Everything you need to know about health insurance

When the best medical care is available to you, you would always opt for it. Unfortunately, such medical care often comes at a high price. Many families either lose their savings or go into debt to pay for medical expenses. It is in such instances that health insurance asserts its importance. Adequate health insurance helps you pay for otherwise expensive treatments, thus protecting your savings and giving you peace of mind. If the insured meets with an accident or requires treatment for conditions requiring hospitalization for more than 24 hours, health insurance comes to the rescue. Premiums paid (upto Rs. ) for self,  spouse and children are eligible for tax exemption under Sec 80D of Income Tax Act 1956.

How to Select a Health Insurance Policy?

Health Insurance policies are available as a ‘Floater policy’ or as an ‘Individual policy’.

Family Floater Plan: It is a single policy that covers entire family. Under this plan, an entire family shares the total insurance available under their policy with the benefit being a lesser combined premium than the individual premiums for each and every family member.

Individual Health Insurance: This plan offers protection to an individual wherein the entire Sum Insured can be claimed by the policy holder. However, the premiums for all the Individuals in a family put together would be higher when compared to a Family Floater Plan and as such these plans are suitable for single Individuals.

What are Sub-Limits?

Some Insurance companies impose sub-limits on room rents and ICU charges by a percentage of Sum Insured. For instance, a Rs.3 lakh policy with 1% ceiling on room rent would mean the patient can only claim Hospital room rent not exceeding Rs.3000 per day.

Similarly, a disease-wise sub-limit would restrict the client to claim the Health Insurance amount only to the extent of the sub-limit. In other words, even if the Hospital charges the patient higher room rent or higher charges for treatment, the difference amount has to be borne by the client only.

It is advisable to buy a Health Insurance policy without any sub-limits unless the customer clearly understands the policy terms and ready to retain some amount of risk.

Pre and Post-Hospitalization Expenses

Most Health Plans available in the market come with a cover for 60-day pre-hospitalisation and 90-day post-hospitalisation. But some plans offer the same for only 30 days and 60 days. It is advisable to buy a Health Insurance Plan, which gives 60 day pre and 90 days post-hospitalisation cover.

Is Medical Examination Required?

Medical Exam may not be required for all those aged below 45 years, who want to buy a Health Insurance product. Medical Exam may be required, if there is an adverse Medical History or if the Sum Insured is above Rs.10 lakhs.

What is covered under a Health Insurance Policy?

  • Expenses arising out of Hospitalization for more than 24 hours.
  • Expenses arising out of Surgical procedures, which do not require 24 hrs hospitalisation (as per the list of such procedures provided by the Insurance company).
  • Coverage against pre and post hospitalization expenses as per policy terms.
  • Coverage for Pre-Existing-Diseases as per the policy terms.
  • Treatments for accidents from day-1.
  • Reimbursement of Out Patient expenses in some policies.
  • Personal Accidents & Permanent/Partial Total Disability expenses in some policies.

What is not covered under a Health Insurance Policy?

  • All treatments during the first 30 days of the policy except accidents (in case of new policies).
  • Pre-existing diseases, for a period of 2 to 4 years from the date of risk.
  • Treatments taken as Out Patients (OPDs).
  • Cosmetic Treatments.
  • Any other illness specifically excluded by the Insurance Company.
  • Maternity expenses will be covered after a period of 3 or 4 years from commencement of a Family Floater Health Insurance policy, depending upon the terms and conditions of the Health Policy.

Claims Settlement

There are two different processes for claiming Health Insurance, based on the hospital that the insured individual opts for. If it is a network hospital, all the formalities are taken care of by the hospital (upon filling the pre-authorization form). If it is a non-network hospital, then the policyholder needs to pay the bills and then apply for reimbursement from the Insurance Company by submitting the filled-in claim form with valid bills as enclosure.

Co-Pay: It is an option where the policy holder agrees to pay a certain percentage of each and every claim amount. For example if the policy holder opts for 10% Co-Pay, then the client needs to pay an amount of Rs. 10,000 for a claim of Rs. 1 lakh and the remaining amount of Rs. 90,000 will be paid by the Insurance Company.

What are Network Hospitals?

Over 4000 hospitals pan India; have tied up with different Insurance Companies as their Network Hospitals; where Cashless facility can be availed by the client. If the treatment is obtained outside these hospitals, the claim amount needs to be reimbursed. However, some Insurance Companies reimburse only to the extent of 90% of the claim amount where cashless facility is not available.

Who is a Third Party Administrator (TPA)?

A Third Party Administrator is an IRDA approved Healthcare Claim Processing Agency managed by experts in the field of Medicine and Administration, who co-ordinate the claim process between the Insurance Companies and the Network Hospitals. Some of the General and Health Insurance companies have their own in-house Health Administration Teams; while most of the Insurance Companies outsource their Claim Processing to a Third Party Administrator.

Why an Insurance broker?

All the Insurance Broking Companies are mandated by IRDA to represent the client and provide them with best possible insurance solution from among the various options available with different insurance companies, as compared to an Agent who represents only one insurance company.

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