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Green, Orange, Red: Colours That Define If A Health Insurance Plan Is Simple Or Complex

Health insurance is one of the most important things that everyone should get. We live in the world of uncertainties where we don't know what the future holds for us. What we all can do is prepare for the worst scenarios. A medical emergency can arise anytime anywhere, and one needs to be prepared for it, both financially and mentally. Well, loved ones help in preparing mentally but no one helps in solving financial problems that arise with medical urgencies. The cost of treatment has rapidly increased, especially in a developing country like India. India has indeed advanced in medical technology, but it is also true that the cost of treatment has also increased. This is the reason why buying a health plan from a reputable insurer is the best thing that you can do.

Health insurance will take care of the expenses related to hospitalization. One can get cashless treatment at several network hospitals. Not only health plan helps in securing the hard-earned savings of the policyholder, but it also helps in saving tax under Section 80 D of the Income Tax Act, 1961. The premium paid towards the health plan is exempt from tax under this section. 

A health plan comes with several benefits, but the vast majority of Indians don't purchase health insurance. Some of them don't have proper knowledge about it and some of them have misconceptions. But the majority of the Indians understood how important health plan because of the COVID-19 pandemic is. The world was taken by storm by this pandemic at the beginning of the year 2020, and we are at the end of the year, and this pandemic is far from over. People of India realized that how important is the health plan as no one expected this pandemic. This unfortunate event has opened the eyes of people and the government is also helping them. 

To make health plans more customer-friendly and less complex, the government of India has asked several insurance companies to carry a colour code. These colours will reflect the level of complexity of a health plan. This idea was first practiced on mutual funds, but it was later changed with labels showing high risk or low risk. IRDAI or Insurance Regulatory and Development Authority of India says that every health insurance product will be given a set of scores based on its terms and conditions. This score will determine how simple or how complex the plan is. There will be various factors that IRDAI will take into account while deciding the complexity or simplicity of the product. Given below are the colour that will be allotted to the particular score. 

  • Health plans with a score of 2 or less – Green
  • Health plans with a score of less than 4 – Orange
  • Health plans with a score of more than 4 - Red
  • This process of giving colour to the health insurance product will help enormously, especially to a community that has no information about medical insurance. This step will surely attract people and they will then know about corona rakshak policy and more. People can then buy corona kavach policy and can secure themselves financially in this pandemic.