8 Types of Health Insurance Policies in India (2023) – Benefits and Importance
Health insurance policies offers financial protection in case of medical emergencies that may arise due to an accident or critical illness. With a host of medical coverage plans, such as individual health insurance, family floater health insurance, senior citizen plans, and more available in India today, you have plenty of options to choose from based on your preferences.
For your better understanding, we’ll be discussing different types of health insurance plans in India and their benefits.
Types of Health Insurance Plans in India
Here are the different types of medical insurance plans available in India:
1. Individual Health Insurance Plans
- Designed to provide coverage only to the insured person/policyholder.
- The premium for these types of medical insurance plans is higher in comparison to other policies.
- The amount of premium is determined based on personal factors, including medical records and age, to name a few.
- The policy could cover both pre and post-hospitalisation expenses.
- You may be able to utilise the benefits for your entire lifetime as long as you renew the policy every year.
- These policies ensure financial protection from several critical diseases.
2. Individual Health Insurance Plans
- A family floater insurance plan provides medical coverage to all members of a family up to the value of the insured amount.
- The sum insured is higher in comparison to an individual health insurance plan.
- You can consider it as a cost-effective alternative to an individual health insurance policy, where you don’t have to worry about multiple premium payments.
- Other members of the family can also be covered under the sum insured when the need arises.
- Cashless hospitalisation is accessible if the insurer receives the information within 24 hours of hospitalisation.
3. Individual Health Insurance Plans
- These policies fulfil the insurance requirements of individuals who are above the age of 60.
- The premium for such plans usually falls in the higher bracket.
- A senior citizen health insurance plan can cover pre-existing diseases. That said, the coverage depends on the terms and conditions of the policy.
4. Group Mediclaim Insurance Plans
- This plan covers the medical expenses of a group of employees or workers of any particular organisation.
- In some scenarios the insurance coverage provided by the employer might also be extended to the family members of the employees.
- In addition, they can get a more affordable plan than individual insurance policies and benefit from tax deductions.
5. Critical Illness Insurance Plans
- This kind of insurance plan provides coverage for critical diseases/illnesses, such as paralysis, cancer, kidney ailments, and more.
- Such policies help you stay prepared during medical emergencies.
- Though many insurance service providers offer such plans as an add-on benefit, you can also sign-up for a stand-alone critical illness insurance policy to get maximum benefits.
- Premiums could be higher based on the severity of the disease
- Such plans usually come with 2 to 3 years of waiting period
6. Personal Accident Insurance Plans
- Such plans offer protection against accidental deaths or disabilities caused due to accidents.
- It can also cover pre-and post-hospitalization charges, depending on the policy provider you have opted for.
- In case of death, the nominee receives compensation up to the amount insured.
7. Maternity Health Insurance Plans
- These policies provide coverage for expenses incurred during the prenatal, delivery, and postnatal stages of pregnancy.
- It can also cover the cost of ambulance transportation.
- Since most maternity medical insurance schemes have a waiting period, it is advised to opt for this policy during the early to mid-stages of pregnancy.
- You can purchase a maternity insurance plan along with a basic health insurance policy as an add-on.
8. Specific Disease Insurance Plans
- This is a niche plan that provides insurance coverage against specific diseases.
- This type of health plan follows a focused approach and does not have clauses for long waiting periods.
- Policyholders can file a claim at any stage of the disease.
- Diseases like diabetes, kidney issues, stroke, cardiac ailments, dengue and even COVID-19 are covered under such plans.
- People with a high chance of contracting a certain disease prefer these policies.
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Importance of Buying a Health Insurance Policy
Medical care is expensive, and in the private sector, prices are only hiking. To be able to take care of yourself and your family without any worries, you need to get a health insurance plan. All you have to do is pay an annual premium that would ultimately take care of all your medical expenses.
- One of the main benefits of availing health insurance is that you will get cashless treatment. This means in case of an emergency, you do not have to struggle to accumulate cash. Every insurance company has a tie-up with a network of hospitals that will serve you without demanding cash.
- Another important benefit of having health insurance is that it covers any pre or post-hospitalisation cost, depending on the plan that you choose. It also includes the transportation cost in case any ambulance is hired.
- You can opt to receive free health check-ups. Any health check-ups that you may need to conduct will also be covered under the health insurance based on your previous NCBs.
- Under Section 80D of the Income Tax Act, any premium paid for health insurance purposes is tax deductible.
Benefits of Health Insurance Plans
There are various benefits of availing of a medical insurance plan. Here’s a look at them in brief:
1. Cashless Treatment
Insurance providers have tie-ups with hospitals, which are referred to as their network hospitals. These healthcare facilities provide cashless treatment to insured individuals if they are hospitalised.
To be precise, policyholders can get treated from these network hospitals without paying anything out of their pocket.
The health insurance provider reimburses the amount directly to the hospital whenever you make a claim. However, note that this claim has to comply with the medical insurance plan’s terms and conditions.
2. Tax Benefits
As per Section 80D of the Income Tax Act 1961, individuals can claim a deduction on the amount of premium they pay for a medical insurance plan during a financial year. The maximum deduction you can get under Section 80D is capped at Rs.25,000 (if you are below 60 years).
If you include your parents in the policy, you can get an additional deduction of Rs.25,000, provided your parents are below 60 years. So, the total deduction you can get with the inclusion of your parents is Rs.50,000 (Rs.25,000 + Rs.25,000).
A tax deduction can be further extended to Rs.50,000 for your parents provided they are above 60 years. In such a case, the total benefit translates to Rs.75,000 (Rs.25,000 + Rs.50,000). In case you and your parents are above 60 years, the total tax benefit you can get is Rs.1 lakh (Rs.50,000 + Rs.50,000).
3. Financial Protection against Rising Medical Expenses
With soaring healthcare expenses, signing up for a health insurance plan can save you from medical expenses significantly. Health insurance schemes provide comprehensive coverage that helps policyholders to overcome these challenges.
4. Absolute Coverage
Opting for the right health insurance scheme can help you get access to the best medical facilities without worrying about expenses. Usually, a medical insurance plan provides coverage for the following expenses:
- Expenses incurred during pre-hospitalisation and post hospitalisation stages
- Ambulance charges
- Inpatient hospitalisation costs (cost of medicines, boarding expenses, etc.)
- Expenses incurred for domiciliary hospitalisation
- Day-care expenses, etc.
Benefits of Getting Health Insurance at a Young Age
There is really no specific age when you should opt for health insurance. However, the earlier you get insured, the more benefits you will receive over your life span. Read further to know more about why is it advisable to get insured in early life-
- The very first benefit of getting your health insurance at a younger age will be a low premium. With an increase in age, the premium of any health insurance also increases.
- Generally, health insurance companies exclude people with pre-existing diseases. The older you get, the more prone your body is to sicknesses. Buying a health insurance plan early lets you get coverage against any future ailment.
Points to Check before Choosing a Health Insurance Plan
Individuals must make sure to keep these points in mind before opting for a medical insurance scheme:
1. Sum Insured
Sum insured refers to the maximum amount that an insurance provider will be liable to pay to you in a year as a healthcare expense. It is always beneficial to avail of an insurance policy with a high sum insured amount. However, before signing up for a policy, it’s advised to go through the fine print carefully.
2. Waiting Period
Choose a medical insurance plan that has a minimal waiting period.
3. Claim Settlement Ratio
Make sure to opt for a health insurance provider with a high claim settlement ratio.
4. Network Hospitals
Choose an insurance company that has a large number of network hospitals.
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Final Word
Medical emergencies are cost-intensive, however with prudent financial planning and buying the right insurance policy, you can save a lot on your expenses. However, it’s advised to compare the types of health insurance plans available before signing the dotted line.
FAQs
Ans: Insurance companies provide a discount known as no claim bonus (NCB) to the insured for each claimless year. It reduces the amount of premium payable by a specific percentage when one renews his/her policy. For instance, Navi health insurance offers an NCB of 10%.
Ans: As per IRDA guidelines, health insurance providers in India provide cover for inpatient and outpatient expenses incurred for treatment of Covid-19.
Ans: Yes, many health insurance companies offer this facility nowadays. One can change the health insurance provider or switch to a different medical insurance policy offered by the same insurer, by completing certain formalities.
Ans: Yes, Unit Linked Insurance Plan or ULIP is a type of health insurance policy. It allows the dual benefit of a life insurance cover along with an investment that fulfils your financial goals.
Ans: Health Insurance is a must if you plan on securing your finances against expensive medical bills. It provides you with optimum coverage in all aspects of health. And the benefits gained can be quite useful not just to you, but to your family as well.
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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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