What is Health Insurance? Health Insurance Benefits & Features

A recent survey has shown that more Indians between the ages of 18 -35 are buying health insurance. It was further discovered that as many as 77 per cent of survey respondents have opted to invest in comprehensive health insurance policies for themselves and their families.

However, if you’re among the remaining 30 % of the population considering a policy, you might be asking, “What does health insurance cover?” Keep reading as we answer that pertinent question as well as take a look at the most significant health insurance benefits.

What is Health Insurance?

Defining Health Insurance

Health insurance can easily be defined as the type of insurance that covers a broad spectrum of medical expenses related to injury or illness. For the most part, health insurance features coverage for the following:

• Doctors/practitioners/specialist fees
• Hospitalisation fees
• Cost of medicines

Why We Need Health Insurance

The last few years have made it more crucial than ever for people to invest in adequate health insurance plans. Not only has there been a global pandemic to contend with, but illnesses such as heart disease, diabetes and cancer have become more prevalent. That said, let’s review the top reasons to take care of your family’s health insurance needs.

1. To Fight Lifestyle Diseases
   According to WHO, non -communicable diseases or NCDs, of which lifestyle diseases are a part, claim 41 million lives annually, which is over 70% of all deaths across the globe. Of these, over 15 million deaths occur among people in the age band of 30 to 69 years. In India, NCDs claim 6 million lives.
2. To Safeguard Your Family
   No one wants their family to be in a position where they can’t receive the medical care they might need. Investing in an adequate health insurance policy that covers your spouse, children and even your parents is the best way to ensure that they will receive the care they need in the event of illness or an accident.
3. To Counter Inadequate Insurance Cover
   Many people already have some coverage in the form of their group insurance from the organisations they work for. However, it’s no secret that these covers might not be sufficient to cover severe illnesses such as cancer or heart disease. To prevent being in this situation, insurance brokers recommend adding additional health insurance plans to your existing medical portfolio.
4. To Deal With Medical Inflation
   As with everything else, the cost of medical care is also rising. This includes the costs of doctor’s appointments and medicines. With that in mind, a more comprehensive health insurance policy will help you counter the cost of inflation.
5. To Protect Your Savings
   Anyone who has ever experienced a medical emergency will agree that it can cause severe financial strain on an existing savings plan. It takes one accident or illness diagnosis to completely deplete a savings plan that might have taken years to build up.
6. Insure Early to Stay Secured
   To ensure that your policy builds up the required amount over time, it’s important to invest in a health insurance policy well in advance. Since there is no way to know when you or a family member will get ill, it’s always better to invest in a quality plan as early as possible.

How Health Insurance Works

What Does Health Insurance Cover?

Different types of health insurance plans may provide a broad range of different coverages. Essentially it all depends on the type of policy you have opted for. However, the basic features that are covered by most plans include the following:

• Doctor/practitioner/specialist appointments
• Hospitalisation
• Diagnostic test fees

Who Needs Health Insurance Plans?

The criteria for an individual health insurance plan is that the policyholder is at least 18 years of age. In instances where an individual already has Group Health Insurance from their employer, it’s wise to consider additional protection that covers critical illness.

Categories of Health Insurance Plans

Individual Health Insurance

For the most part, Individual Health Insurance plans can be bought by a policyholder for themselves, their spouse, their children or even ageing parents. With this policy, you can expect:

• Total control over the type of policy you need
• Additional cover can be included at a later date in the form of add-on riders

Family Floater Health Insurance

Family floater health insurance plans are commonly known as “family health insurance plan” and provides coverage for the insured’s whole family under a single plan. The sum insured under this plan “floats” over the whole family until any of the insured members requires it.

Unit Linked Health Insurance

Essentially, a Unit Linked Health Insurance Plan (ULIP) is a policy that offers a combination of insurance and investment payouts. The policyholder will have to make regular premium payments that cover both the insurance coverage as well as the investment. Generally, the ULIPs are paid out to beneficiaries following the death of the policyholder.

Defined-Benefit Plans

Critical Illness Plan

Since cancer, diabetes and heart disease are among the top illnesses in India, investing in a Critical Illness Plan should form part of everyone’s health insurance needs.
A Critical Illness Plan covers the insured against a range of life-threatening critical diseases such as renal failure, cancer, diabetes and cancer. Essentially this policy works by providing a lump sum coverage that can assist in covering the high medical expenses that go along with treating critical illnesses.

Hospital Daily Cash Benefit Plan

A Hospital Daily Cash Benefit Plan involves specifying an amount in the policy that will be paid out in the event of hospitalisation. That means that the insured will receive the pre-determined amount for each full day that the person is hospitalised. Verify whether or not it’s from the first full day as some policies only offer this feature from the third full day.

Personal Accident Plan

For the most part, a personal accident plan is designed to assist a policyholder or insured member if they are hospitalised or have become disabled or injured. This plan also covers death from an accident. This type of plan can be added to your current health insurance plan.

Types of Health Insurance Plans in India

Individual Health Insurance

Features of Individual Health Insurance

• Policyholder can choose the health insurance company
• Specific type of cover can be chosen to include spouses, children and parents
• Additional cover can be added later by opting for an add-on rider

Benefits of Individual Health Insurance

• Cover can be amended to suit personal health needs
• Policy isn’t tied to a specific employer and remains active into old age

Family Floater Health Insurance

Features of Family Floater Health Insurance

• Family cover under the health benefit
• Built-in terminal illness rider
• In-patient hospitalisation covered for all insured for a maximum of 30 days
• Post-hospitalisation for a maximum of 60 days

Benefits of Family Floater Health Insurance

• All family members on the policy are covered by the floater and it remains available until a member needs it

Senior Citizen’s Health Insurance

Features of Senior Citizen’s Health Insurance

• The Senior Citizens Health Plan offers pre-existing illness coverage after one year
• Coverage for in-patient hospitalisation
• Reduced waiting period for pre-authorisations

Benefits of Senior Citizen’s Health Insurance

• Cashless claim facility
• Senior citizen discounts on certain procedures
  

Critical Illness Insurance

Features of Critical Illness Insurance

• Critical Illness Insurance offers additional health cover
• Covers a wide range of critical illnesses such as cancer, diabetes and heart disease
• Tax benefits apply
• Affordable premium
• Pre-existing conditions are covered

Benefits of Critical Illness Insurance

• Additional coverage to make up for the shortfall in an existing health plan
• Covers critical illnesses that regular health plans may not cover
• Flexibility enables Sum Assured to meet varying health cost needs

Group Health Insurance

Features of Group Health Insurance

• Group Health Insurance serves full coverage at a reasonable rate
• Insured has 4 rider options to choose from
• Accelerated Benefit Option available
• Accelerated Benefit Option available

Benefits of Group Health Insurance

• Tax benefits are available to the employer
• Flexible payment modes
• Employee and their family are immediately covered

How to Choose a Health Insurance Plan

With so many different health insurance plans available currently, it can be somewhat overwhelming to choose the right option. This is especially the case if it’s the first time you’re choosing health insurance coverage. Fortunately, we’ve compiled a list of the top factors to consider. In the process, you’ll make finding the right health insurance easy.

1. Protection Against a Large Number of Critical Illnesses
   It’s important to note that not all healthcare plans offer the same types of coverage. That said, the most significant factor to review when you’re comparing healthcare plans is how many critical illnesses are protected.
   The last thing you want to experience is that a member of your family becomes ill with a disease that isn’t covered by a plan that you have been paying for months or even years. Check for plans that offer critical illness coverage as this will include all types of cancer as well as heart disease.
2. Flexibility to Choose Your Health Cover
   With the Group Cover on offer from your employer, it won’t be possible to choose the type of health insurance plan. It’s, therefore, crucial to ensure that the individual health insurance you opt for allows you to choose the cover and add-ons you can add to your healthcare plan. Doing that will provide you with optimum coverage.
3. No Increase in Premiums During the Policy Term Even if Your Health Condition Changes
   Wherever possible, always opt for a fixed premium that won’t change if you are your loved one’s health condition changes. To get an accurate overview of different health insurance company premiums, use the health insurance calculator. Essentially, this calculator is an online tool that helps you compare the costs of different healthcare premiums from a variety of companies.
4. Long-Policy Term That Covers You Even in Your Old Age
   If you’re opting to only rely on the Group Cover from your employer, it’s crucial to be aware that this cover ends when you go on retirement. This is regardless of the number of years you have been paying the premium.
   With that in mind, it’s always recommended to get a health insurance policy that will cover you for the duration of your life. This is necessary if you‘re including elderly parents.
5. Large Hospital Network for Easy Access to Medical Treatment
   Another factor that not all health insurance plans offer is the same access to medical care. While you might have the protection of healthcare, you might be limited to specific doctors, specialists and hospitals.
   This can be inconvenient if the hospital or doctor your plan authorises isn’t near where you live. Always opt for a plan that covers a large network of hospitals and practitioners.

Things to Consider When Buying Health Insurance Policy

When you’ve narrowed down potential health insurance policies, there are two key factors to consider that will help you choose the best policy for your medical requirements.

Tax Benefits of Health Insurance

It’s no secret that one of the most significant factors that assist potential policyholders in choosing one plan over another is the type of tax benefits on offer.
Fortunately, India falls under the Section 80D tax law that enables policyholders to receive a portion of their premiums back. This reduction in an individual’s tax liabilities is a huge swaying factor.

Eligibility Criteria to Buy Health Insurance

Always check the qualifying criteria of a specific type of health planning. This can vary between plans, but generally, the two major factors are:

• The policyholder should be 18 years of age
• An assessment of pre-existing medical conditions (such as diabetes, epilepsy and heart conditions)

Most potential health insurance plans don’t require medical examinations for anyone under the age of 45 but this may vary between different policies.

Conclusion

Health insurance is a crucial part of taking care of your and your family’s health needs. Understanding the benefits of the different options will help you choose the best health insurance plan!