, and sudden medical expenses can burn a huge hole in your pocket. With the ever-increasing costs of medical treatment, opting for a sound health insurance policy can help you financially safeguard yourself and your family in tough times. Fortunately, insurance companies offer a very large variety of health insurance plans at a range of prices that can suit the needs of different demographics. Over the course of this article, we will look into the various types of health insurance policies in India.

Important Update (Dated May 30, 2024) – Good news for Health Insurance policyholders! According to the Master Circular on Health Insurance Business 29052024 rolled out on May 29, 2024 by IRDAI, insurers are to decide on the request for cashless claims within 1 hour of receiving the request. Also, the final claim is to be granted within 3 hours after the policyholder’s discharge from the hospital. Insurers have been directed by IRDAI to establish necessary systems and procedures for this process by July 31, 2024.

 

The Master Circular on Health Insurance Business 29052024 circular is available here - https://irdai.gov.in/document-detail?documentId=4942918

11 Types of Health Insurance Plans

Investing in the right type of health insurance plan is a secure form of safeguarding yourself from the ever-increasing medical costs and can protect you from financial insecurity in times of medical emergencies. By paying nominal premiums over a course of time, when insured, you can create a cache of funds to pay for unforeseen medical expenses for yourself and your family. Health insurance plans are broadly divided into two categories: 

 

Now, let’s try and understand the different types of health insurance plans available in the market. 

1. Mediclaim Insurance

Mediclaim is a form of health insurance that compensates you for all expenses related to treatment for a specific medical condition. Offering benefits for a wide range of diseases, this form of insurance can cover both you and your family. Mediclaim plans also come with the additional benefit of tax rebates on the annual premium paid.

Features

• In-patient medical costs, including doctor’s consultations, oxygen expenses, surgeries, and nursing, are covered

• It can be accessed through a group medical claim, individual health insurance, overseas health insurance, etc.

2. Individual Health Insurance

An individual health insurance policy refers to a health insurance policy that only covers a single person, be it you or someone else. This policy will provide coverage to you/individuals for costs pertaining to hospitalisation, surgery, daycare, and so on. The major benefit of this form of insurance is that it covers the medical needs of an individual quite adequately.

Features

• A single individual is covered

• The sum insured is individually availed

• You are protected against injuries, diseases, in-patient care, surgeries, etc.

3. Family Floater Insurance

If you are looking for affordable health insurance for all the members of your family, this is the go-to plan, offering insurance for all members of the family under a single insurance sum. With the possibility of covering not only yourself, but your children, spouse, and even parents, the premium offered on family health insurance policy is relatively cheaper as compared to Individual coverage.

Features

• The sum insured by the policy is distributed among the beneficiaries

• It covers you and your family against hospitalisation expenses, surgeries, daycare treatment, and so forth.

4. Senior Citizens Health Insurance 

Senior Citizen health insurance is designed specifically for senior citizens, i.e., those above the age of 60, and offers compensation for costs pertaining to medication, hospitalisation, and treatment. This form of insurance also offers additional benefits of psychiatric treatment, domiciliary hospitalisation, critical illness cover and so on.

Features

• The premium amount for a senior citizen plan is higher compared to an individual or family floater plan because elderly people require frequent medical assistance

• Your pre- and post-hospitalisation expenses, medical emergencies, domiciliary care, and pre-existing diseases subject to a waiting period are covered.

5. Unit Linked Health Plans

Unit Linked Health Plans are an amalgamation of both health insurance and investments. This form of health insurance ensures that even if you do not make a claim during the policy term, a portion of your premium payments is saved and invested.

Features

• Here, the premium you pay also helps you create wealth

• ULIP offers life coverage and secures your family when you are not around

• Your insurance provider rewards you for continuing with your investment

6. Critical Illness Plans 

Critical Illness Plans are designed to offer compensation against diseases and illnesses such as cancer, stroke, paralysis, kidney failure, heart attack, multiple sclerosis, and so on. Given that treatment for these diseases often comes at a hefty cost, this plan ensures that as soon as you are diagnosed with any of these illnesses, a predetermined amount is paid to you.

Features

• If you are diagnosed with a critical illness, a lump sum amount is paid for your treatment

• Lifelong policy renewal

• Many plans provide health checkups annually

• Once the insurer has paid the lump sum amount to you, the plan is terminated

7. Personal Accident Plans

As per personal accident insurance, in the unfortunate event of your death or disability due to an accident, your nominee will be paid a lump sum amount. This helps protect your family and loved ones against financial insecurity in the unfortunate event of you meeting with an accident.

Features

• Accidental cover

• Partial or complete impairment caused by an accident

• If the insured dies or becomes completely disabled as a result of an accident, a lump sum payment is made to the nominee. 

8. Hospital Daily Cash Plan

This is an insurance policy that pays you a fixed sum for each day of hospitalisation that exceeds the 24-hour mark. Essentially, it offers you a daily allowance, to meet hospital-related expenditures. You can opt for this as a basic plan, or even choose to use this as an add-on cover.

Features

• The hospital expenses are not predefined or fixed

• During a medical emergency, the insured is paid ₹500-₹10,000 as a daily cash advantage to meet the everyday expenses as per the agreement

• Recovery benefits are also provided in many policies

9. Disease Specific Insurance Plans

These types of insurance plans are built to protect against certain specific types of diseases. People that are susceptible to certain diseases should consider buying these plans. For example, people who are immunocompromised and are at risk from COVID-19 can consider buying COVID-19-specific insurance. 

Features

• Consumable protections such as PPE kits, masks, gloves, and so on

• Individual and family floaters are available.Health insurance coverage

• single premium payment

• There is no plan renewal.

• AYUSH cover

• Pre- and post-hospitalisation cover

10. Group Health Insurance 

A group health insurance plan is a type of policy that offers health coverage to a large group of people. A company or organisation providing health insurance to all its employees or members is an example of group health insurance. Group plans are the best type of health insurance policy for organisations as they bring down premium costs significantly. 

Features

• There is no waiting period

• Maternity, daycare treatment, and OPD is covered

• You can also increase the sum insured if needed

• Medical protection for the employee and their spouse

11. Top Up Health Insurance

A top-up health insurance is a type of add-on plan that extends the sum insured of your basic health plan. For instance, if you have a health insurance policy with a sum insured of ₹10 Lakhs, you can buy top-up health insurance of ₹10 Lakhs and thus extend your total sum insured to ₹20 Lakhs. 

Features

• You can opt for greater sum insured value on your base plan

• At an affordable rate you can enhance the sum insured and safeguard your finances. 

12. Indemnity Plans

Indemnity plans refer to health insurance plans that compensate the policyholder for the entire sum of medical expenses – offering to reimburse you for the actual expenses incurred during treatment and hospitalisation. Post the compensation, any balance amount in the policy will be set aside for future claims under the tenor of the policy. These plans come with a pre-fixed deductible, which is paid by the policyholder for any hospitalisation expenses, while the remainder is paid by the insurer, till the sum insured is exhausted.

Features

• The maximum health care expenses are covered as per the sum assured value

• The policyholder can make numerous claims against your health insurance plan, the expenses will be covered up to the selected sum insured. 

13. Defined Benefit Plans

As opposed to an Indemnity plan, a defined-benefit health insurance plan will ensure pay-outs for a prescribed sum, on an insured event. These plans are generally opted for to supplement indemnity plans.

Features

• The pre-decided sum insured is paid out at the time of the diagnosis after which the policy comes to an end

• The plan can be an add-on or a base plan.

Top Health Insurance Plans

There are endless companies with uncountable health insurance policies. And when you have so many options it really gets challenging to choose one. Here is a list of a few top health insurance plans,

Why is Health Insurance Crucial?

It is so terrifying to live in a world where nothing is permanent and no one knows what will happen next. During the global outbreak of COVID-19, we understood how susceptible we are to the potentially fatal environmental factor. Additionally, it reiterated how crucial health insurance plan is.

 

Even if a single member of the family is ill and needs hospitalisation, it is a terrible time for the entire family. No matter how old you are, you may need medical help at any point in your life; hence, given below are the reasons stressing the importance of health insurance plans,

• Expensive medical expenses

The more advancement you see in medical technology, treatment procedures, and efficient tools, the more expensive medical expenses are. You understand that healthcare expenses do not just end with hospitals; there are also plenty of other expenses that are rising, such as consultation charges of the doctors, diagnosis, ICU expenses, medicines, ambulance expenses, room rents, and the list never ends.

Dealing with these expenses without health insurance is nearly impossible; the level of financial strain you will experience hindering your savings is terrifying. Hence, it is crucial to get yourself and your family covered with an appropriate health insurance plan.

• Save yourself and your family

Elderly parents frequently require medical help because of their age and weak immune system, making them more vulnerable to diseases. To make sure they get the perfect treatment facilities on time without financially pressuring you, you must opt for a health insurance plan with comprehensive coverage.

• Financial stability

When you opt for a health insurance plan covering yourself and your family, your insurance provider covers the maximum cost of pre- and post-hospitalisation, ambulance charges, in-patient care, diagnosis tests, daycare treatment, room rent, organ donor expenses, critical illnesses, and so on. Healthcare expenses can be expensive. If you have a health insurance plan, you will not have to bear all the expenses out of your own pocket, allowing you to keep your savings intact and providing you with greater financial stability in life.

• Overcome lifestyle diseases

Today, diseases are no longer limited to elderly people, even young individuals are vulnerable to diseases because of unhealthy lifestyles, increasing pollution, stress, habits, gadget addiction, etc. People below the age of 46 have diabetes, respiratory diseases, cardiac problems, and more. Earlier these diseases were more common among elderly people.

 

No matter how careful you are, an unfortunate emergency can put you in a challenging situation, hence, opt for a health insurance plan with wider coverage.

• Sufficient coverage

When selecting health insurance plans, it is critical that you carefully read the terms to understand what it protects you from and what the sum insured and sub-limits are. If you bought a plan with basic coverage, it will be of little use, and you will end up paying expenses out of your pocket. With the constant rise in medical costs, you should opt for a higher sum insured policy. In case you are not able to afford a high sum insured, you can choose a plan that fits your budget and, later, when you feel you can afford it, you can renew your health insurance plan with a higher sum insured value.

Things to consider before purchasing a Health Insurance Plan

Here are some factors that you must consider before purchasing a health insurance policy:

1. Age

One of the essential elements of a health insurance policy is the age of the individual. Your premium amount is derived based on your age. Suppose you bought a family floater health insurance plan, most of the premium amount will rely on the age of the eldest member. Also, certain policies have a minimum entry and exit age.

2. Premium amount and coverage

We often hear that policies with the lowest premiums are likely to offer lower coverage. However, it's not always true. There are policies that you can purchase at very affordable premiums that offer extensive coverage. Hence, choose a health insurance plan that offers wide coverage and a higher sum insured at affordable prices.

3. Waiting Period

The waiting period is the timeframe during which you cannot file a claim. During this time period, your insurance company will not accept any claims for pre-existing diseases. Once the waiting period of your health insurance plan is over, the cover is activated. According to the agreement, this waiting period will last between 24-48 months. Hence, always look for a health insurance plan with a lower waiting period.

4. Right insurance provider

The company you are choosing to invest in for your health insurance plan is a major aspect. Hence, choose a plan with better goodwill, positive reviews, the highest claim settlement ratio, etc.

5. Early health insurance

If you are young and you feel you don’t need health insurance, you are completely wrong. Purchasing a health insurance plan at a young age can provide you with enormous protection for a very low premium.

6. Alternative treatment option

Choose a health insurance plan that includes alternative treatment options and is not just limited to allopathic treatments. Alternative treatment includes Ayurveda, Yoga, and Naturopathy, Unani, Siddha, and Homeopathy, which is AYUSH treatment. The Ayush treatment grabbed a lot of people's attention during the outbreak of COVID-19.

7. New-age treatments

Medical advancement is remarkable. Modern treatment procedures, such as robotic surgeries, stem cell therapy, etc., are more precise and result-oriented compared to the old treatment options. Hence, choose a policy that covers new-age treatment options.

8. Co-payment

Sometimes people skip this term because it's confusing. In simple words, it is a percentage or fixed amount that you need to bear against your claim, and the rest will be taken care of by your insurance provider.

Hence, always ensure to check if there is any co-payment clause in your policy; if yes, then what percentage? It will be beneficial to choose a plan with no co-payment clause at all. However, for elderly people and those who have pre-existing diseases, it is a mandatory clause.

9. Network hospital

Choosing an insurer with a large hospital network is a good idea. It can help you with cashless treatment, leaving no financial burden on yourself at all.

10. Specific illnesses cover

Many insurance companies do not provide coverage for specific illnesses. However, certain providers offer coverage against specific diseases like piles, hernias, fistulas, etc. after a fixed period. Look for an insurer that offers protection against specific illnesses.

11. Inclusion and exclusions

What is covered by a policy and what is excluded is a significant aspect. Having a clear understanding of the inclusions and exclusions of the health insurance plan you are going to purchase is important and should not be taken lightly. If not, you will end up paying for medical expenses, making big holes in your pocket.

12. Pre and post-hospitalisation

Almost every health insurance plan protects you against expenses incurred during the hospitalisation; however, a policy that protects you prior to and after the hospitalisation is beneficial. Hence, choose a plan that covers pre- and post-hospitalisation expenses, diagnostic tests, doctor’s consultation fees, ambulance expenses, etc.

13. No claim bonus

For every year without a claim, you are rewarded with a 10% increase in the sum insured under your health insurance by your health insurance provider. Many insurers apply a cap on the no claim bonus. Hence, always read the terms and ask questions of your health insurance plan if you are not clear about something.

14. Seamless claim procedure

A seamless claim process is just amazingly awesome. When you do not have to reach, call, or connect with your insurance provider for the same claim, it is an extraordinary feeling. It also saves you time. Hence, read the agreement carefully, understand how the claim process works, read the customer’s reviews, and check for the claim settlement ratio before you purchase the health insurance plan.

Health Insurance Plans Available at Bajaj Markets