New Delhi: The coronavirus pandemic which has infected over 3.43 lakh people and killed 9900 in India alone has got many worried about the healthcare and costs associated with it. It is no secret that the cost of quality healthcare in India is prohibitive and therefore a health insurance plan is a must for every family or individual.
Here’s a ready reckoner of what factors to consider while buying one:
Why Buy Health Insurance?
‘Health Insurance’ pertains to a type of financial insurance instrument that essentially covers medical expenses. A health insurance policy is a contract between an insurer and an individual or group in which the insurer agrees to provide specified health insurance cover at a particular “premium” subject to terms and conditions specified in the policy.
What are the forms of Health Insurance available?
The most common form of health insurance plans in India covers the expenses incurred on Hospitalization, though a variety of products are now available which offer a range of health covers, depending on the need and choice of the insured. However, some insurers such as ICICI Lombard, cover home treatment as well.
A health insurance company either makes a direct payment to the hospital (cashless facility) or
or reimburses the expenses incurred by the buyer on treatment associated with illness or disburses a fixed benefit when an illness occurs.
Types of health insurance plans
Health insurers provide plans with sum insured ranging from Rs 5000 (in micro-insurance policies) to up to Rs 50 lakhs or more in certain critical illness plans. However, most policies provide between 1 lakh to 5 lakh sum insured.
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 too.
A Hospitalization policy covers, fully or partly, the actual cost of the treatment for hospital admissions during the policy period. This is a wider form of coverage applicable for various hospitalization expenses, including expenses before and after hospitalization for some specified period. Such policies may be available on individual sum insured basis, or on a family floater basis where the sum insured is shared across the family members.
Hospital Daily Cash Benefit policy, provides a fixed daily sum insured for each day of hospitalization. There may also be coverage for a higher daily benefit in case of ICU admissions or for specified illnesses or injuries.
A Critical Illness benefit policy provides a fixed lumpsum amount to the insured in case of diagnosis of a specified illness or on undergoing a specified procedure. This amount is helpful in mitigating various direct and indirect financial consequences of a critical illness. Usually, once this lump sum is paid, the plan ceases to remain in force. 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.
Which factors affect Health Insurance premium?
Age is a major factor that determines the premium, the older you are the premium cost will be higher because you are more prone to illnesses. Previous medical history is another major factor that determines the premium. If no prior medical history exists, premium will automatically be lower. Claim free years can also be a factor in determining the cost of the premium as it might benefit you with certain percentage of discount. This will automatically help you reduce your premium.
What is not covered under Health Insurance policy?
It is extremely important to read the policy documents carefully to understand what is not covered under it. Generally, pre-existing diseases are excluded. Many policies do not cover certain diseases from the first year of coverage and impose a waiting period for these to be eligible for cover. Other standard exclusions include cost of spectacles, contact lenses and hearing aids, dental treatment or surgery (unless requiring hospitalization), convalescence, general debility, congenital external defects, venereal disease, intentional self-injury, use of intoxicating drugs or alcohol, AIDS, expenses for diagnosis, x-ray or laboratory tests not consistent with the disease requiring hospitalization, treatment relating to pregnancy or childbirth including cesarean section, Naturopathy treatment.