Terminologies used in the Health Insurance Parlance
The legal document which behaves as a contract between the insurer and insured specifying all
the terms &conditions including health coverage, benefits, exclusions, etc. is termed as “ Health Policy”.
The payout amount that the insurer is liable to pay to the insured in case of an eventuality
covered in the health plan is termed as “Sum Insured “ which follows the principle of indemnity.
The predefined fixed percentage of the claim amount which is to be paid by the policyholder and
the remaining amount will be settled by the insurance Co. is termed as “Co-Payment” .
The disease or medical condition which the person has before taking the health plan is termed as
The fixed timeline or the time range for which the insured has to wait to get certain health
benefits under the health policy is termed as “ Waiting Period”.
There are certain events or conditions which are not covered under the policy coverage are
termed as “ Policy Exclusions”.
The list of hospitals and medical centers where the insured can avail cashless services or
discounted services under his health plan is termed as “ Network hospitals”.
An organization which acts as a separate entity in processing the claims or provides cashless
facilities as termed as “ Third Party Administrator (TPA)”.
Illnesses which are so severe that, even after treating the disease alters the lifestyle of a person
drastically is termed as “Critical Illness”.
Spouse, unmarried kids, parents for whom the policy holder is responsible for are termed as
Types of Health Insurance Plans
The individual health insurance covers only one individual who will reap the benefits provided in the health insurance plan. Under such plan, the insurer guarantees to take care of the medical costs of the insured in return for a premium. Such plans may cover hospitalization charges, along with pre and post hospitalization expenses, subject to the policy conditions.
A family floater plan covers several members of a single family under one plan. The entire family, including spouse, parents, children can be covered for a specific sum assured by paying a lump sum premium amount for the entire family. In the event of multiple illnesses in the family, the sum assured can be shared between family members and multiple claims will be paid in a policy year basis the maximum limit.
Senior Citizen Health Insurance Plans
As the age advances more is the risk of getting sick and surrounded by various diseases. Health insurance plans have become the need of an hour. Senior citizens have to pay the hospital bills from their savings which will make a big hole in their pocket. Under one plan umbrella both senior citizen husband and wife can be covered or the plan can be taken on an individual basis as well. Health plans catering to the needs of the senior citizens offer policies within the age bracket of 65 to 80 years.
Critical illness insurance protects you financially in the event you are diagnosed with any of the critical illnesses such as cancer, stroke, kidney failure, etc. covered by the health plan. Upon diagnosis and a survival period of 30 days, you get a compensation equivalent to the sum assured opted in the plan.
Personal Accident plan safeguards you against personal accidents resulting in death or permanent total/partial disablement. Severe injuries caused by a personal accident can undesirably affect the earnings of the person affected and can significantly influence his/her life in multiple ways. This plan can be taken individually or can be taken for your entire family against unforeseen accidental events.The sum assured of the policy is paid to the policyholder or beneficiary as the case may be. Such plans may also cover hospital daily cash, subject to the terms & conditions.
Need for Health Insurance Plan
Health Plans provide financial security to encounter the health pertaining emergencies. In this changing era of hectic lifestyles, health concerns have aggravated and have become more complex. In such changing times, it is vital and essential to have a health insurance plan in hand, to shield you from the financial turmoil in the case of medical emergencies. Health insurance covers you from the risk of expenditure caused due to medical contingencies. In the present scenario where high medical inflation rates are touching the sky, not having a health insurance plan or inadequate amount of health insurance cover can prove to be a major personal financial catastrophe. So it is imperative to take a health insurance plan of the adequate amount to safeguard yourself and your family.
Benefits under the Health Insurance Plan
The basic benefits under the Health Insurance Plan are mentioned below. But it is imperative to understand that the benefits of the health insurance plan may vary from Insurer to Insurer.
Covers Medical Expenses During Hospitalization
Health Insurance policy covers the medical expenses, which are the rational charges that the policyholder has essentially incurred on the advice of a certified medical practitioner. It covers the inpatient hospitalization expenses like room rent, nursing charges, Surgeons, Anesthetists, Dieticians and other Doctors fees, ICU charges, etc. The scope of coverage of such expenses may vary from insurer to insurer.
Provides Pre and Post Hospitalization Benefits
Most of the health insurance plans cover pre and post hospitalization expenses for treating a
specified medical condition. The coverage is stipulated to cover few days like 30 days preceding the date of admission and 60 days from the date of discharge. The number of days specified varies from insurer to insurer.
Provides Cashless Treatment
Almost all insurance companies provide the benefit of cashless benefits during your hospital stay if you opt from the network of hospital lists of the insurer. The intent is to provide the policyholder hassle free, tension free stay in case of medical emergency.
The health insurance premium that the
policyholder pays for himself, his/her dependents (spouse and children) and his/her parents, are all considered for tax benefit under Section 80D of the Income Tax Act 1961, for a maximum value of Rs.25000 for Non senior citizens and Rs.30000 for senior citizens.
No Claim Bonus
NCB or No Claim Bonus is a benefit provided if the insured does not make any claim in the
preceding policy year. No claim bonus may result in either added as an increment in the sum assured or a fixed percentage discount in the premium amount. It’s essential to compare the cost of the treatment and compare it with the amount of bonus to analyze the decision of making a claim or not. If the bonus amount exceeds the actual expense, it’s wise to pay from your own pocket.
Provides Emergency Ambulance Benefit
Many insurers cover the cost for transferring you / your family members who are part of the policy to or between Hospitals in the hospital's ambulance or in an ambulance hired by any ambulance service provider. The benefits amount is specified as per the policy terms and conditions. This benefit is provided only in case the claim is accepted.
Hospital Cash Benefit
A regular daily hospital cash benefit is payable in the event the insured is hospitalized due to either accidental bodily injury or sickness. This benefit is paid on a day to day basis, depending upon the level of cover opted for under your health policy.
Free Medical Check-up
Free medical check-ups are provided by the insurance companies in case you have a good claims history or at the end of claim free year. It varies from insurer to insurer as well.
Factors Determining Health Insurance Premium
Age is the most imperative factor that determines your health insurance premium. As your age advances ,the premium will be higher because it is assumed the older you get, the more prone you are towards the illness.
Higher the sum assured opted by the policyholder under health plan more will be the premium the insurance company will charge to indemnify the amount in the event of a claim.
Previous Medical History
It is another key factor in deciding the premium amount. The clear medical history attracts less premium whereas if you have suffered some major illnesses or pre existing diseases then your insurer might ask for higher
Number of Insured’s
The premium amount depends on the number of insured’s covered in the policy. Health insurance provides a family floater policy where you can cover your spouse, kids and parents as well. So more the number of insured’s more will the premium as compared to the individual health policy.
Claim Free Years
Claim free years are also a determining factor for the health insurance premium. With the claim free year you get a no claim bonus which might give you a certain percentage of discount on your renewal premium. So it may reduce your premium.
Add on Covers/Riders
Add on covers will make your health plan comprehensive. With the purchase of additional covers your health premium will elevate depending upon the add on cover opted for.
Critical Illness Cover
Critical illness means any disease or illness which is terminal in nature, such as cancer, massive heart attack, stroke, etc. Critical illness cover provides an immediate fixed specified amount, apart from the expenses incurred during the actual medical process. Usually a basic health plans covers 10-15 ailments on account of critical illness on average, but taking it as an add on the cover can cover up to 38 ailments in a case taken as an add on cover.
Maternity benefits are usually not included in the basic health plan. Add on maternity cover provides coverage against maternity expenses incurred during child birth after a waiting period. This could be two years or more, depending on the insurer and the plan. Apart from this, insurers also furnish an option to cover newborn babies, from birth till the end of policy term.
Personal Accident Cover
A personal accident add-on benefit covers the risks that erupt due to the death or total/partial disablement in the event of accidents. Personal accident cover is basically available, as separate insurance covers on additional premium amount. Such rider is supportive in the cases of medical emergencies occurring due to accidents. You need to decide the coverage of personal accident cover prudently to get saved from the gigantic hospital bills.
Room Rent Waiver Cover
A room rent waiver add-on benefit allows you to have an elevated room rent limits in case of hospitalization. Usually, most of the health plans have a fixed and specific predefined sub-limit on the room rent or room type. With this add-on rider you can go for either an improved or expensive room and still it wouldn't bother into your existing sum insured.
Payout Options in Case of the Health Insurance Claim
1. Direct Payment or Cashless option
Under this scenario, the policyholder does not need to pay the network hospital and the treatment will be cashless. This means that the insurer pays directly to the hospital. Under the cashless scheme, the policyholder and other family members who are mentioned in the policy can undertake treatment from such hospitals, which are included in the list of network hospitals of the insurer.
2. Reimbursement of the Claim amount
Under this payout approach the policyholder pays the hospital bills for the duration of the treatment he/she (or other people covered under the policy) stays in the hospital. Later the policyholder can take a reimbursement of the claim amount from the insurer for the treatment that is covered under the policy undertaken by furnishing the hospital bills and other related documents.
Following is the general policy exclusions:
All pre - existing diseases (the pre - existing disease exclusion is consistently defined by all
insurance companies offering health insurance plans.
Under first year policy, any claim during the first 30 days from date of cover, for sickness / disease.
Accidental injury claims may be entertained and does not require waiting period.
During the first year of cover – cataract, Benign prostatic hypertrophy, Hysterectomy for
Menorrhagia or Fibromyoma, Hernia, Hydrocele, Congenital Internal diseases, Fistula in anus,
piles, sinusitis and related disorders are under the exclusions.
Cost of specs, contact lenses, hearing aids
Dental treatment / surgery if requires hospitalization
Convalescence, general debility, congenital external defects, V.D., intentional self-injury, the use of intoxicating drugs / alcohol, AIDS, Expenses for Diagnosis, X-ray or lab tests not related to the
disease for which the insured has been hospitalized.
Treatment related to pregnancy or childbirth, including cesarean section.
The exclusions may vary from plan to plan and insurer to insurer.
Health Insurance Companies
Oriental Health Insurance
Agriculture Health Insurance
Apollo Munich Health Insurance
Bajaj Allianz Health Insurance
Bharti AXA Health Insurance
Cholamandalam MS Health Insurance
Cigna TTK Health Insurance
ECGC Health Insurance
Future i Health Insurance
HDFC ERGO Health Insurance
ICICI Lombard Health Insurance
IFFCO Tokio Health Insurance
L&T Health Insurance
Liberty Videocon Health Insurance
Magma HDI Health Insurance
Max Bupa Health Insurance
National Health Insurance
Raheja QBE Health Insurance
Reliance Health Insurance
Religare Health Insurance
Royal Sundaram Health Insurance
SBI Health Insurance
Shriram Health Insurance
Star Health Insurance
Tata AIG Health Insurance
The New India Assurance Health Insurance
United India Health Insurance
Universal Sompo Health Insurance