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Frequently asked questions on Health Insurance - II

What kinds of Health Insurance plans are available?
Health insurance plans are available from a meagre 5000 to 50 lakhs or more  in certain critical illness plans in India. But basically on an average most providers offer health coverage between Rs. 1 lakh to Rs 5 lakh sum insured. It is  recommended to take proper health cover at an early age because it may not be possible to increase the sum insured after a claim occurs.

Most insurance companies offer health insurance policies ​for duration of one year, but there are policies which are issued for more then one year too. There are some plans which extent for longer duration too. 

A Health policy covers pre and post hospitalization expenses also inclusive of the hospitalisation expenses in certain cases. Such policies are available for individual policy holders or family plans where the sum insured is shared across the family members which are insured in the policy. 

There are other products which provide Hospital Daily Cash Benefit policy, which provides a fixed daily sum for every single day of hospitalization and some higher expenses for ICU admissions. 

A Critical Illness plan provides a fixed amount to the insured in case of diagnosis of a specified illness or on undergoing a specified procedure. 


What are the Tax benefits for Health Insurance?
Government is committed to bring more and people under the umbrella of Health insurance. Keeping this thing in mind, there are various benefits provided to the policy holder under section 80D of the Income Tax Act. This section 80D of the Income tax Act is different from section 80C which is applicable to Life Insurance wherein other form of investments/expenditure also qualify for the deduction. 

At present, policy holders who have purchased policies via other mode of payment except cash, can avail of an annual deduction of Rs. 15,000 from their taxable income for payment of Health Insurance premium for self, spouse and dependent children. 

Keeping senior citizens in mind, the government has provided the annual deduction of Rs 20,000 for senior citizens. Further, since the financial year 2008-09, an additional Rs 15,000 is available as deduction for health insurance premium paid on behalf of parents, which again is Rs 20,000 if the parents are senior citizens.

What are the factors that affect Health Insurance premium? 
Ans. 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 the policy does not cover?

It is very important to read the policy document before purchasing any type of health insurance policy from an agent of the insurance provider. It helps in understanding what is not covered in the policy which is being bought. Some policies don’t cover pre-existing diseases. 

There are policies which exclude certain diseases from the first year of coverage and impose a waiting period. Hence it is very important to understand the policy which is being bought. 

There can be some other exclusions purchase of spectacles, contact lenses, hearing aids, dental treatment or dental surgery unless hospitalisation is required. There other things which may be excluded may be use of intoxicating drugs/alcohol, AIDS, expenses for diagnosis, x-ray or laboratory tests not consistent with the disease requiring hospitalization, treatment relating to pregnancy or child birth including caesarean section, Naturopathy treatment.