The health insurance policy is a type of insurance policy that covers your medical expenses in case of sickness or accident. A health insurance policy is a contract between an insurer and an individual /group in which the insurer agrees to provide specified health insurance cover at a particular “premium”.
Every individual should buy health insurance and for themselves and members of their family, based on their requirements. Buying health insurance protects individuals from the sudden, unexpected costs of hospitalization (or other covered health events, like critical illnesses) which would otherwise make a major dent into household savings. Each person is exposed to various health hazards and a medical emergency can strike anyone of us without any prior warning. Healthcare is increasingly expensive, with technological advancements, new procedures and more effective medicines that have also driven up the costs of healthcare. While these high treatment expenses may be beyond the reach of many, taking the security of health insurance is much more affordable.
Today the Health insurance industry is flooded with various options to choose from. Under a vanilla Indemnity Plan Sum insureds ranging from Rs 5000 in micro-insurance policies to even a sum insured of Rs 50 lakhs or more in certain critical illness plans are being offered to individuals. Most insurers offer policies between 1 lakh to 5 lakh sum insured. Also, while most non-life insurance companies offer health insurance policies for a duration of one year, there are policies that are issued for two, three, four and five years duration also. Another product, which is the Hospital Daily Cash Benefit policy, provides a fixed daily sum insured for each day of hospitalization. A Critical Illness benefit policy provides a fixed lumpsum amount to the insured in case of diagnosis of a specified illness covered under the policy or on undergoing a specified surgery. There are also other types of products, which offer lumpsum payment on undergoing a specified surgery (Surgical Cash Benefit), and others catering to the needs of specified target audience like senior citizens.
The individual must read the prospectus/policy wordings (terms and conditions) to understand what is covered and not covered under the plan opted for. Generally, pre-existing diseases are excluded under a Health Insurance policy for the first 3-4 years. There would generally be certain standard exclusions such as cost of spectacles, contact lenses and hearing aids, dental treatment/surgery, congenital defects, intentional self-injury / suicide, use of intoxicating drugs/alcohol, AIDS, treatment relating to pregnancy or child birth. Please read the policy terms and conditions.
Age is the most important factor that determines the premium, the older the person is, the premium cost will be higher because older persons are more prone to illnesses. Previous medical history is another major factor that influences the premium. If no prior adverse medical history exists, premium will automatically be lower. Claim free years also come with certain percentage of discount on premium.
Some health insurance policies pay for specified expenses towards general health check up once in a few years. Normally this is available once in four years and is mainly offered as a value add to their corporate customers.
Insurance companies, through Third Party Administrators (TPA’s) have arrangements with several hospitals all over the country as their network to offer cashless treatment for individuals. This means that the insured can get treatment without having to pay the hospital bills as the payment is made to the hospital directly by the Third Party Administrator, on behalf of the insurance company. However, expenses beyond the limits or sub-limits as per terms and conditions of the policy and expenses not covered under the policy have to be settled by the insured directly with the hospital. Cashless facility, however, is not generally available if you take treatment in a non network hospital.
Yes. When the insured buys a new policy, generally, there will be a 30 days waiting period starting from the policy inception date, during which period any hospitalization charges will not be payable by the insurer. However, this is not applicable to any emergency hospitalization occurring due to an accident. This waiting period will not be applicable for subsequent policies under renewal.
Yes. The Insurance Regulatory and Development Authority of India(IRDAI) has issued a circular in October, 2011, which allows the insurance companies to allow Portability from one insurance company to another and from one plan to another, without making the insured to lose the renewal benefits for pre-existing conditions, enjoyed in the previous policy.
Any number of claims are allowed during the policy period unless there is a specific cap prescribed in any policy. However the sum insured is the maximum limit under the policy.
The policy will be renewed provided the insured pays the premium within 15 days (called as Grace Period) from the date of renewal. However, coverage would not be available for the period for which no premium is received by the insurance company. The policy will lapse if the premium is not paid within the grace period.
Health insurance comes with attractive tax benefits as an added incentive. There is an exclusive section of the Income Tax Act which provides tax benefits for health insurance, which is Section 80D, and which is unlike the section 80C applicable to Life Insurance wherein other form of investments/ expenditure also qualify for the deduction. Currently, purchasers of health insurance who have purchased the policy by any payment mode other than cash can avail of an annual deduction of Rs. 15,000 from their taxable income for payment of Health Insurance premium for self, spouse and dependent children. For senior citizens, this deduction is higher, and is Rs. 20,000.
Below are some of the exclusions under a Health Insurance policy, please refer to the respective insurance company’s policy wordings for the entire list of exclusions.
- Medical Exclusions:
- "AIDS" / HIV
- Abuse of intoxicating drugs and alcohol, including smoking cessation programs and the treatment of nicotine addiction
- Treatment of Obesity and any weight control program subject to cover under benefit
- Psychiatric, mental disorders (including mental health treatments)
- Parkinsons and Alzheimer’s disease
- Sterility, treatment whether to effect or to treat infertility; any fertility, sub-fertility or assisted conception procedure; surrogate or vicarious pregnancy; birth control, contraceptive supplies or services including complications arising due to supplying services
- Plastic surgery or cosmetic surgery
- Dental treatment or surgery of any kind unless as a result of Accidental Bodily Injury to natural teeth and also requiring hospitalization & any dental treatment
- Non Medical Exclusions
- Adventure Sport like diving, aviation, scuba diving, parachuting, hang-gliding, rock or mountain climbing.
- Intentional self-injury or attempted suicide while sane or insane.
- Provision or fitting of hearing aids, spectacles or contact lenses including optometric therapy
- Any treatment and associated expenses for alopecia, baldness, wigs, or toupees
- Any claim incurred after date of proposal and before issuance of policy where there is change in health status of the member and the same is not communicated to the insurer
