A Complete Guide to Individual Health Insurance Plans

Guide to Individual Health Insurance - BimaBandhu

It has been rightly said that most of us realize the impact of hardships only when we face them. However, with the current Covid-19 pandemic in place, people across the world are more aware of the need to buy individual health insurance. Medical emergencies are unpredictable and can cause financial stress in our lives. With the rising cost of medical expenses, access to good quality healthcare facilities is not feasible for all.  

However, you can stay prepared for any medical exigency by buying individual health insurance plans for yourself and your family members. The best individual health insurance policy can give you the financial confidence to care for your loved ones when they need it the most.  

Let’s cover diverse aspects related to individual health insurance.  

What is Individual Health Insurance? 

It is a type of health insurance plan that provides healthcare coverage to an individual basis the chosen sum insured. As the name suggests, individual health insurance is to be purchased separately for every individual in your family. You can customize the insurance coverage based on your specific health needs or that of the individual you are buying it for. 

Most individual health insurance plans are designed to provide all-inclusive insurance coverage for medical expenses related to hospitalization, alternative treatment, daycare procedures, and similar others. 

What are the Features and Benefits of Individual Health Insurance? 

Given below are the primary features and benefits of an individual health insurance policy: 

  • Individual coverage to be utilized only by you (the insured) 
  • Suitable for elderly people with a higher risk of health problems 
  • Ease of selecting a high sum insured up to Rs. 1 crore depending on the chosen plan 
  • Availability of add-on covers, like critical illness cover, maternity benefits, restoration benefits, etc. 
  • Facility to file multiple claims within a year as long as you have a sum insured available under your individual health insurance policy 
  • No claim bonus on premium in case you do not file any claim during the last policy year 
  • Lifetime renewability benefit 
  • Tax savings on the individual health insurance premium paid, as covered under Section 80D 

5 Reasons You Should Buy an Individual Health Insurance Plan 

Given below are five crucial reasons why you need to consider buying individual health insurance: 

  • To fight against lifestyle diseases without facing financial challenges 
  • To protect yourself and your loved ones from various critical illnesses 
  • To deal with healthcare inflation 
  • To protect your lifelong savings from getting exhausted during healthcare emergencies 
  • To strengthen inadequate health insurance coverage if you are already covered under a plan 

What is Covered under Individual Health Insurance Plans? 

In general, individual health insurance provides coverage for the following needs: 

  • In-patient hospitalization  
  • Covid-19 treatment 
  • Daycare procedures 
  • Alternative treatment 
  • Pre-and Post-hospitalization expenses 
  • Domiciliary hospitalization 
  • Emergency ambulance 
  • Organ donor expenses 
  • Preventive healthcare checkups at no extra cost 
  • Daily hospital expenses (cash) 

The finer coverage details differ from one individual health insurance policy to another. Make sure you read the policy document carefully at the time of buying it. 

What is not Covered under an Individual Health Insurance Policy? 

In most cases, individual health insurance policies do not provide coverage for the following: 

  • Self-inflicted injuries 
  • Alcohol or drug abuse 
  • Dental treatment 
  • Cosmetic treatment 
  • Obesity treatment 
  • Infertility treatment 
  • Injuries or illness due to nuclear perils or war 
  • Congenital external anomalies 
  • Injuries resulting from participation in dangerous sports 

Things to Keep in Mind While Buying Individual Health Insurance Plans 

You should consider the following important pointers while buying individual health insurance: 

  • Assess your health  

Before you search for any individual health insurance policy, analyse your health requirements. Create a list of coverage benefits that you would need under your plan and then gauge an ideal coverage amount to select the right sum insured. 

  • Check network hospitals 

You must check the list of network hospitals associated with a health insurance company. More particularly, check if the hospitals near you are there in the list.  

  • Consider the total cost 

Ideally, you should buy the best health insurance plan that you can easily afford. Work on creating the right balance between coverage and cost at the time of buying a plan. 

  • Look at the Claim Settlement Process 

You must know about the claim settlement process of an insurer before you buy any plan. The easier the process is, the easier it will be for you to get the claim settled whenever needed. Avoid selecting a plan that comes with a complicated settlement process. 

  • Check the insurer’s claim settlement ratio 

An insurance company having a high claim settlement ratio is more likely to benefit you in the long run. Make sure you compare the claim settlement ratios of different insurers before selecting any plan. 

  • Check for any sub-limits 

Many individual health insurance plans come with sub-limits related to different treatments and medical needs. It is advisable to check all the applicable sub-limits to get adequate coverage as per your expectations.

How to Buy an Individual Health Insurance Policy? 

You can buy individual health insurance either offline or online. In case you choose to buy a plan online, you have two options – either buy it directly from the chosen insurance company or through an insurance aggregator.  

In general, follow the steps given below to purchase a suitable individual health insurance plan online: 

  • Select the insurer of your choice and then choose a plan it offers 
  • Provide details like your name, gender, age, and current health condition 
  • Choose a suitable sum insured 
  • Select add-ons if you want any 
  • Pay premium online 
  • Your policy will be issued in the least possible time this way 

How to Compare Individual Health Insurance? 

Before buying individual health insurance, it is important to compare different plans available in the market. Ideally, you should compare these plans based on the following parameters: 

  • Coverage 
  • Cost 
  • Availability of cashless claim service 
  • Reputation of the insurance company 
  • Insurer’s claim settlement ratio 
  • Network hospitals 

How to File a Claim for Individual Health Insurance? 

The primary purpose of buying an individual health insurance plan is to receive financial aid during a healthcare emergency. Hence, you should know the steps involved in filing a claim under your policy.  

General Steps to File a Cashless Claim 

  • Intimate the insurer at the network hospital by filling up a pre-auth form 
  • Get hospitalized based on the pre-auth approval 
  • The insurer settles the claim directly with the hospital, hence the name ‘cashless’. 

General Steps to File a Reimbursement Claim 

  • Get the required medical care at the hospital of your choice and pay the bills from your pocket 
  • Post discharge, send the invoices and treatment documents to your insurer. 
  • Post verification, the insurer will approve the claim amount and then send the payment to your bank account. 

Tax Savings with Individual Health Insurance Purchase 

  • You can save tax on the individual health insurance premium paid under Section 80D, subject to the limits of Rs. 25,000 and Rs. 50,000. 
  • The premium you pay for the policies of your parents also makes you eligible for a tax deduction of up to Rs. 50,000. 
  • The expenses incurred for preventive health checkups for parents are also eligible for tax benefits, up to a limit of Rs. 5,000. 

** The tax benefits you can avail of may change as per the tax laws. Please consult a tax consultant to calculate your tax savings.  

How to Check Eligibility to Buy Individual Health Insurance Plans? 

Two main factors determine if you are eligible for buying the individual health insurance policy of your choice. These are: 

  • Your age which should be in the bracket of 18 to 65 years 
  • Your pre-existing illnesses which you need to declare honestly at the time of buying a plan 

Why Buy Individual Health Insurance Online? 

  • Easy to compare plans from different insurers 
  • Convenience of buying a policy from the comfort of your home 
  • Secure payment modes available 
  • Instant policy issuance 
  • No need to deal with insurance agents 
  • Value-added add-ons at your fingertips 

Individual Health Insurance FAQs 

Should I buy separate individual health insurance when I am covered under my employer’s group plan? 

The health insurance coverage provided by your employer is valid only till your work in that organisation. Since the group plan offers basic coverage, it is generally recommended to buy a separate individual health insurance policy. 

How much does individual health insurance cost per month? 

The premium of a health insurance plan depends on several factors, including your age, health condition, selected sum insured, and add-ons.  

What are pre-existing diseases? 

It refers to injuries or illnesses that you already suffer from before buying health insurance. In general, most health insurers offer coverage for pre-existing diseases after you serve a specific waiting period. 

What are pre-and post-hospitalization expenses? 

Expenses incurred before you get admitted into a hospital, like doctor consultation fees or diagnostic test fees, are called pre-hospitalization expenses. On the other hand, expenses incurred post discharge are covered under post-hospitalization expenses category. 

Why should I buy individual health insurance at a young age? 

The younger you are, the lower will be your health insurance premium. You also become eligible for many other benefits when you buy health insurance at a young age. 

Can I buy more than one individual health insurance policy? 

Yes, you can choose to buy more than one policy depending on your needs. 

What is waiting period related to health insurance? 

In general, it refers to the time span when you, as a policyholder, cannot avail a few or all the benefits related to your policy.  

What is free-look period? 

It refers to the period within which you can cancel your policy without incurring any penalty. It usually ranges from 10-15 days depending on the chosen insurer. 

What is the difference group health insurance and individual health insurance? 

Group health insurance covers members of a group under one policy. Whereas, an individual health insurance policy is meant to provide coverage for a single individual only. 

Also Read: Best Health Insurance Companies in India 


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