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Advantages of Having a Health Insurance

The increasing prevalence of lifestyle diseases such as diabetes, hypertension, stroke and heart attack among the young as well as the elderly people in India is becoming a major cause of concern. Having no family history of these conditions does not ensure protection from related complications. In today's fast-paced life, you must be prepared for a medical contingency at all times. This is where a robust health insurance policy can help. One of the major health insurance benefits, in the face of a medical emergency, is that it allows you to take your mind off the stress related to healthcare costs and focus on the treatment instead.

 

Introduction

Remember, a medical emergency can occur anytime, irrespective of your present good health or disciplined lifestyle. Therefore, it is important to have forethought and protect your family and self from any unexpected medical situation. Be prepared and stay financially protected to deal with health-related risks in advance. This is even more important if you have dependent elderly parents at home as they are more vulnerable to infections or other diseases. If there is a requirement for hospitalisation or surgery, the expenses can rise to excessive levels and drain your savings suddenly. In addition, the situation and the treatment costs together can put you under a lot of stress.

However, if you or one of your family members is diagnosed with a chronic illness, a health policy will let you be relaxed about healthcare costs and allow you to concentrate on the treatment process instead. Also, the insurers facilitate free annual health check-ups for all policyholders so that you are aware of your health condition and can identify a problem at the early stages itself.  These are just a few of the many advantages of health insurance. Let us look at some more benefits of having an insurance policy.

 

Benefits of individual health insurance

You may buy individual health policies for each family member separately depending on their specific requirements. The major benefits of medical insurance are:

  • Financial coverage

You are financially covered against treatment costs for a wide range of diseases within a specific limit.

  • Cashless claim process

If you get admitted to a network hospital, your insurer will settle the bill directly with the hospital without you having to pay anything.

 

Coverage for medical expenses

You cannot predict when a chronic medical problem may occur to you or your loved ones. If you have a family floater or individual health policies, your insurer would take care of the medical bills while you can concentrate on the treatment process instead. The benefits of having health insurance are:

  • Option of cashless or reimbursement expenses

With cashless treatment facilities, you do not have to pay anything from your pocket if you opt for sufficient cover. Take the patient to any of the network hospitals with which your insurer has a tie-up, and inform the TPA (third party administration) and the insurer at the earliest. The insurer would settle the bill with the hospital directly. Alternately, you can get treated at any hospital or by any healthcare provider of your choice and file for a reimbursement claim by submitting original invoices and required documents to the insurer.

  • Benefits apart from hospitalisation costs

Insurers also provide ambulance services up to a certain amount, coverage for online or e-consultations, expenses for harvesting a major organ from a donor, lifetime renewability options, free preventive health check-ups and more.

  • Alternative treatment

Costs for alternative treatments such as AYUSH (Ayurveda, Unani, Siddha, and Homeopathy) and Naturopathy are covered by some insurers. Other facilities include cashless facilities for daycare treatments, treatment at home under doctor's advice, and pre and post-hospitalisation expenses up to a certain period.

  • Maternity benefits and alternative treatments

Several insurers cover maternity expenses in their health insurance policy plans. This is particularly beneficial for young couples who are planning or expecting a child.

 

Cashless Claim Service

With cashless claim services, you can get treated at some of the best hospitals across India without paying anything out of your pocket. You just have to get admitted at any one of the network hospitals with which your insurer has a tie-up. Once you inform the TPA (third party administrator) and the insurer about getting admitted, they will communicate with the hospital staff and settle the bill directly. To get a cashless claim, your treatment cost should be within the coverage amount.

 

Portability Benefits

Portability of health insurance means you can change your insurance policy from one insurance company to another, or one plan to another without losing the benefits that you have accumulated. This is as per the new rules of the IRDAI (Insurance Regulatory and Development Authority of India). Your new insurer should give you the credit relating to the waiting period for pre-existing conditions that you had received from your previous insurer. Your new insurer has to insure you at least up to the sum insured under the old policy. A required condition is that you must port the policy only during the renewal so that the new insurance period will be with a new insurer.

Tax Benefits

Under Section 80D of the Income Tax Act, the premium that you pay towards health insurance coverage under 80D is exempted from your income tax liability for a particular financial year. This exemption is available on individual plans and family floater plans that cover you, your spouse, children and your parents. Claim a deduction of Rs 25,000 for self, spouse and dependent children. File an additional deduction for insurance of dependent parents up to Rs 25,000, if they are less than 60 years of age. If the parents are aged above 60 years, the deduction amount is Rs 50,000. You can claim a total deduction of Rs 75,000, consisting of Rs 25,000 on the premium paid for self, spouse and dependent children and Rs 50,000 on the premium paid for parents. If both you and your parents are senior citizens, the maximum deduction that you can claim would be Rs 1,00,000 = Rs 50,000+Rs 50,000.

 

Scenario Deduction Limit for Self, Spouse and Children (Rs) Deduction Limit for Dependent Parents (Rs) Deduction under 80D (Rs)
All members below 60 years25,00025,00050,000
Self, Spouse and Children below 60 years with parents (senior citizen)25,00050,00075,000
Policyholder and parents are senior citizens 50,00050,0001,00,000

 

Hospitalisation Daily Allowance

A daily hospital cash benefit or daily allowance provides a lump sum amount every day in case of hospitalisation and you can use it as per your requirement or for compensating the loss of income during the period of hospitalisation. Some expenses called inadmissible expenses include surgical accessories, X-Ray charges, and expenses incurred by accompanying family members may not be covered by your health plan. Daily hospital cash benefit does not require supporting bills. A valid hospitalisation of at least 24 to 48 hours is sufficient to avail of this benefit.

Financial Security against Rising Medical Costs

Staying healthy is extremely important but several factors such as physical inactivity, extreme workload, unhealthy personal habits, and poor diet can have an adverse effect on the health of most people. The outcome could be multiple health challenges and excessive cost of medical treatment. A health insurance plan can be a solution to deal with the rising medical costs. It provides financial security by covering the costs related to treatment, hospitalisation, free health check-up, and pre and post hospitalisation expenses. Also, you can get tax relief on the premium under Section 80D.

 

No Claim Bonus

No Claim Bonus or NCB is the reward given by your insurer for consecutive claim-free years on your health insurance. There are two ways through which insurers provide NCB on their health insurance policies—by offering an increase in the sum assured or by offering a discount on the renewal premium. You can transfer the accumulated NCB on a particular health insurance policy to a new health policy provided by a different insurer.

 

Lifetime Renewability Benefit

Earlier, many insurers did not provide insurance coverage after a particular age. However, now, the IRDAI has made guaranteed renewability compulsory for health insurance policies so, you can get the benefits of the policy throughout your life with a lifetime renewability option. There would be no restriction on age. You can renew the tenure of the plans for a lifetime without any fresh medical declaration at each renewal. You would be eligible to buy a new health policy even at the age of 65 years.

 

How Can You Get an Individual Health Insurance Cover at Less Premium?

With rising prices of necessities, it would become difficult for you to spend a lot on policy premiums. The following tips would help you stay covered at a lesser premium and reduce your expenses on insurance:

  • Purchase health insurance when young

It will be good if you purchase health insurance when you are young as your premium will be much lower compared to what you have to pay when you are older.

  • Buy a policy with low sum insured (SI)

Initially, keep your SI low and gradually increase it over the years. This way, you can have a much more affordable policy.

  • Co-pay and deductibles

Opt for co-pay and voluntary deductibles so that your premium goes down. Co-pay and voluntary deductibles give you the option to pay for part of the expenses when you make a claim.

  • Go for different options

If you have an existing group health cover from your employer, choose the additional policies carefully so that you do not spend a lot unnecessarily on premiums.

  • Buy long-term health policies

The premium for long-term insurance policies is usually lower than the traditional plans with one-year terms. You can buy long-term health insurance plans with 2-3 years tenure as they would lower your premium payment by a substantial amount.

  • Top-up plans

Top-up plans are good for availing of higher coverage without paying a huge amount of premium. Top-up plans help to split your cover and raise higher claims.

  • Family floaters

In some cases, you will find family floater plans to be cheaper than the total premium that you have to pay for different individual plans. So, you can reduce your premium by purchasing a family floater policy.

 

  • Compare plans

Compare and purchase policies online to get attractive offers and discounts on your insurance policy. This way, you can reduce the premium paid towards your health policy to some extent. You will also be able to maximise your benefits.

 

  • Purchase policies for your parents before they turn 60 years

The premium of most health insurance policies increases as the age of the insured person crosses 60 years. So, it would be best if you cover your parents before they become senior citizens.
 

Things to Watch Out For

Consider the following factors while selecting the best health insurance cover for you and your family:

  • Maximum coverage

Look for a plan that provides maximum coverage, daycare and domiciliary treatments. Certain treatments such as cataract surgery require hospitalisation for less than 24 hours. Again, for bone fractures, treatments can be done from home instead of in a hospital.

  • Eligibility

Certain policies may have attractive features related to healthcare, provide extensive coverage and NCB but with a limit on the enrolment age. Check the eligibility criteria for various health insurance plans and select policies with maximum renewal age and lifetime coverage.

  • Waiting period

It is a minimum period between the issuance of policy and availing of the benefits. You may find policies without a waiting period. Others have a waiting period ranging from 30 days to one year or more. Select policies with short waiting periods.

  • Exclusions

A policy, no matter how extensive, would have a limit up to which it can cover. Before purchasing a policy, go through the exclusions carefully to avoid confusion in future. Buy policies with the minimum number of exclusions.

  • ​Premium

Do not go for policies based on low premiums only. Generally, low-priced policies have limited coverage or other limitations. Choose a policy with maximum coverage at an affordable premium.

 

Conclusion

Nowadays, a health policy is a necessity due to the wide range of benefits it offers. However, do not buy a policy in a hurry. Carry out some pre-purchase research. Now, almost all insurance companies have an online presence. Also, there are several quote comparison websites available online. This will help you find and compare policies with a   few clicks of your mouse. Buy a suitable policy after going through the offers, and terms and conditions set by the insurer.​