What is Health Insurance?
Health insurance is a type of insurance plan designed to cover the medical expenses incurred when someone in your family gets hospitalized due to an accident or any health-related issue. Considering the increasing medical expenses a single hospitalization can bring down one’s lifetime savings. For financially rich people who can afford the high medical costs, this may not be a big issue. But in the case of a middle-class family who are dependent on a monthly salary, any such sudden hospitalization can be heavy on the pocket and make them lose all their savings if the patient has to stay more days in the hospital due to any critical health issue.
Health insurance helps to address this difficulty. Let see how an insurance concept works. Funds in smaller amounts from a large number of people with a similar requirement are gathered to form a pool of big amount. When any one person among this group needs the money for the mentioned expenses, it is spent from this pool of amount gathered from the group. To better understand this concept let’s consider one example.
You and another four members from your friend circle gather funds from each person to form a pool of amount. In future, if anybody from these 5 members group needs money for expenses, then they can use the funds from this pool of amount. Since the number of people involved in fundraising is less in this example the probability of anyone among the group getting sick and requiring money is high. In the case of the insurance industry, the insurance company raises money from a large number of people. This small investment spent from a single person’s pocket to purchase policy is referred to as the premium. Since the pool is high, a big amount is gathered and the insurance company can afford the sum assured amount when someone from this group needs coverage.
Below mentioned is the list of health insurance providers in India –
- Acko General Insurance Ltd.
- Aditya Birla Health Insurance Co. Ltd.
- Agriculture Insurance Company of India Ltd.
- HDFC ERGO Health Insurance Limited (Earlier It was Apollo Munich Health Insurance Company Limited)
- Bajaj Allianz General Insurance Co. Ltd
- Bharti AXA General Insurance Co. Ltd.
- Cholamandalam MS General Insurance Co. Ltd.
- Manipal Cigna Health Insurance Company Limited
- Navi General Insurance Ltd.
- Edelweiss General Insurance Co. Ltd.
- ECGC Ltd.
- Future Generali India Insurance Co. Ltd.
- Go Digit General Insurance Ltd
- HDFC ERGO General Insurance Co.Ltd.
- ICICI LOMBARD General Insurance Co. Ltd.
- IFFCO TOKIO General Insurance Co. Ltd.
- Kotak Mahindra General Insurance Co. Ltd.
- Liberty General Insurance Ltd.
- Magma HDI General Insurance Co. Ltd.
- Max Bupa Health Insurance Co. Ltd
- National Insurance Co. Ltd.
- Raheja QBE General Insurance Co. Ltd.
- Reliance General Insurance Co.Ltd
- Reliance Health Insurance Ltd.
- Religare Health Insurance Co. Ltd (Recently Renamed as Care Health Insurance Co. Ltd)
- Royal Sundaram General Insurance Co. Ltd.
- SBI General Insurance Co. Ltd.
- Shriram General Insurance Co. Ltd.
- Star Health & Allied Insurance Co.Ltd.
- Tata AIG General Insurance Co. Ltd.
- The New India Assurance Co. Ltd
- Oriental Insurance Co. Ltd.
- United India Insurance Co. Ltd.
- Universal Sompo General Insurance Co. Ltd.
How can I purchase a health insurance plan for my family?
All the above mentioned insurance companies provide health insurance in India. Years before when the technology was not well developed the only mode of insurance purchase was thorough offline mode through some insurance agent. But these days due to advancements in technology and cheaper internet packages, the number of people using smartphones has increased. These days you can purchase a health insurance plan also from your smartphone itself sitting at the comfort of your home like you do any online purchase.
Insurance providers sell the policies online through their online portal or any intermediary channels like TPAs, banks, web aggregators, agents, etc. Visiting individual websites of every insurance company to compare with each other may be a tiring exercise and may not be easy for everyone. There are some online platforms where you can compare multiple plans with each other to arrive at a valid decision to choose the best available plan.
Need for Family Health Insurance Plans in India
The main need for health insurance in India is the increasing medical costs, particularly if someone has to take treatment for any critical illness or if has to undergo any major surgery. Unfortunately due to uncertainty in government-managed hospitals, most people prefer going to private hospitals for quality treatment.
Post Pandemic Situation of Health Insurance in India
The health insurance industry is witnessing substantial growth after the incidence of COVID-19 impact. Awareness about the importance of health insurance among the general public has increased and people searching to get health insurance has increased after the COVID-19 issue.
All health insurance companies started to address the Coronavirus treatment costs also after the outbreak. But unfortunately as per the general terms and condition in health insurance policies the costs incurred in some expenses of hospitalization doesn’t get counted under health insurances. Few such examples are costs incurred for PPE kits, gloves, face masks and head shields, and any consumables used for the patient, etc. In general, such costs do not cross 5% in most cases in normal health conditions or surgeries. But in the case of coronavirus treatment the situation different. The costs incurred in this type of expenses are more. Moreover if the patient needs ventilation or oxygen, or ICU, the total cost can go high. In addition to it, if the patient has any other health issues, treatment may be needed to address that conditions also which further increases the treatment cost.
Considering all these, IRDAI the authority that governs all the insurance companies in India had advised all the insurance providers to offer Corona specific health insurance plans recently from July 10th 2020 onwards.
What are the key factors to consider while buying a family health insurance?
It is important that you do some research on the best available health insurance plans before purchasing a plan. Compare the available plans based on your requirement. If you are not sure how to select the best plans, you can approach our health insurance advisor who is aware of various plans in the market. They can guide you in the process of purchasing the best plan for you. They would also help you to get through any difficulties in the process of purchasing the plan and also help in post-sales service like claim related issues.
What is covered in health insurance?
A health insurance policy basically covers medical costs incurred on hospitalization and some other benefits like mentioned below.
24 hours of hospitalization
Typically a health insurance policy covers medical expenses for hospitalization only when the patient has to stay at the hospital for a minimum period of 24 hours.
Health insurance also covers some daycare treatments like cataract, dialysis, chemotherapy, and, radiotherapy, etc. which does not require 24 hours hospitalization.
Pre and post Hospitalization costs
Pre hospitalization expenses can be of – tests, medicines, and doctor’s fees, etc. Post hospitalization expenses can be of – expenses incurred during recovery and follow-up. Generally, 30 days Pre and 60 days post hospitalization is covered. This may vary from company to company.
Age Limit for Health Insurance
It varies from company to company. Typically entry age starts from 3 months to 80 years and above. Some companies have no limit for entry age. All companies provide lifelong renewal benefit as per IRDAI regulations.
Who are all covered in Family health insurance?
Only immediate blood relations are covered in the family health insurance policy. The person who purchases the policy and his spouse, dependent children below 24 years of age, dependent parents, and parents in law can be covered in a health insurance policy.
For example, if you are a combined family like you, your spouse, kids, and your brother, his spouse, and their kids. In this example, you and your brother have to take separate family floater plans. All of you are not considered as a single-family while purchasing a health insurance policy.
What is not covered in health insurance?
- Pre-existing conditions (not to exceed 48 months)
- 30 days waiting period in general for other than accidents
- 24 months waiting period for specific diseases like cataract, hernia, hydrocele, piles, gout, etc.
- Plastic/cosmetic surgery unless medically recommended
- Preventive measure like vaccination inoculation
- Cost of spectacles, contact lens, hearing aid
- Dental treatment unless requiring hospitalization
- War and allied perils, nuclear weapon / ionizing radiation
- Congenital diseases, defects, anomalies
- Psychiatric psychosomatic disorders
- HIV / AIDS
- Participation in hazardous sports
- Hospitalization primarily for diagnostic purposes, lab examinations, unrelated to any illness or disease requiring hospitalization.
- Pregnancy, childbirth, any complications thereof
- Naturopathy treatment
This list is only illustrative, actual exclusions may vary from company to company and product to product.
Below mentioned are some key points to look for in a health insurance policy while deciding which plan suits your need and affordability.
1. Hospitalization cover
This means coverage of expenses incurred in hospitalization only if the patient has to stay in the hospital for a minimum period of 24 hours. All health insurances cover this option which is the bare minimum in every health insurance policy.
2. Room rent limit
The room rent limit is one of the key deciding factors of how much your final bill at the hospital going to be. Some health insurance companies define this feature in terms of room rent amount, and some companies define it as room type like shared room, twin sharing room, single non-sharing, single ac room, etc.
This feature is important because the hospitals define the costs of various services provided during hospitalization based on room type or room rent slab.
For example, if you have chosen a plan with a room rent limit say for 5000 rupees. But while joining in the hospital if there is no availability of the category you have chosen and if you join in a room that costs higher than you have in the plan. In such a case, the insurance company will pay only for the expenses incurred within that limit. Any additional charges have to be paid out of your pocket. This calculation is done in terms of the percentage difference of the room rent limit mentioned in the policy document with the actual room rent you have joined.
Co-pay is the partial amount that you have to pay out of your pocket. This is in general defined as percentage. For example, if the Co-pay of the plan is 20%, then you would be paying 20% of the bill amount, and the remaining 80% would be paid by the health insurance company.
4. Waiting period
The waiting period is the tenure through which the insurance is not covered for a specific type of critical illnesses like diabetic, cardiac issues if they already exist at the time of purchasing the policy. This varies from 2 years to 4 years depending on the plan and company. Health insurance plans with shorter waiting periods tend to be a bit expensive compared to plans with a longer waiting period.
5. No Claim Bonus or Cumulative Bonus
No Claim Bonus (NCB) or Cumulative Bonus is the additional cover offered by insurance companies if there is no claim in a policy year. This additional bonus is added in the next year. Insurers offer a cumulative bonus of 5% (claim free year) until it reaches 50%. However, it would vary from company to company depending on the plan. Plans with high NCB cost high compared to plans with lesser NCB or no NCB.
The below chart is an example graph of No Claim Bonus. For the illustrative purpose, we have taken an example of 10 lakhs health insurance plan. Let’s check the cumulative increment of the insured sum for 5 years period when there is no claim in these years.
1. Recharge or Restore benefit
Restore benefit means the restoration of the base sum insured amount once the available balance is exhausted. Some plans offer this once in a policy year and some offer it multiple times. Restore benefit applies to a non-related health condition in case of the same person. This means if one of the family person hospitalizes for any specific health issue and once the sum insured limit is exhausted, the limit gets recharged to its full limit automatically which can be used for a different health issue in the same year for the same person if he gets hospitalized for the second time. This restored limit can be used for different person in the family also. But only in case of same person and same health issue, the benefit doesn’t apply.
2. Pre and post hospitalization cover
Pre and post hospitalization cover is for the expenses incurred in things like doctor consultation, diagnostics, and medical bills before joining the hospital and after discharge from the hospital. Typically this period ranges 30 days pre-hospitalization and 60 days post-hospitalization. This may differ in some plans based on the company.
3. Domiciliary hospitalization cover
Domiciliary hospitalization cover means expenses incurred in medical treatment taken at home due to the non-movability of the patient to the hospital or if there is no accommodation available at the hospital. A declaration from the treating doctor is required for this to get approved and the treatment must extend for a minimum of 3 days duration.
4. Cashless hospitalization facility
This is the facility provided by health insurance companies in which customers need not pay the amount to the hospitals at the time of joining and the entire process of hospitalization. But to get this facility you need to join in the network hospital mentioned on the insurance company website. It is good practice to have an idea about list of covered network hospitals of the health insurance company that you purchased health insurance. So that even if there is an emergency in the future you can rush to that hospital that is near to you and get the cashless benefit.
5. Hospital Daily Cash Benefit
Some health insurance plans offer daily cash benefits for miscellaneous expenses. This may range from 500 rupees to 2000 rupees for example. However, this amount is not the same in every health plan and varies from company to company.
6. OPD coverage
Some plans also cover OPD expenses, but not all plans cover this feature. Look for this facility if you wish to avail of such benefits. In some plans, treatments like dental treatment and pregnancy also count under OPD treatment. Read the policy brochure carefully for such terms to understand the policy before purchasing.
7. Day Care treatment coverage
Daycare treatment is the medical treatment taken with a hospital stay not exceeding 24 hours. Due to technological advancement in the medical field, some treatments may not require you to stay in the hospital for more than 24 hours. Cataract, Nasal sinus surgery, Cancer chemotherapy, Coronary angiography, and Hemodialysis are examples of such day care treatment procedures. Health insurance companies mention the list of treatments covered under this option in their policy documents. Check this while purchasing the policy.
8. Critical illness coverage
Very few companies offer coverage for critical illness included as an add-on benefit over the base plan. However, the premium amount will increase if such additional cover is opted. If you wish to purchase coverage for critical illness, then there are plans in the market specifically designed for such health problems.
9. Personal accident coverage
This is also an add-on benefit that only a few companies offer. Such plans offer a lump sum benefit in case of death or permanent disablement of the insured person. There are insurance plans in the market specific to personal accident cover which can be considered to purchase if you are concerned about tough times if the breadwinner of the family or any other person meets an accident that would affect the financial wellbeing of the family.
What are the Best Family Health Insurance Plans in India in 2020?
Based on the overall market research and features of the policies we listed some top plans in the market that can be considered for the family floater option. This list is for illustrative purposes only. One plan that suits one family may not be suitable for other. It is advised to read and understand all the terms and wordings mentioned in the policy brochure before making a final decision.
- Universal Sompo – Complete HealthCare Insurance Family Floater Essential
- Oriental – Happy Family floater – Silver
- HDFC ERGO Optima Restore Floater Plan
- Aditya Birla Capital (Platinum – Enhanced, Activ Assure – Diamond)
- Care Health Insurance (Earlier known as Religare Health Insurance) – (Care, Care NCB Super, Care – NCB Super and Unlimited Recharge)
- Star Health Comprehensive
Claim Settlement Ratio
The claim settlement ratio is one thing that can be considered to conclude if a health insurance company is performing well or not. IRDAI releases the annual report every year. The claim settlement ratio is calculated based on the amount of business generated by the insurer versus the number of claims settled by the insurer in that financial year.
Can I cover my parents too in a family health insurance plan?
Yes, parents can also be covered in a family floater plan. But the thing is the annual premium will shoot up as the age of the parents is high since the risk factor is high. Moreover, it is advised to take separate plans for parents or family persons with any health issues.
A pre-medical check-up is a procedure of conducting screening tests for the insured persons by the insurance company at their authorized hospitals or diagnostic centers before issuing the policy. These days most of the health insurance companies are issuing health insurance without the need for any pre-medical checkups if the age of the insured person is below 45 years or if the insured person doesn’t have any pre-existing health conditions at the time of purchasing the policy. But if any person in the family has any health issues at the time of purchasing the policy, they may have to undergo the pre-medical checkups at the suggested diagnostic centers by the insurance company or the company may ask for the proofs about the mentioned conditions in the proposal form.
The proposal form is nothing but the application form you fill out to purchase a health insurance plan that is designed by the health insurance company as per the norms of IRDAI to capture the details regarding the risk that is being covered. In the case of health insurance, the risk is the occurrence of any accident or health issue due to which hospitalization is required and the medical expenses incurred in that are covered.
A tax benefit up to Rs 25,000 for people below 60 years and Rs 30,000 for senior citizens under section 80D can be availed towards the amount that you spend to pay premiums for the health insurance policy.
What are the payment options?
Payment can be done through cash if you are paying offline, which should not exceed 1 lakh. If you are purchasing the policy online, there will be multiple options to pay the premium like debit card, credit card, net banking, UPI Pay, etc.
Earlier the health insurance policy premiums were allowed to pay in full amount only. EMI option was not allowed earlier. But with recent coronavirus pandemic effect, keeping the common man in mind, job losses, pay cuts, etc. the IRDAI has ordered all the health insurance providers to implement an EMI option for paying the premiums of health insurance policies.
But one thing that has to be known is if there is a claim in the middle of the policy year while you are paying the premium in EMI. You may have to pay the remaining EMIs pending in that year to avail the claim settlement.
What is the claim process?
A medical claim is categorized into two different types called Cashless claim and Reimbursement claim.
This is the most preferable mode of claim process that a policyholder should choose. As mentioned earlier in this article the cashless benefit works only in the preferred network of hospitals enlisted in the insurer’s website.
If it is a planned hospitalization, you have to inform the insurance company in advance at least 48 hours before about the type of treatment you are going to get and the hospital you are planning to visit to get approval.
If it is an emergency hospitalization, you caninformthe health insurance company within 24 hours after admitting to the hospital by calling the customer care number of the insurer. Contact details will be there in the policy document, and the Health Insurance ID card issuedby the insurer.
Once you visit the network hospital, all you need to do is provide the details about your health insurance and any supporting documents if needed. There will be a TPA department in the hospital to coordinate with the health insurance company. The insurance company through its TPA will arrange direct payment to the hospital.
This is the second option where you have to pay the bills at the time of hospitalization and claim for reimbursement later. This type of claim applies if you get the treatment in a non-network hospital. That’s why it is important to choose a hospital that comes under the network hospital list of the insurer. You can get this information either on the insurance website or by calling the customer care numbers. As a precaution, you can research on the network of hospitals available in your area or the list of top hospitals in your city or nearby city if you live in a rural area. That helps if you have a situation in the future that needs an emergency hospitalization.
Are there chances of claim rejection – How to claim successfully?
Yes, rarely in some cases there may be claim rejection. But claim gets rejected only if there are any errors in details mentioned in the claim form like insured person name, ID proofs, wrongly mentioned health insurance ID details, miss-match in bills mentioned in the claim form, and attached bills. Or if anything mentioned in the proposal form proves to be wrong or miss leading, in such cases also there will be a chance of claim rejection. That is why it is important, to be honest, and mention transparently about any existing illness or any previous surgeries details about the insured members. If a pre-medical checkup is required, do attend that. The principle of at most good faith plays a key role in a successful claim.
Keep these points in mind for a hassle-free and successful claim settlement.
- Read the policy brochure fully to know about the policy that you are buying. Only then you will be able to understand what is covered and what is not covered under your policy.
- Be honest at the time of filling the proposal form (application form) while buying a health insurance policy.
- At the time of buying the policy, mention about any pre-existing conditions or any surgeries etc. in the specified fields of the form if anyone in your family had in the past.
- Mention transparently about any habits like smoking and drinking if anyone in your family had that.
- The insurance company may request for the supporting documents for the pre-existing health issues or surgeries that you have mentioned in the proposal form. Keep them handy at the time of hospitalization also.
- Provide all the documents requested by the insured for KYC verification.
- At the time of hospitalization, prefer to choose a network hospital listed with the insurer. The claim process becomes hassle-free once you choose a network hospital. The insurer will settle the bills directly to the hospital through its TPA. Moreover, in this option, you can avail of the cashless benefit, which means you don’t have to spend money out of your pocket.
- In case of reimbursement, collect all the bills from the hospital at the time of discharge and attach all those in original along with the duly filled reimbursement form. You can download the reimbursement claim form from the insurer website.
- As per IRDA norms, the insurer should settle the claim within 30 days after the final document is received by the insurer.
- Ensure to submit all the supporting documents, original bills of hospitalization, medical bills, and consultation bills for successful claim settlement. You can contact the customer care if you have any doubts about filling the claim form to avoid errors.
What if I am not satisfied with the service provided by the Health Insurance Company?
What if there is a claim rejection even after taking all precautions? Let’s see the options available in case of claim rejection.
The primary point of contact is the customer service of the insurer or the TPA. If there are any correctable mistakes done in the claim form, or if any bills or proof documents are missing, you can attach those and re-submit the claim form.
There will be an option to approach the grievance department in the insurance company that you have purchased the health insurance from.
Most of the issues would be resolved at the customer service of the insurer only. But if there is no resolution at the insurer’s customer service point, the insured person can approach Insurance Ombudsman for resolution. The insurance Ombudsman was created by the Government of India for the benefit of individual policyholders for the settlement of their complaints out of the court.
Next stage after the Insurance Ombudsman is IRDA Grievance Call Center Toll-Free Number: 155255, Email ID: firstname.lastname@example.org. Customers can place a complaint on IRDAI’s Integrated Grievance Management System (IGMS) online portal.
Who can help me to know more details?
If you are not able to understand the terms and conditions mentioned in the policy brochure and still have any doubts, you can contact us through the below form.
Hari Krishna is an experienced and IRDA certified POS insurance advisor with a keen interest in writing informative and research-backed content related to insurance and health-related topics. He has previously worked in business development and marketing roles with several healthcare organizations. Hari has developed a deep understanding of the challenges faced in India’s healthcare, particularly due to lack of resources or adequate health coverage.