Types of Health Insurance in India and their Benefits and Examples

In present times, medical care expenditures can be a considerable challenge. This is quite true because, in India, a proper health insurance policy could mean the difference between life and death. However, with such a broad selection of possibilities, settling on the best becomes an obstacle. In this article, we will deal with some of the main types of health insurance in India, consider their benefits, and give some examples that will help you choose the right type.

Individual Health Insurance

Individual health insurance falls into the category of health insurance, which is intended for a single person to cover his or her medical costs. Unlike the group health insurance plans that the employer provides, the individual plans are bought by you personally from an insurance company.

Benefits of Individual Health Insurance in India

That’s where individual health insurance in India swoops in like a financial superhero. Here’s how it can be a lifesaver:

Tailored Coverage: Unlike some employer-sponsored plans, individual plans give you an additional option. You get to choose:
- Sum Insured: This is the highest cost they will reimburse for your medical expenses. Select an amount that is suitable to cover the probable expenses in your city.
- Deductible: This is an expense that you pay before you receive the benefit from the insurance. The higher the deductible, the lower your premium. This is good, but you will pay more out of your pocket for covered services.
- Treatments Covered: Decide which particular therapies and procedures should be included in your plan, implementing personalization for particular health needs.
Financial Security: Personal health insurance is a financial lifesaver when accessing health care services. It represents a major portion of your hospital costs, surgery costs, and treatment fees. This will keep you from emptying your piggy bank or getting into high-interest debt.
Cashless Hospitalization (often included): A number of medical insurance policies provide cashless hospitalization as well. This implies the insurance carrier deals with the hospital, and the patient doesn’t need to worry about paying the upfront fee, which is often costly at times of stress.
Lifelong Security: On some work-based plans, they disappear when you leave the job, but individual health insurance is generally renewable for life as long as you pay the premiums. It offers continuous coverage throughout your entire life.
Tax Benefits: In India, your individual health premiums can be used towards tax deductions; therefore, you will enjoy extra cash relief.

Example: Meet Mohan, a 40-year-old businessman.

Sum Insured: 5,00,000
Deductible: ₹10,000
The plan embraces hospitalisation, operations, and large diagnostic tests.

Scenario: Mohan suffers from chest pain, and the diagnosis shows he has a heart problem. He requires an operation of ₹3 lakh.
Finally, Mohan coughs up the money for the ₹10,000 deductible.
The insurance company makes the remainder of ₹2,90,000 (₹3 lakh – ₹10,000 deductible) for the surgery.

The only money Mohan pays will be a share of the treatment amount, as his particular health insurance plan covers him. This alleviates the patients’ worries about the exorbitant medical bills and lets them focus on getting better.

Remember important pints :

Pre-existing Conditions: Certain plans, in turn, may have exclusions for pre-existing medical problems. Remember to state your preexisting conditions when you apply for the plan.
Claim Process: Make yourself conversant with the claim process of a company you are interested in to avoid unnecessary complications in times of claim.

Family floater insurance

Family floater insurance can be defined as a health insurance policy that covers all family members under a single plan. Generally, it is less costly compared with buying individual health insurance for every family member.

Imagine this: for example, you will ensure that your entire family has medical coverage for emergencies, but you hesitate to buy plans for each of them as they seem too pricey. That’s why superhuman Family Floater Health Insurance enters to protect everyone like a shield.

Here’s how it works:

One Plan for All: Rather than purchasing mutual policies for different family members, you get one family floater plan. This will take care of all persons under a single sum insured, and such a sum acts as a common pool of money that can be used for medical expenses.
Cost-Effective Champion: Now, the advantage is that a family floater is mostly cheaper than individual plans for everybody. Picture it as buying in bulk! You get wide coverage, including the family, at a significantly rational cost.

Benefits of Family Floater Insurance

Family floater insurance offers several advantages for families seeking a cost-effective way to manage their health insurance needs. Here are some key benefits:

Budget-friendly: Family floater plans are priced much cheaper than buying individual health insurance policies for every family member. A flat premium is usually charged irrespective of the sum insured; thus, it is more affordable to cover the entire family.
Simplified Management: Having only one family floater makes management of your health insurance more straightforward. The only document you need to worry about is one policy form, a renewal date, and a claim procedure, which will cut down on the time you spend on paperwork.
Flexible Coverage: Families can enjoy the convenience of adding or removing members as required under most family floater plans. This feature is very helpful for developing families or those with dynamics that change. For instance, a newborn baby can be added, or you can remove the parents when their dependency no longer applies.
Shared Coverage: A common sum insured functions as the communal pot, which everybody gets to dip into when paying their medical bills. This is useful if, for example, one family member needs a drastic medical intervention, as the remaining coverage may still be used for other family members if required in the same policy year.
Potential for Cashless Hospitalisation: A majority of the family floater plans include the cashless hospitalisation option. With the last resort, the insurance company pays the hospital bill directly; hence, you need not pay the hospital upfront during an emergency. It is good to have someone to depend on when such situations arise suddenly.
Tax Benefits: Many countries, including India, allow the health insurance premium paid towards family floater policies to be considered for tax deduction purposes. Such will complement the existing financial relief and eventually lead to lower health insurance costs.

Example: For example, assume a family floater plan with a sum insured of ₹5 lakh. Coverage will include you, your spouse, and two dependent children under this plan. In the case a family member who needs to be admitted to the hospital for ₹3 lakh treatment, the insurance company pays the amount. The remaining ₹2 lakh of the policy will be there to cover any other family member who requires medical assistance in the future.

Senior Citizen Health Insurance

A health insurance plan created especially for those 60 years of age and older is called Senior Citizen Health Insurance. This plan provides complete coverage for medical expenditures incurred due to disease, accidents, and age-related illnesses, catering to the specific healthcare needs of elderly adults.

Benefits of Senior Citizen Health Insurance:

Hospitalisation Expenses: Expenses relating to surgeries, medicine, doctor’s fees, ambulance fees, and room rent (capped to the amount insured).
Pre- and Post-Hospitalisation Expenses: Supports the cover of charges related to tests before and after hospitalisation, like paying for consultations and medicines.
Daycare Procedures: Pays for a number of medical procedures that do not involve an in-patient stay at a hospital. Use our AI to write for you about finance.
Home Care Treatment: Sometimes coverage extends to home care delivered by a qualified medical person, if this is not a situation requiring hospitalization.
AYUSH Treatment: Provide the expenditure for alternate systems of Indian medicine, i.e., Ayurveda, Yoga & Naturopathy, Unani, Siddha, and Homoeopathy (depending on the plan).
Pre-existing Conditions: Unlike most health insurance that does not cover pre-existing conditions, usually a specified waiting period (typically 2-4 years) applies, after which senior citizen plans cover them.
Renewal for Life: In the same way as the other health insurance plans, senior citizen health insurance insures you for your life as long as you are current with the payment of your premium. This secures you financial support throughout your retirement period.

Example : The ages of Mr. and Mrs. Mohan are 65. They are worried about the possibility of age-related ailments as well as the growing expense of healthcare. They choose to get a senior citizen health insurance plan, each with a Rs. 5 lakhs sum covered.
Mrs. Mohan requires hip replacement surgery after suffering a fall a year later. The 3 lakhs that it costs for surgery. The whole cost is covered by their senior citizen health insurance plan (up to the sum insured limit).

Critical Illness Insurance

Critical illness insurance is the kind of health insurance plan made to give you financial stability in the event of any serious sickness.

Covered Critical Illnesses:

Cancer
Stroke
Renal failure
Paralysis
Coronary artery bypass surgery
First heart attack
Pulmonary arterial hypertension
Multiple sclerosis
Aortic graft surgery

Benefits of Critical Illness Insurance:

Financial Security: The lump-sum settlement helps cover costs for medical care, daily expenses, and lost wages.
Protects Savings: Stops you from draining through your savings for an expensive health problem.
Lifetime Renewal: Others may have a lifetime renewal, which means you will never lose your coverage.
30-Day Survival Clause: Basically, all plans provide 30 days after diagnosis to be acknowledged eligible to receive payout.
Family History Consideration: This plan could be very useful if you have a history of family-related diseases.

Things to consider:

One-Time Payout: The amount insured is paid in a single lump sum upon claiming.
Policy Termination: The policy period in this case ends with the claim settlement.

Personal Accident Health Insurance

Personal Accident Insurance (PA) is an insurance plan that reimburses you if you die, become disabled, or are injured due to an accident. It provides protection against the unforeseen and can be a good addition to your holistic approach to financial planning.

Benefits of Having a Personal Accident Policy:

Financial Security: The enormous medical expenses that follow an accident are another problem that can ruin your finances. The PA has a great benefit for patients who undergo hospitalization, surgeries, and other treatments since the costs are covered by the insurance.
Death Benefit: A policy pay-out represents a lump sum amount that bereaves your family member in an unplanned event of death so as to support the family during a critical time.
24/7 Support: Some of the PA insurance carriers have this emergency aid around the clock, covering all accidents in the whole insurance program. That could be even more important to do at any time when a medical emergency or a claim process appears.
Relatively Low Premiums: Although the premiums for comprehensive health insurance plans are substantially lower compared to paid-for-deductible health insurance plans, the plans are still more affordable for many.

Example : Here comes Suresh, a student at college and a basketball player who has a challenging schedule. He fears getting injured while playing for the team. He gets a Personal Accident (PA) health insurance policy with a sum insured of ₹1 lakh.

What’s covered?

Hospital bills: If by chance Suresh sustains a leg injury during basketball practice and subsequently has to receive treatment at the hospital, the insurance provider could pay for the hospital bill, another ₹20,000 or even ₹1,00,000 (as per the policy).
Medical expenses: Such expenses may include the costs of a cast or medications required to treat the sprained ankle. They can also include physical therapy, if needed.
What’s not covered? The insurance would not pay for that and would still be your issue, for example, if suddenly you got sick due to the flu.

The benefit? If Suresh suffers an injury while playing basketball, insurance allows him to cover the expenses, so he need not worry about additional costs during his recovery period.

Important to remember:

Accidental Coverage: This insurance covers car crashes specifically. Except for medical conditions that are caused by accidents, it won’t cover such illnesses.
Policy Wording: Pay close attention to the coverage terms and conditions to make sure you know which events are covered, the exclusions, and the procedures of the claim.
Sum Insured: Pick a coverage value that is enough to cover all potential medical expenses and other financial needs in case an accident occurs.

Maternity Insurance

Pregnancy is one of the greatest miracles of life; however, major medical expenses are its accompanying worries. Maternity insurance helps people financially since it covers a wide range of pregnancy costs.

Benefits of Maternity Insurance:

Pre and Postnatal Care: Maternity coverage normally takes care of the costs incurred for the prescribed visits to the doctor for consultations and ultrasound scans, as well as other prenatal checkups that occur before childbirth. This can include antenatal visitations after delivery for both the mother and baby.
Delivery Charges: This covers a large part of the budget. Maternity insurance covers either normal delivery or a caesarean section (C-section) performed if the doctor recommends.
Hospitalisation Expenses: The plan covers hospitalisation expenses during pregnancy as well as post-delivery, including room rent, nurses’ fees, and other incidental hospital charges.
Newborn Baby Coverage: Some insurers provide that the expenses for the hospital admission of a newborn baby are covered in case of complications after its birth. It is a relief that they are no longer alone.
Cashless Hospitalisation (often included): Similar to other health insurance policies, cashless hospitalisation can significantly lower the cost of giving birth. The insurance company releases the payment through the network hospitalisation.

Example : Meet Preethi, a young woman who is the upcoming parent of her first baby. She is certainly excited, but she also realises the possibility of these exorbitant medical bills. To get financial peace of mind during her pregnancy, her decision is to buy a maternity insurance plan that covers 3 lakh Indian rupees.

Here’s How preeth’s maternity insurance might help

Regular Checkups: During the whole period of her pregnancy, Preethi has the privilege to use her insurance for routine exams, for example, ultrasounds and blood tests.
Delivery: During the delivery session, Preethi goes through a C-section. The insurance will help cover the hospital’s charges and her stay after the C-section procedure.
Postnatal Care: After delivery, Preethi has postnatal monitoring, in which she and her newborn baby are included. It is part of the supplementary insurance that comes with the maternity cover.

Important to remember:

Waiting Period: Most maternity plans have a waiting insurance period, which usually ranges from 3 to 4 years before pregnancy-related expenditures are covered. Ensure in advance that the plan is allocated if you plan on getting pregnant.
Sum Insured: Select the scheme having an insurance cover that is appropriate for the probable expenses for delivery and hospital stays in your city.
Plan Details: Take time to scrutinize the policy wording to identify what’s covered, what isn’t, and the claims instructions.

Top-Up Health Insurance

A health insurance top-up policy acts as an extra fillip to your existing health insurance plan. It steps in to fill another gap created by the limit (cap) of your main plan.

Benefits of Top Up Health Insurance:

Affordable Coverage: Compared to the upgrade of the plan sum insured, the top-up plans are much cheaper. This is because you pay only for the extended coverage that you need, not the complete sum assured.
Increased Financial Protection: The medical costs keep on increasing. A top-up plan guarantees that you are financially covered against high hospitalization expenses, which can drain off your primary plan’s coverage.
Flexibility: You are allowed to set your level of the top-up plan’s deductible. A higher deductible means a lower premium and, simultaneously, vice versa. It allows you to craft a plan that meets both your budget requirements and an acceptable level of risk.
No Claim Bonus Protection: Unlike some standard health insurance policies, filing a claim on your top-up plan will not affect the possible No Claim Bonus (NCB) discount you could have achieved on your primary policy.

For example, if your chosen health insurance plan has a sum assured of Rs. 3 lakh, Besides, you are on a top-up policy with Rs. as your sum insured. Rs. 5 lakhs is my policy limit, with a deductible of Rs. 1 lakh. Regrettably, you fall into a medical disaster accompanied by Rs. 4 lakhs.

It means that your main plan only has Rs. 3 lakhs.
Thus accounting for a balance of Rs. In case the expenses exceed the deductible that your top-up plan (Rs. 1 lakh) offers, the top-up policy will kick in.
This would be a one-time top-up plan that would bring the total amount to Rs. 1 lakh.

Unit-Linked Insurance (ULIP)

A unit-linked insurance plan (ULIP) is a kind of insurance that gives an insured person life cover and investment opportunities at the same time.

Benefits of ULIPs:

Dual Benefit: Your family will receive insurance, and you will be able to reap investment yields.
Investment Flexibility: ULIPs offers a diversified range of funds you can invest in, enabling you to align your investment strategies with your risk appetite.
Market Participation: You get the right to grow your funds through your selected investment vehicles when the market is performing well.
Partial Withdrawals: Some of the ULIPs allow you to withdraw a certain amount out of the fund after a locked-in period of 3-6 years. This acts as a minimal threshold during emergencies.
Tax Benefits: In certain instances, the premiums towards ULIPs may qualify for tax breaks according to existing tax legislation. (Tax legislation is subject to change.)

Example: Assume you invest in some ULIP plan with a death benefit of Rs. 10 lakhs. You have to pay a yearly premium of Rs. 50k. The insurance agency splits this premium. The portion is for your life insurance policy, and the rest goes into your investment (funds such as equity or debt funds).

Life Cover: In the case of your demise during the period of this plan, your designated beneficiary receives the sum assured (in this example, 10 lakhs).
Investment: The rest of the premium is placed in investments according to your risk-taking level. The price of these units may vary depending on the market climate. At policy maturity (at the end of the policy), you are rewarded with the accumulated unit value plus bonuses provided by the insurance company.

Important to Consider:

Market Risk: In contrast with standard insurance policies, ULIPs are market-oriented. The returns vary depending on the choice of funds. There is a chance of going bankrupt if the markets crash.
Charges: ULIPs, on the other hand, are more complex in that they involve charges such as premium allocation, policy administration, and fund management fees. Consider these fees as you invest.
Lock-in Period: ULIPs are subject to a lock-in period that is typically 5–6 years. A policy termination before the guaranteed period could lead to penalties or lower returns.

ULIPs are a perfect choice of product for people who require insurance coverage along with investment growth prospects. But make sure to evaluate your risk tolerance, investment goals, and costs in line with the fee.

In finding the most appropriate health insurance plan option among many, these four aspects are considered: medical condition, age, family relations, and budget. With a solid grasp of the various plans and the advantages that they offer, you can take the necessary measures and put together a comprehensive and customised health insurance plan to shield yourself and your loved ones from the financial costs of health emergencies.

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Note: These are just a few examples. Specific features and benefits will vary depending on the insurance provider and plan chosen. It’s important to carefully compare plans and choose one that meets your individual needs and budget.

FAQs

Q: Am I eligible for healthcare if I have pre-existing health issues?

A: Yes, but pre-existing conditions mean

coverage might be subject to the waiting period or exclusion.

Q: Which health insurance plan is the best for me?

A: Think of coverage amount, network hospitals, premiums, deductibles, and exclusions. Consider your medical demands and evaluate various plans before picking one.

Q: What are the documents needed to buy health insurance?

A: Usually, you are required to submit identification proof, address proof, age proof, and medical history particulars.

Q: Is there any tax relief on the premiums for a health insurance policy?

A: Yes, health insurance premiums will be allowed as tax deductions as per Section 80D of the Income Tax Act.

Q: Can I transfer my existing health insurance policy from one insurer to another?

A: Yes, you can transfer your health insurance policy to another insurer without losing any benefits, such as waiting periods and accumulative bonuses.