Different types of Health Insurance policies exist to cater to the varied needs of individuals. Health Insurance covers medical expenses such as hospital bills, consultation fees, ambulance fees and medication costs. However, the expense of treatments and the likelihood of requiring them are contingent upon factors such as age and overall health. Knowing this, insurance companies have structured Health Insurance plans into categories delineated by coverage, your age, your health, and the option to include family members.
Different types of Health Insurance
1. Individual Health Insurance
This policy only provides coverage for the individual being insured. The insurance company calculates your premium based on your age, health and medical history. Depending on the extent of coverage, it may include medical expenses such as hospitalisation, ambulance fees, OPD charges, treatment costs, and more.
2. Family Floater Health Insurance
This plan extends coverage to both you and your family members, including your spouse, parents and children. With just one premium, you can secure coverage for your entire family. The sum assured is shared among all family members covered by the policy.
For instance, suppose you have a Family Floater Health Insurance plan with a sum assured of ₹10 lakh. Assume your father gets surgery, and you file a claim for ₹5 lakh under this policy. The policy now only allows for a maximum claim of ₹5 lakh (amount remaining after claim) for the entire family, including yourself.
3. Senior Citizen Health Insurance
As the name implies, this policy is meant for individuals aged 60 years and above. The premium for this coverage tends to be relatively high. Senior citizens are more vulnerable to chronic illnesses, making them high-risk customers for an insurance company. Nonetheless, senior citizens are eligible for a higher tax deduction of ₹50,000 under Section 80D of the IT Act.
4. Critical illness insurance
This policy covers severe conditions such as cancer, kidney failure, paralysis and heart attacks. You can either get it as a standalone policy or as an additional feature to your existing plan. Treatment for severe illnesses is costly and requires multiple hospital visits. Your insurance provider furnishes you with a comprehensive list of covered diseases prior to purchasing the policy. This policy not only covers the medical costs related to specified illnesses but also compensates for any loss of income resulting from these conditions.
It is important to note that critical illness insurance policies may have certain exclusions and limitations. When purchasing critical illness insurance, it is crucial to read the policy documents thoroughly to understand what is and isn't covered
5. Group Health Insurance
Group Health Insurance policies are for employers who wish to provide insurance coverage to their employees. If your company has purchased this policy, you may be eligible for it. You may also be allowed to add family members to the coverage for a separate charge. Your employer decides the extent of your coverage, but it is usually limited. Group health plans generally have a smaller sum assured as well.
Once you have understood the different types of health plans, you can make a well-informed decision by carefully assessing your requirements.
Why is Health Insurance important?
- Financial assistance
Medical emergencies can wipe out your savings if you do not have insurance. Medical treatments are quite expensive, and insurance claims can reduce that financial burden.
- Tax benefits
Under Section 80D of the Income Tax Act, you can claim a deduction of up to ₹25,000 for your Health Insurance premium. For senior citizens, this limit is ₹50,000. If you pay Health Insurance premiums for parents over 60 years of age, you can deduct up to ₹50,000 for their premiums, in addition to your own.
- Annual health checkups
Preventive health checks can help detect medical issues earlier. Most types of insurance plans cover annual health checkups, which may motivate you to schedule your checkups regularly.
- Deal with medical inflation
India has one of the highest medical inflation rates, at 14%. If this rate continues, paying for medical procedures out of pocket will become increasingly difficult. However, Health Insurance can help shield you against medical inflation.
- Covers complex procedures
Complex medical procedures can be expensive. Health Insurance can help reduce the financial burden.
- Benefits for organ donors
Some Health Insurance policies cover the medical costs of organ donors. For example, Aditya Birla Health Insurance's Activ Health Platinum Enhanced Plan, in association with Axis Bank, covers the expenses of organ donors. However, the cost is only covered if the organ recipient has insurance. This plan provides unique benefits like Health Returns for staying fit, additional sum insured, a Chronic Management Program for lifestyle diseases, and the coverage of consultations from a Wellness Coach.
- Coverage for alternative treatments
Some Health Insurance policies provide coverage for alternative medical treatments like Yoga, Homoeopathy and Ayurveda.
Things to consider while buying Health Insurance
Here are a few essential points to consider when selecting from different types of Health Insurance plans:
- Age: Age significantly influences your Health Insurance premiums, coverage and eligibility. In the case of a Family Floater Policy, the age of the eldest member of the family is used to calculate the premium. Some insurance contracts include minimum and maximum age limits. Your premium will increase as you get older.
- Medical history of family members: If your family members have a history of health conditions such as heart disease or cancer, the insurer will classify them as high-risk. The premium for your Family Floater insurance plan will be higher.
- Deductibles: A policy's deductibles are subtracted from the claim amount when the insurance company pays you. Read them carefully before buying Health Insurance.
- Exclusions: Events your insurance policy does not cover are called 'exclusions'. Read the exclusions carefully and decide whether you want to take separate coverage for them.
- Sum assured / insured: The sum assured is the amount that you will receive under the insurance policy when you file a claim. Make sure that the sum assured aligns with your expected medical expenditures.
- Waiting period: You can only get the benefits of your insurance policy once the waiting period is over. Check the waiting period for your policy, as it can vary from case to case.
- Lifetime renewability: You can keep renewing the same insurance policy every year. However, make sure you check the renewability options, as they can be different for each policy.
- Network hospitals: Check the list of insurance company network hospitals before buying the policy. Make sure that your policy covers a wide range of hospitals.
- Claim settlement ratio: The claim settlement ratio shows the percentage of claims that an insurance company has paid compared to the total claims received. Choose a company that has a high claim settlement ratio.
Also Read: What is the difference between Mediclaim & Health Insurance?
Navigating the myriad of Health Insurance choices and carefully considering features, benefits, and drawbacks ensures not only financial protection but also tailored support for your family's well-being.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
Disclaimer: Purchase of insurance product by Bank’s customer is purely voluntary and not linked to any other facility from the bank.
