Indian Health Insurance, Mediclaim Insurance in India, Compare Mediclaim Insurance in India

So what is Health Insurance?

Health Insurance is a policy which covers the insured for Medical Expenses post hospitalisation, whether it be a Sickness or Accident. This treatment could have major financial impact on the insured and their family and hence it is prudent for every individual to have sufficient Health Insurance in place. Some of the main coverages under the Health Insurance policy include:

In-patient treatment (Cashless) including room rent, ICU, nursing, medicines drugs & consumables covered without as per the policy terms and conditions upto the Sum insured mentioned on the policy. Covered expenses include:
- Room, Boarding expenses
- Nursing expenses
- Fees of surgeon, anesthetist, physician, consultants, specialists
- Anesthesia, blood, oxygen, operation theatre charges, surgical appliances, medicines, drugs, diagnostic materials, X-ray, Dialysis, chemotherapy, Radio therapy, cost of pace maker, Artificial limbs, cost or organs and similar expenses.
Pre and Post Hospitalization medical expenses: Medical expenses incurred normally upto 30 days immediately before hospitalization and normally upto 60 days immediately post hospitalization remain covered. The coverage period can be extended by submitting relevant documents to the insurer at least 5 days before the Hospitalisation.
Day Care Procedures: Most policies covers medical expenses for 120-150 different day care treatments which do not require 24 hours hospitalization
Domiciliary Treatment: The policy also covers for the medical expenses incurred for availing medical treatment at home on the advice of the attending Medical Practitioner which would otherwise have required Hospitalisation.
Organ Donor: The policy covers Medical Expenses on harvesting the organ from the donor for organ transplantation.
Dental Treatment (in case of Accident): The insurance company will reimburse Medical Expenses of any necessary dental treatment from a Dentist provided that the Dental treatment is required as a result of an Accident. Maximum liability shall be limited to the amount specified in the Schedule of Benefits.
Ambulance Charges - In most cases the ambulance charges are paid by the policy and the policy holder usually doesn't have to bear the same
Cover for Pre-existing Diseases - Health insurance policies have the option of covering pre-existing diseases after 3 or 4 years of continuously renewing the policy without any break in period, i.e. if someone has hypertension, then after completion of 3 or 4 years of continuous renewal with the same insurer (depending on the plan offered and his age), any hospitalisation due to hypertension will also be covered)
Other Terms to be aware of:
- Sum Insured : The Sum Insured offered may be on an individual basis or on floater basis for the family as a whole.
- Cumulative Bonus (CB) : Health Insurance policies may offer Cumulative Bonus wherein for every claim free year, the Sum Insured is increased by a certain percentage at the time of renewal subject to a maximum percentage (generally 50%). In case of a claim, CB will be reduced by 10% at the next renewal.
- Cost of Health Check-up : Health policies may also contain a provision for reimbursement of cost of health check up. Read your policy carefully to understand what is allowed.
- Minimum period of stay in Hospital : In order to become eligible to make a claim under the policy, minimum stay in the Hospital is necessary for a certain number of hours. Usually this is 24 hours. This time limit may not apply for treatment of accidental injuries and for certain specified treatments. Read the policy provision to understand the details.
- Pre and post hospitalization expenses : Expenses incurred during a certain number of days prior to hospitalization and post hospitalization expenses for a specified period from the date of discharge may be considered as part of the claim provided the expenses relate to the disease / sickness. Go through the specific provision in this regard.
- Cashless Facility : Insurance companies have tie-up arrangements with a network of hospitals in the country. If policyholder takes treatment in any of the net work hospitals, there is no need for the insured person to pay hospital bills. The Insurance Company, through its Third Party Administrator (TPA) will arrange direct payment to the Hospital. Expenses beyond sub limits prescribed by the policy or items not covered under the policy have to be settled by the insured direct to the Hospital. The insured can take treatment in a non-listed hospital in which case he has to pay the bills first and then seek reimbursement from Insurance Co. There will be no cashless facility applicable here.
- Additional Benefits and other stand alone policies : Insurance companies offer various other benefits as "Add-ons" or riders. There are also stand alone policies that are designed to give benefits like "Hospital Cash", "Critical Illness Benefits", "Surgical Expense Benefits" etc. These policies can either be taken separately or in addition to the hospitalization policy. A few companies have come out with products in the nature of Top Up policies to meet the actual expenses over and above the limit available in the basic health policy.
- Key Points to Remember when Choosing your Health Insurance Plan
  - Sum Insured by the policy
  - Co Pays / Deductibles / Sub Limits
  - Waiting Period for Pre Existing Diseases
  - Insurer’s List of network hospitals across India and Claim Settlement Ratio
  - Reputation and Claims paying capacity of the insurer
  - Premium to be paid for the coverage

The most important things to consider while choosing an optimum health insurance plan include:

The Optimum Sum Insured – every individual should first decide on the sum insured / coverage that they need given their current health exposure, age, risk factors etc.
Exclusions and Waiting Periods under the Plan – these are critical features to be considered while choosing the right plan. Eventhough most plans have comparable exclusions and waiting periods, one must still do a quick comparison to be aware and opt for the plan with the lowest waiting periods and minimal exclusions.
Benefits under the Plan – this is the key factor that decides the premium. It is strongly recommended to opt for a plan with more comprehensive benefits, even if it comes at a slightly higher premium. If one considers only premium, the coverage could be reduced significantly which may cause financial duress at the time of a claim.
The Right Insurance Partner – the insured should opt for an insurance partner based on their claim settlement capabilities and claims settlement ratio.
Strong and Wide Cashless Network - One must also ensure the insurance company has a reasonable strong cashless network across India because the insured could be hospitalised anywhere in India.
Day Care Procedures / Pre & Post Hospitalisation – these are also a few important features that must be present in the proposed plan. Day Care procedures are those surgeries and medical interventions that don’t require hospitalisation.
Co Payment by the insured – plans where the premium is low for a comparable sum insured could have a higher co pay, which is the % of the claim expense payable by the insured and vice versa, where a higher co pay will mean a lower premium. So whatever the insured is saving on premium will need to be paid as part of the co pay at the time of a claim.
Lifetime Renewability.

This is where a website like Eindiainsurance are useful and present to the customer all plan details and premiums allowing them to make an informed decision.

There are two possible scenarios possible if one is employed in India and the employer is providing a Health Insurance coverage. The employer could be providing a Group Health Insurance plan covering their employees and dependants or have an Individual Health insurance plan for each of their employees. Let us look at each scenario separately.

Group Insurance Plan Coverage of Employees – this is typically a family floater coverage for all the members of the family. In this case, if the employee is leaving the organization, he/she can approach the existing insurance company and request them to offer a family floater for the family with the same sum insured limits. The only difference in this case will be that the premium payable will be higher than the Group policy offered by the employer and hence the insured will need to agree to pay the higher premium. Secondly and importantly, the insured should request the insurer to provide a pre existing continuity benefit under the new plan. This will avoid the insured and his family going back to a 48 month pre existing waiting period. For example, if the employee was employed for 2 years and covered under the Group Plan of the Employer, then he/she can request the insurance company to continue the waiting period already crossed and hence under the new plan, the waiting period will only be 24 months, rather than starting from the first month and having a 48 month waiting period all over again.

Individual Insurance Plans for Employees –this is a far more easier option where all the insured will need to do is to apply for a portability of the existing policy to the same insurance company or another insurer. Assuming that the individual premiums earlier were being paid by the employer, the individual will now be required to pay the premium after leaving the organization. This same process holds good for the dependants also. Since the policies are ported from the earlier insurance plan, the pre existing waiting period continuity will be ensured.

The health insurance sector is easily one of the fastest growing segments in the insurance space in India. Ever increasing medical costs and increasing awareness levels are contributing to this growth, especially over the past few years. India is one of the most uninsured markets across the world with less than 20% of the population having some type of insurance coverage and in rural areas this falls to as low as 15%. Given this growth of health insurance, the industry is seeing significant changes in the range of plans which insurers are offering to customers. This is precisely why the IRDAI also offered licenses to insurance companies only focussed on Health Insurance, known as Standalone Health insurance companies (SAHI). These SAHI companies are leading the product innovation game and are at the forefront of unique product launches. So one shouldn’t be surprised to see a diabetes care or plans specially designed for cardiac patients. As mentioned earlier, the rising cost of medical treatments, inflation and the increased incidence of diseases (given the sedentary lifestyle) today have made health insurance a much needed insurance policy. A health insurance plan covers hospitalization expenses of the insured. Some of the more popular plans are :

Indemnity Plans

This is clearly to most popular and preferred insurance policy. Also known as “Mediclaim” these policies compensate the policyholder by reimbursing the actual hospitalization costs incurred by him/her subject to a maximum opted Sum Insured. The word ‘indemnity’ means compensation for losses or damages and hence this plan covers hospitalization cost, pre and post hospitalization cost, expenses on surgeries, ambulance costs, etc. Under the Indemnity Plan, the insured can opt for an Individual Policy or a Family Floater policy depending on their requirement.

Top-up Plans

A top-up health insurance policy is an additional coverage for insureds who have an existing individual plan or a mediclaim provided by their employer. These plans increase the insured’s coverage amount at lower incremental premium costs. Top-up plans can be taken as supplementary plans for enhancing the coverage if the existing plan does not provide adequate coverage. Each top up plan has a deductible limit in the plan which is the minimum sum insured up to which the plan will not provide cover to the insured. If the claim exceeds the deductible limit, the plan is triggered and the excess claim amount above the deductible sum insured is paid.

Benefit Plans

Also known fixed benefit plans, they pay a specific fixed sum insured amount for a claim irrespective of the actual expense incurred by the insured. For instance, in the event of a Critical Illness, if the SI is ₹2 lacs, the policy will pay the insured ₹2 lacs on diagnosis of the Critical Illness irrespective of whether the insured spent ₹1 lac or ₹5 lacs for the treatment of the illness. Some benefit plans include:

Critical Illness plans - Critical illness plans provide coverage against a list of defined critical illnesses. Although the list of illnesses covered varies from insurer to insurer, yet on the diagnosis of any of the covered illness, the insurer pays a lump sum amount to the policyholder irrespective of the subsequent treatment costs.
Hospital Daily Cash Plans – If the insured is hospitalised, and taken this plan, the policy will provide a fixed sum of money for each day of hospitalization and this does not depend on the actual hospitalization expense but is pre-fixed amount as per the plan.

Specialized Plans

These are specific plans offering coverages relating to only specific illnesses like Cardiac Care or Diabetes Care. So if a Diabetic wants to avail of a Health Insurance plan, regular plans will not offer coverage since diabetes will be treated as a pre existing condition. But under a Diabetes Plan, the insured even with a pre existing Diabetes condition will be offered coverage. Similar is the case for Cardiac Care. Persons with heart related complications can purchase this plan.

Frequently asked questions

Please find below some relevant FAQ’s for Individual Health Insurance.

What is Health Insurance?

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”.

Why is Health Insurance relevant and important today?

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.

What options of Health Insurance plans are available in the India market?

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.

What does a Health Insurance policy not cover (Excusions)?

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.

What are the factors that have an effect the Health Insurance premium paid?

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.

What is “health check” facility?

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.

What is a cashless facility? Is it available at all hospitals across India?

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.

Is there any Waiting Period for claims under a policy?

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.

Can the individual transfer their policy from one insurance company to another without losing renewal benefits?

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.

What is the maximum number of claims allowed over a year?

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.

If the policy is not renewed in time before expiry date, will the insured be denied renewal?

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.

Are there tax benefits available to the individual if I purchase Health Insurance?

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.

What are the Exclusions under the Retail Health policy?

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