The Health Insurance Guide

Healthcare in India faces a lot of challenges and growth issues. Being an extremely populous country having low per capita income, spending on healthcare is not considered vital. The awareness and reach of health insurance are also limited as most of the people remain ignorant about the rising cost of medical expenses and how a medical emergency can drain the whole life savings of individuals. Health insurance queries have increased considerably during the past few weeks mainly due to Covid pandemic. Here in this post today we try to give you an insight into health insurance.

Health Insurance is a contract between the insured party (can be more than one person) and the company to cover health expenses. The insured has to pay a premium and abide by various terms and conditions mentioned in the policy.

Types of Health Insurances

• Individual Plan

The policy covers expenses of a single individual. Other family members can be added by paying extra premium. In this policy, sum insured is different for each family member based on factors such as age, location and gender of individuals. One benefit of this plan is that if claim is filed for one individual of family, it doesn’t affect the sum insured of other members.

• Family Floater Plan

The whole family is covered under one plan by paying a single premium under this plan. Usually, the premium here is based on the number of members and age of the eldest family member.

• Hospital Daily Cash Benefit Plan

This plan offers a fixed lumpsum amount for per day hospitalization cost. For example, as per your policy, Rs. 5000 is your daily hospitalization limit; you will receive that amount, even if the cost incurred is Rs. 2000. This plan can be bought as an add-on to a comprehensive health insurance policy or as a standalone plan.

• Critical Illness Plan

This plan covers life threatening conditions such as cancer, kidney failure, paralysis, heart diseases etc. In such cases, the sum insured is paid in lump sum to cover all the related expenses such as doctor visits, tests etc. This can also be taken as a rider.

• Group Health Insurance Plan

Such insurance is provided by the employer to its employees. These policies are not that extensive and are terminated once you leave the organization. 

Major INCLUSIONS in a Health Insurance Policy

The most important query of any health insurance is about the inclusions of such policies. A health policy usually covers expenses incurred on:

• Room, nursing, boarding (with or without capping)
• Fees of doctors, surgeons, consultants, specialists, etc.
• Test costs, X-ray, dialysis, therapies, etc.
• Pre and post hospitalization expenses (for a specific period)
• Cost of daycare treatments
• Treatments done using alternative medicines (AYUSH treatments)
• Other similar expenses

The extent of coverage differs from plan to plan and hence it is very important to deep dive on major inclusions that the plan offers you. Insurance companies offer cashless facilities at network hospitals wherein you need not pay the expenses that are covered in the policy and the hospital gets direct payment from the company. In case you go to a non-network hospital then you need to file a claim, pay to the hospital, and then take reimbursement. Look for a company that has the hospital nearest to you included in its network list. 

Major EXCLUSIONS in a Health Insurance Policy

Health insurance policies don’t cover any and every type of health expenses. A certain set of exclusions should be kept in mind.

• Pre-existing diseases are not covered for a specified period from the date of inception (mostly 3 years)
• Treatment-related to pregnancy or childbirth including cesarean (some plans cover after a waiting period)
• Dental surgery that does not require hospitalization
• Cost of specs, hearing aids, contact lenses
• In the first year of the policy, any claim for cataract, hernia and other such diseases are not considered. 
• Naturopathy treatment
• Other exclusions that may be mentioned in your policy contract

Tax Benefit

Health Insurance policies come with attractive tax benefits as an added incentive. Under section 80D annual deduction of Rs. 25000 for the payment of premium of self, spouse, and dependent children is available. In case of senior citizens, the deduction limit is Rs. 30000. Additional deduction of Rs. 25000 is allowed for premium payment made on behalf of parents, it can go up to Rs. 30000 if parents are senior citizens. So a person can save tax of up to Rs. 18,000 by availing health insurance for self and parents.

Health insurance is one of the important products that should be there in your basket. It is extremely necessary in such times of surging medical costs and increasing ailments. To know further details about various health insurance plans, feel free to contact us at finriseinvestment@gmail.com or call us at +91-8568953926.