A Complete Guide to Health Insurance in India

Our health is wealth and any medical emergency can result in a financial upheaval in our lives. With the rise in healthcare problems and occurrence of disease not known before, the uncertainty of health issues is on the rise, along with the cost of medical treatments. That is why more people have started to realize the importance of buying a suitable health insurance plan.  

Buying health insurance for yourself and your family members is crucial to receive the much-needed financial protection in case of any healthcare emergency. If you want to buy a health plan, it is important that you first know well about this type of insurance before making any final decision.  

Let’s dive deeper into various facets of health insurance in India.  

What is a Health Insurance Plan? 

A health insurance plan is a legal contract between a policyholder and the chosen insurance company under which the insurer agrees to provide financial coverage for healthcare expenses incurred during the insured eventualities. The insured individuals can benefit from a health policy either in terms of cashless treatment in the network hospitals or by filing a claim for reimbursement.  

What is the Importance of Buying Health Insurance in Our Lives? 

The very need for a health insurance policy can be realized from the fact that health problems do not arise knocking at our doors. With the kind of lifestyle being followed by people in India, more people are at the risk of suffering from a wide variety of diseases. On the other hand, the cost of quality healthcare services is also increasing with time, making it difficult for a common man to afford these services. Without having health insurance by your side, the medical bills will be enough to drain anyone’s life-long savings quickly.  

In current times, a health insurance policy has become an absolute necessity for everyone. It covers hospitalization expenses and much else in case of an illness or accident, making it easier for you to stay healthy and get the required treatment on time.  

Given below are five crucial reasons why you need to buy a health insurance plan early in life: 

• To stay prepared for various lifestyle diseases and fight them easily without financial worries 
• To safeguard your family against the risk of financial burden in case of any medical crisis 
• To deal with the healthcare inflation, which is around 15% in the last few years 
• To keep your savings intact when medical emergencies occur 

Why Do You Need to Consider Health Insurance Purchase? 

You need a suitable health insurance policy with an adequate sum insured to meet the rising cost of healthcare treatment in India. A careful selection of a health insurance plan will act as a financial cushion for you to bank on whenever the need arises. It will help you pay the bills of expensive medical treatment required for accidental injuries or lifestyle diseases.  

In the financial year 2018, the health insurance penetration in India stood at 35%, which is quite low as the standards maintained by developing countries. There are many reasons for low insurance penetration stats, ranging from lack of awareness amongst the masses, cost of health insurance plans, and many others.  

Being a citizen of India, you need health insurance coverage because of the following reasons: 

• A health insurance plan can help you pay for the expenses of hospitalizations, lab tests, medicines, and others. You can even get OPD expenses covered under a suitable plan. 
• It helps you save money by minimizing the out-of-pocket expenses under a cashless treatment facility in the network of hospitals covered by your insurance company. 
• During the current Covid-19 pandemic, you need a medical insurance policy to cover the cost of treatment required in case you get diagnosed with this deadly disease. 
• You can also buy health insurance to get maternity cover as a part of family planning. 
• You can safeguard yourself from the risk of contracting Coronavirus infection by buying standard Coronavirus health insurance plans.  
• By buying a suitable health insurance policy at the right age, you can ensure peace of mind for yourself and your loved ones. You will need not worry about the possible risk of medical uncertainties, which can otherwise drain all your savings in one go. 

What are the Key Benefits of Buying a Health Insurance Policy? 

You can easily find comprehensive health insurance policies in the market that provides financial coverage to deal with a wide range of expenses related to healthcare treatments.  

Given below are nine key benefits of health insurance in our lives: 

1. Cashless Healthcare Treatment 

Health insurance companies create tie-ups with various hospitals and nursing homes across the country, which are also called empaneled or network hospitals. You need not pay anything if you choose to get treatment in any of these hospitals. The medical bills will be taken care of between the insurer and the hospital, without causing any stress of filing reimbursement claims. You can check the list of network hospitals at the time of buying a health insurance policy.  

You should also know that if the medical expenses go beyond sub limits defined in the policy, then you need to settle the bill with the hospital. You will not get the cashless facility in case you get hospitalized in a non-network hospital.  

2. Pre and Post-Hospitalization Coverage 

This salient feature of many health insurance policies takes care of the pre and post-hospitalization expenses during a certain number of days as specified in the policies. 

3. Ambulance Expense 

Many health insurance plans also provide coverage for the cost of transportation once the insured individual is hospitalized.  

4. Preventive Medical Checkup Facility 

A health insurance plan also makes you eligible for preventive health checkups as per its inclusion terms. You can either get this benefit included in your base policy or choose it additionally via add-ons. 

5. NCB or No Claim Bonus 

Insured individuals are entitled to receive this bonus if they do not file any claim during the previous policy year. They receive this benefit either in the form of a discount on the renewal premium or increased sum insured. 

6. Room Rent Capping 

Room rent capping is one of the sub-limits associated with health insurance policies. Under these limits, the maximum room rent covered under the policy for a day is pre-defined. For example, if the daily room rent capping under your health insurance plan is Rs. 5,000 while the cost incurred for room rent in a hospital is Rs. 7,000, then you need to pay the remaining cost out of pocket.  

7. Co-Payment Clauses 

Health insurance plans come with co-payment clauses that define the deductible to be paid by you in case of medical exigency. It means you need to pay a certain amount for the required medical treatment while the insurance company pays the rest. Think of these clauses as the cost-sharing requirement under health plans that defines the share of total admissible cost (in percentage) to be paid by you.  

You can lower the health insurance premium by selecting a higher voluntary deductible at the time of buying the plan.  

8. Tax Benefits 

Health insurance purchase also makes you eligible to receive tax benefits under Section 80D of the Income Tax Act, 1961. The premium you pay for a health plan that covers you or your family members, gets you a tax deduction, irrespective of their dependency status.  

If your age is less than 60, you can save taxes of up to Rs. 25,000 in a financial year. For individuals above 60 years of age, the maximum tax benefit increases to Rs. 50,000.  

9. Pre-existing Disease Coverage 

After few years of health insurance policy inception, various insurers consider pre-existing diseases like hypertension, diabetes, etc., and provide financial coverage for them too.  

Do a Health Insurance Plan Cover Covid-19 Treatment Expenses? 

India has become one of the worst-hit countries affected by the Covid-19 disease, which has made many insurance policyholders think if the treatment for this disease will be covered or not.  

If you have already purchased a health insurance policy, it will likely cover the cost of Covid-19 treatment. Since it is a new health disease, the insurers cannot deny the coverage as per IRDAI guidelines. However, you can check with the chosen insurer about the specific limits related to Covid insurance cover. 

In case you do not have any medical insurance policy but want to get insured to get protection against Coronavirus infection, you can consider buying Covid health insurance policies. Most of the health insurers and general insurers have started offering health insurance for Coronavirus as per IRDAI guidelines. These include Corona Kavach and Corona Rakshak policy.  

You May Also Like to Read: A Complete Guide to Coronavirus Health Insurance 

How to Proceed for Coronavirus Claim Settlement? 

After being declared a global pandemic, the Covid-19 disease has created confusion in the minds of health insurance policyholders and new policy buyers. You should know that Coronavirus claim under a health plan gets settled just as in the case of other diseases.  

However, there are certain situations in which the insurance claims for Coronavirus treatment may get rejected by the insurer, such as: 

• When an individual intends to buy a health insurance policy after being diagnosed positive with Coronavirus (you need to check whether the insurer provides Covid-19 treatment coverage under the new policies as well) 
• When an individual files a claim for Coronavirus health insurance within the waiting period of the policy 
• When an individual contracts the Covid-19 disease during the waiting period of the policy 

Health insurance claims can also be rejected if an individual gets infected with Coronavirus from a family member who traveled to Covid-affected regions or countries recently where the travel has been banned.  

What are the Common Health Insurance Inclusions? 

Inclusions refer to the situations in which you will get the benefits under the chosen health insurance policy. Given below are some of the most common inclusions related to health insurance: 

• In-patient hospitalization  
• Pre-existing diseases or illnesses 
• Pre and post-hospitalization 
• Ambulance charges 
• Maternity expenses 
• Donor expenses related to organ transplant 
• Health checkups, and more 

What are Health Insurance Exclusions? 

Exclusions refer to the conditions or situations which are not generally covered under a health plan. Some of the common health insurance exclusions are: 

• No insurance coverage or reimbursement for claims filed within the waiting period (unless in case of an accidental emergency) 
• Critical illness or pre-existing coverage subjected to a longer waiting period of around two to four years 
• No coverage for maternity or newborn expense unless a maternity rider is purchased 
• Terminal illnesses  
• Cosmetic or plastic surgery, sex change, etc. 
• Dental surgery 
• Injuries resulting from suicide or war-like activities 
• Diagnostic tests or post-care procedures, and many others 

9 Factors You Should Consider While Buying Health Insurance 

Consider the following factors to make the right health insurance buying decisions: 

1. Coverage Scope 

Health insurance premium is not the only way to assess the benefits of a policy. Lesser premium does not always mean a good health insurance plan. Such a plan might not provide adequate coverage. Hence, you should carefully check what the policy coverage scope is. Always look for comprehensive plans to get the required financial protection for uncertain times.  

2. Insurer’s Claim Settlement Ratio 

Claim settlement ratio is a significant credential of insurance companies that every policy buyer must check. Always go with a company that has a proven record of a high claim settlement ratio. You can explicitly ask for the insurer’s claim settlement ratio at the time of buying health insurance or check it online. 

3. Policy Sub-limits and Capping 

Sub-limits and caps are the pre-defined thresholds for various expenses covered under the policy. Keep in mind that a health insurance policy will not benefit you beyond these limits and caps. Therefore, you must know about the related limits and capping to get maximum benefits from a health insurance policy.  

4. Hospital Network 

The cashless facility under a health insurance policy can only be availed in the network hospitals. Hence, you should know if the policy you are planning to buy covers some of the hospitals nearby. This way, you can avoid running around with medical bills to file a claim for reimbursements. Furthermore, cashless claim settlement is subject to the chosen sum insured and other limits defined under the policy. 

5. Ease of Policy Renewal 

Most health insurance policies are annual contracts, which means you need to renew them to continue getting the protection. To avoid losing the insurance coverage, make sure you check if you can renew the policy online without having to visit the nearest branch of the insurance company. These days, all insurers offer this facility. However, it is advisable to cross-check the same before you buy a policy.  

6. TAT for Claim Settlement 

At the time you would file a claim for health insurance, you want it to get settled without hassles and in the least time possible. Generally, the claim settlement process involves a third-party administrator for claim processing and paperwork. Hence, you should know the Turn Around Time (TAT) it would take for the claims to be processed.  

7. Type of Health Insurance Plan 

There are two types of medical insurance plans available – individual and family floater. If you are in your 20s and your parents are covered under a different health plan, you can buy an individual plan for yourself. However, in case you are married and have kids, you can choose the family floater plan to get comprehensive protection under one policy. Also, select a suitable plan after checking the premium and policy benefits covered. 

8. Facility to Port Policy 

As an insurance policyholder, you are allowed to switch from one health insurance company to another without losing the advantage of waiting period already earned with your policy. This is known as health insurance portability. Since it makes sense to port your health insurance policy amidst the changing insurance landscape, you should know about the process and charges involved if any.  

9. Waiting Period 

To get insurance coverage, there is a waiting period involved as per the health insurance norms. It is usually a period of 30 days or around post the policy inception date during which you cannot file any claim, except in case of a medical emergency. Make sure you check the waiting period clause related to your policy and its impact on the overall insurance benefits. 

Which Health Insurance Plan Should You Purchase? 

Whether you are buying a medical plan for the first time or otherwise, it is crucial to map your needs to that of the benefits that any specific plan offers.  

Given below is a table that illustrates how you should do the need-to-benefit mapping while buying health insurance: 

Who is Eligible to Buy Health Insurance? 

The eligibility of an individual for a health insurance policy is based on his/her age, current health status, medical history, and similar other parameters. This is the reason why a medical test is conducted by insurers prior to offering a health plan to a policy buyer.  

In general, the following eligibility criteria is applicable to all health insurance policy buyers: 

• Entry age, which should be 18-65 years for adults and 90 days – 18 years for children 
• Pre-medical screening based on the terms defined by the selected insurance company  
• Pre-existing diseases disclosure 

It is essential to disclose facts related to your health truthfully to the insurer without hiding any medical condition. You can also check the policy wordings to know more about the eligibility criteria.  

Why Should You Compare Health Insurance Plans Before Buying One? 

Selecting the best health insurance policy often becomes difficult as there are so many policies and insurers to choose from. Sometimes, people buy a policy that is available at a lower price but offers lesser benefits. On the other hand, some individuals buy a costlier policy that includes features that they might never need.  

Health insurance plan comparison can help you decide which policy to choose. By making this comparison based on different parameters like cost, benefits, etc., you will be in a better position to buy the most suitable policy.  

This way, you can prevent a medical emergency to become the cause of financial stress.  

How Should You Compare Health Insurance Policies? 

Having hundreds of health insurance products offered by different insurers in the market makes it difficult to get the best plan at a price you can easily afford. However, you can easily step ahead of these difficulties by keeping in mind the following tips to compare health insurance plans: 

• Choose Adequate Sum Insured 

The cost of getting quality treatment is increasing every year, thus making it crucial for every individual to plan for medical emergencies. To cover the inflation factor in mind, you must select an adequate sum insured available at an affordable premium.  

• Know How the Premium Varies with Different Parameters 

The premium of a health insurance policy depends on your medical history, age, family health history, lifestyle, selected sum insured, and many other parameters. You should know about these factors and their impact on the premium before buying any policy. 

• Check the Market Reputation of Health Insurers 

Before selecting any health insurance company, you must research well about the customer experience they provide, the claim settlement process, and its claim settlement ratio. This will help pick the right insurer for the long run. 

What are the Benefits of Comparing Health Insurance Policies? 

Visiting different branch offices or meeting several insurance agents is nearly impossible before you buy a health insurance policy. However, this does not undermine the need to know about different plans in detail before making an informed decision.  

BimaBandhu is a platform that caters to this need and provides in-depth details about health insurance comparison.  

Given below are some of the primary advantages of comparing and buying health insurance policies online: 

• Availability of Unbiased Information 

Comparing health insurance plans online makes you aware of the differences between different types of plans that are available in the market. It also helps you avoid dealing with agents who might not provide unbiased details about the plans they offer. 

• Saves Time 

When you look for different health insurance policies and compare their benefits online, you save time that would otherwise be needed to deal with agents or visiting branch offices. Alongside, the process of buying and renewing these policies online is quite easy and hassle-free. 

• Saves Money 

Buying a health plan directly from the insurer online eliminates the brokerage or agent fees, which can help you buy the plan at a lower rate. The same plan when bought via an agent will cost higher comparatively. 

What is Health Insurance Portability? 

As a health insurance policyholder, IRDA allows you to change the current insurer without losing any of the policy benefits. In other words, it means you can change the insurance company but continue to get the benefits associated with your health plan. Indeed, there are various terms and conditions related to this facility of porting your policy. 

As per the new IRDA rules for health insurance portability, you can switch from one insurance company to another. In such a case, your new insurer has to consider the portable benefits you have gained within your term with the previous insurer. The same rule is applicable when switching from one policy to another with the same insurer.  

Here are some crucial things you must know before you port a medical insurance policy: 

• You can switch from one health insurer to another. 
• You can get insurance coverage from the new insurer as per the sum insured chosen in the previous plan. 
• To successfully port your health plan, both the insurers must complete the formalities mutually as directed by IRDA. 
• You can switch the policy only at the time of renewing the same. 
• The terms and conditions of new policy are at the sole discretion of the new health insurance company you wish to choose. 
• You need to submit a port request to the current insurer at least forty-five days prior to the policy renewal date. 
• You may face issues in porting the policy in case there was any break while renewing the policy before. 

What are the Common Health Insurance Myths? 

Lack of knowledge about medical insurance amongst many individuals becomes the reason behind several prevalent myths, some of which are: 

• A healthy individual does not need medical insurance. 
• Health insurance covers all types of medical expenses related to treatment. 
• One can hide details of pre-existing ailments to get a health plan at a lower cost. 
• Smokers cannot buy health insurance. 
• Health insurance only covers the expenses incurred for hospitalization while the rest is to be borne by the insured. 
• Individuals covered in a group health insurance plan does not need an individual plan for extended coverage. 

What is the Process of Calculating Health Insurance Policy Premium? 

In the pre-Internet age, people were mostly dependent on insurance agents to check health insurance premium payable for a specific policy. Since it is important to keep the policy in force to get continued coverage, you must calculate the premium online to know if you can easily pay for it in the long run.  

The premium calculation process depends on several factors, including your medical history, age, family background, etc. These days, you can use an online health insurance premium calculator. It is a tool that can also help you understand how the premium varies with different factors.  

List of Factors That Affect Health Insurance Premium 

Buying a suitable health insurance plan takes care of the medical expenses and offers financial security. Given below is a list of factors on which the premium of your health plan depends: 

• Medical history 
• Age 
• Gender 
• Selected policy period 
• Type of health insurance 
• Lifestyle followed (including smoking and drinking habits) 
• No Claim Bonus if any 

What are the Procedures to File a Health Insurance Claim? 

In general, there are two ways or procedures to file a claim under your health insurance policy: 

• Cashless Treatment  

You can use the health card issued by your insurer in any of the network hospitals covered under your policy. The card, along with your identity proof, will help you get cashless treatment in the hospital of your choice as per the policy terms. 

• Expense Reimbursement 

Other than the cashless benefit, you can also pay for the medical bills first and then file a health insurance claim for reimbursement. The insurance company will pay the amount back to you as defined in your policy.

Note: You should also know that you need to get TPA approval in advance to get the insurance benefits in case of planned hospitalization. 

What are the Documents Required for Expense Reimbursement Under Health Insurance? 

The documents required to file a reimbursement claim under your health plan are as follows: 

• Discharge card given by the hospital 
• Duly signed in-patient hospitalization bills 
• Duly signed claim form 
• Doctor’s prescriptions and pharmacy bills 
• Doctor’s consultation fee bills 
• Authentic investigation report 
• A copy of your health insurance policy and the ID card of TPA 

Complete List of Health Insurance Providers in India 

Given below is the list of health insurance companies in India from whom you can buy a medical plan to stay prepared for unprecedented emergencies: 

• Bajaj Allianz Health Insurance 
• Aditya Birla Health Insurance 
• Bharti AXA Health Insurance 
• Chola MS Health Insurance 
• Care Health Insurance (formerly Religare Health Insurance) 
• Edelweiss Health Insurance 
• Digit Health Insurance 
• Future Generali Health Insurance 
• Kotak Mahindra Health Insurance 
• IFFCO TOKIO Health Insurance 
• Max Bupa Health Insurance 
• Liberty Health Insurance 
• National Health Insurance 
• ManipalCigna Health Insurance 
• New India Assurance Health Insurance 
• National Health Insurance 
• Oriental Health Insurance 
• Reliance Health Insurance 
• Raheja QBE Health Insurance 
• Star Health Insurance 
• Royal Sundaram Health Insurance 
• SBI Health Insurance 
• United India Health Insurance 
• Tata AIG Health Insurance 
• Universal Sompo Health Insurance 

Health Insurance FAQs 

At what age should I buy a health insurance policy? 

There is no specific age when you should purchase medical insurance. However, keep the thumb rule in mind – the earlier you buy, the lesser will be the policy premium. If you have started earning a substantial income and are in your 20s, buy a suitable plan for yourself and your family. 

What determines the cost of a health insurance plan? 

The premium payable depends on the insured’s medical history, age, family history, selected sum insured and riders, policy duration, and many other factors. 

Is it good to buy more than one health plan for myself? 

You can buy more than one health insurance plan in this country. For instance, if your employer has got your health covered under a corporate health plan, you can still buy an additional individual health plan.  

Is it mandatory to undergo medical tests before buying medical insurance? 

Although it is not mandatory to get the medical tests done while buying health insurance, most insurers ask for these tests based on the applicant’s age.  

I earn a small income per month. Can I buy a health insurance plan? 

Health insurance is not highly expensive. You can buy a policy whose premium starts from Rs. 200 – Rs.500 per month and higher, depending on your age and selected sum insured. 

For how many times can I file a claim under my health plan? 

In general, one or two claims are allowed during a policy term under a health plan. It is advisable to check the policy wordings carefully before buying it.  

Does health insurance cover all types of diseases? 

Most of the diseases except HIV/AIDS, congenital disorders, venereal diseases, and dental treatments are not generally covered under health insurance. Do check the policy inclusions for more details. 

Does my health plan cover medical expenses incurred for Covid-19 treatment? 

Health insurance plans do cover Covid-19 hospitalization expenses. In addition to your existing policy, you can also buy standard Covid policies like Corona Kavach and Corona Rakshak for extended coverage. 

How can I get cashless hospitalization under my health insurance policy? 

To get a cashless hospitalization benefit, you need to get the treatment in a hospital that is included in the network hospital list shared by your insurer. You can easily find or ask for this list. 

Are pre-hospitalization and post-hospitalization expenses considered differently under a health plan? 

The expenses incurred two-three months prior to getting admitted to a hospital fall into the pre-hospitalization expenses. However, post-hospitalization expenses refer to the medical expenses incurred after you get discharged from the hospital.  

When can I include my children my health insurance policy? 

Children can be included in a health plan from day one, in general. You can ask your insurer for further details. 

What is free-look period as defined in my policy wordings? 

It is the time period during which you can review the health insurance policy features and can decide if you want to keep the policy or not. It usually lasts for 15 days after the policy buying date. 

What is domiciliary insurance coverage? 

Domiciliary hospitalization coverage is for treatments taken at home as per the doctor’s prescription. You can get this coverage under certain health plans.  

What are the basic benefits I get under health insurance? 14  

Basic health coverage includes various hospitalization expenses, such as treatment cost, room rent/ICU rent, medicine cost, doctor’s fees, and others. You can also opt for additional critical illness cover with your policy. 

How should I file a claim after getting admitted to a non-network hospital? 

In such situations, you can file a reimbursement claim after you have paid all the bills already. The insurer will reimburse the expenses incurred as per the policy terms. 

Can I change the health insurance policy nominee during the policy term? 

You cannot change the nominee during its policy period. However, you can change policy coverage through an endorsement. 

What will happen if health insurance lapses during hospitalization? 

In such situations, the insured will not get the insurance benefits. Hence, it is recommended to renew the policy timely.  

How can I renew my health insurance plan? 

You can renew the policy online at your insurer’s website or via insurance aggregators. Similarly, you can renew it offline via your local insurance agent. 

What is waiting period in health insurance? 

It is the period that you, as an insured, have to serve to cover any pre-existing illness. You should also know that there are different types of waiting periods related to health insurance. 

What is No Claim Bonus (NCB) related to a medical plan? 

It is the discount you will get at the policy renewal because of not filing any claim during the last policy term.  

Gain Health Insurance Gyan at BimaBandhu

Buying the right type of health insurance plan becomes easier when you have gained enough information about the same. Having said this, BimaBandhu can act as an insurance guide for you, helping you understand various facets of the insurance sector in India. The insurance information portal is meant to help you make informed insurance-buying decisions. Get Insurance Gyan online to select the best policy for yourself and your loved ones.