Introduction

Imagine one day you are going to the office to your regular day job. On the way, while you are driving your car, another vehicle comes from the opposite side and hits your car.

I know this is the last thing you would want to imagine happening to you. But the reality is that this can happen to anyone.

Now you suffer from some injuries and need to spend some days in the hospital to get the treatment. Ofcourse, you and your family would want you to get the best treatment possible. But that comes at a huge cost, right?

At this point, what can possibly save you and your family from bearing the huge burden of cost of your treatment? Your health insurance policy! Yes, you heard it right!

Your health insurance policy pays for medical expenses in case you need treatment in a hospital. It also pays for medical expenses which you incur before and after hospitalization.

This saves you and your family from the burden of arranging money at that moment. Your family takes care of you and your health insurance takes care of your medical bills.

Family Floater

Do you know that you can provide health insurance cover to yourself and all your family members in just one plan? That’s right. These policies are called family floaters. These plans are good because you get a discount for including all family members in one policy. And they are also easy to manage and renew year on year.

You can include yourself, your spouse, and children in just one policy. Some plans available in the market even allow you to include your parents and parents-in-law in the same policy.

Cover Amount

How much health insurance cover do you need? In case you or any of your family members is hospitalised, what would be a good amount to have as cover so that you don’t have to pay anything from your pocket?

Health insurance plans typically pay claims on indemnity basis. This means that your policy will settle your actual bill in case of hospitalisation and not pay you anything extra.

But is there any maximum limit to this? The answer is Yes. This maximum limit is your Sum Insured under your policy. This is your Cover Amount.

Let’s assume that you have taken a health insurance policy for yourself with a Sum Insured of Rs. 5 Lakh. Now your hospital bill in case of hospitalisation comes to Rs. 3 Lakh (say). In such a case, your health insurance company will pay the entire amount of Rs. 3 Lakh.

Had your hospital bill been to the tune of Rs. 6 Lakh, how much do you think your health insurance policy would have paid? You guessed it right. Here the insurance company will only pay Rs. 5 Lakh which is the sum insured under your policy. You will have to pay the remaining Rs. 1 lakh from your own pocket.

Pre and Post Hospitalisation Expenses

Pre and post hospitalisation expenses are these days a considerable part of any treatment you take in a hospital. These are treatment related expenses which you incur before and after the exact period of your hospitalisation.

What kind of expenses are these?
Are they expenses covered by your insurance company?

Here’s a simplified explanation;

Pre-Hospitalisation Expenses: When you visit a hospital due to a health concern, your doctor might recommend you to go through a series of diagnostic tests to help him diagnose your condition and suggest you a possible treatment. These tests can be costly.

For example, if you suffer from chest pain, your physician might advise you to undergo an MRI scan and a few blood tests for precise diagnosis. And if the disease diagnosed requires hospitalisation and further treatment, these costs which you incur before your admission into the hospital are your pre-hospitalisation expenses.

Post-Hospitalisation Expenses: Post your treatment at the hospital, your would be required to take medications for some time and have follow-up consultations with your doctor. During these visits to your doctors, you might be asked to take some more diagnostic tests to check on your condition and improvement post treatment. Such expenses arising after your hospital stay are post-hospitalisation expenses.

For example, let’s say you underwent surgery for an injury. After your discharge from the hospital, your surgeon recommended several weeks of physiotherapy. The costs associated with these sessions would be covered by the post-hospitalisation coverage in your insurance policy.

Most health insurance plans these days cover pre and post hospitalisation expenses up to 60 and 180 days respectively. This coverage ensures you are financially protected even beyond your hospital stay for all your treatment related expenses.

It is always recommended that you buy a health insurance policy that covers both pre-hospitalisation and post-hospitalisation expenses up to sum insured to get a more comprehensive coverage.

Day Care Procedures

Gone are the days when every surgery used to take a few days of a patient’s time in the hospital. With advancement in medical science, many surgical procedures such as cataract removal, knee replacement, appendectomy require only a few hours of hospitalisation. You are required to go to the hospital in the morning and you are discharged by the evening. Such procedures are called day care procedures.

Most popular health insurance plans in the market nowadays cover day care procedures which require hospital stay which is as short as just 2 hours. But some plans come with a list of day care procedures which are covered. Any day care treatment outside this list would not be covered under the plan.

You should buy a plan which at least covers a comprehensive list of day care procedures or covers all day care procedures without any list.

Domiciliary Hospitalisation

Consider a scenario where you arrive at a network hospital, and the staff informs you that no beds are available due to rush in the hospital. If you need treatment on an urgent basis, your doctor might suggest you get hospitalised at your home. This is called domiciliary hospitalisation.

Health insurers are now covering domiciliary hospitalisation but there are caveats attached. Domiciliary hospitalisation is covered only if it happens when there is no availability of beds in the hospital or patient is not in the condition to be moved to hospital. It has to happen only if the treating doctors suggest domiciliary hospitalisation.

You you opt for domiciliary hospitalisation out of your own will for your own comfort, your insurance company will not cover your treatment.

Alternative Treatments

Some plans also cover alternative treatments which come under AYUSH. These treatments include Ayurveda, Yoga, Unani, Siddha and Homeopathy.

But you should remember that such treatments are covered only if you are hospitalised while taking your treatment in a recognised hospital. Most health insurance plans provide coverage for such treatments up to sum insured. If you believe in these alternative treatments and think that you might take such a treatment in future depending on your health condition or ailment, check out if your health insurance policy covers them.

Restoration Benefit

Suppose you have a health insurance plan with a sum insured of Rs. 5 Lakh. You fall severely sick and get hospitalised. You need a prolonged treatment and your sum insured of Rs. 5 Lakh is exhausted.

In such a case, your health insurance company adds another Rs. 5 Lakh, which was your initial sum insured, to your policy. You can utilize this money for your treatment. This is called restoration of refill benefit.

Many health insurance plans come with one time restoration benefit within a policy year. But some plans these days provide unlimited restoration benefits.

But keep in mind that many times, this restoration benefit is not given to the same person for the same illness in a policy. And many times such restoration benefits are given only from the second hospitalisation onwards. It is good to go through the policy conditions to not have any wrong expectations from your health insurance plan.

No Claim Bonus

Suppose you buy a health insurance plan for yourself. You keep it running for a year but do not raise any claim. Your insurance company rewards you for this by increasing your cover amount in the next year in the form of no claim bonus. But the premium which you pay in the next year is only for the initial sum insured.

You do not raise a claim in the next year as well. You get an increase in the cover amount again. And the premium which you pay this year as well is only for the initial sum insured.

Most health insurance policies these days provide you an increase in cover up to 50% or 100% of the initial sum insured. This is given as a reward for not making a claim and staying with the same health insurer over the years.

If you make a claim in a year, your cover might go down by a notch.

This no claim bonus can also help you fight medical inflation over the years without paying anything extra to your health insurer. So the more no claim bonus your policy gives, the better it is for you. Check out this feature before you decide to buy a plan for yourself.

Network Hospitals and Cashless facility

You have a health insurance plan and you get into this difficult situation where you suddenly fall sick. You go to a hospital and your doctor advises you to get admitted immediately for the treatment. Now is the time when you need to use your health insurance plan.

How do you do that? We will tell you.

It’s very easy. If you go to a hospital which falls under the network hospitals with which your insurance company works, you can avail a cashless treatment. All you have to do is go to the insurance desk of the hospital and provide your policy details and proof of identity.

The hospital’s insurance desk will check your details and verify the same with your insurance company. If everything is ok, your cashless claim is triggered. All your need to do is fill up a claim form and your hospital will assist you in doing that. And you don’t need to pay anything to the hospital from your pocket. Your health insurer will directly settle your hospital bill.

In case your hospital is not one of the network hospitals, you will have to first pay the bill yourself and then you can raise the claim and get the amount reimbursed by submitting all relevant bills. Insurance companies usually take 15 to 30 days to settle such bills.

We always recommend you to take your health insurance policy from a company which has a higher number of network hospitals, especially in the city where you reside.

Free health checkups

Health insurance plans these days provide complimentary health checkups every year for all the people covered under the policy. These health checkups are preventive in nature and come with a list of tests which can be taken.

This is a complimentary benefit which health insurance companies offer and do not reduce your cover amount.

Maternity Benefit

Some health insurance plans also offer maternity benefits. Maternity benefits usually come with a waiting period of 2 to 4 years. These benefits can obviously be availed by only women covered under the policy. If you plan to have a baby and the waiting period is over, you can avail maternity benefits.

Maternity benefit is usually offered in the form of a lump sum one time payment on the birth of a baby. The amount of lump sum typically ranges from Rs. 30,000 to Rs. 60,000. This is an additional benefit over and above the cover amount and availing this benefit does not reduce your cover amount for the policy year.

Another benefit is that your newborn baby gets covered under the policy from day one up to sum insured. In case any complications arise and your newborn needs treatment, the cost of this treatment is covered under your basic health insurance policy.

Out-patient Treatment (OPD)

You can also get OPD treatments covered under your health insurance plan. But this comes as an add-on for which you have to pay an extra premium. If you add this to your policy, the premium which you have to pay increases drastically.

You buy a health insurance plan to protect you from unforeseen events which affect you financially. We recommend you not to add this benefit to your health insurance plan. OPD treatments, planned or unplanned, are usually small and can be managed as out of pocket expenses.

Tax Benefit

Buy a health insurance policy and save income tax.

If you buy a health insurance policy for yourself, your spouse and your children, you get exemption under section 80(D) of the Income Tax Act of India for all the premiums you pay up to a maximum of Rs. 25,000 in a financial year.

If you buy a health insurance policy for your elderly parents, you get an additional exemption under section 80(D) of the Income Tax Act for all the premiums you pay for their health cover up to a maximum of Rs. 25,000. If your parents are senior citizens, you get exemption up to a maximum of Rs. 50,000.

So if you buy a policy where you cover yourself, your spouse, your children and your parents, who are senior citizens, you can get a tax exemption of up to Rs. 75,000.

Waiting Periods

All good things come with some shortcomings. So does your health insurance policy. You should know what is not covered under your health insurance plan before making a purchase.

30 day exclusion – Most health insurance plans in India do not provide you coverage for the first 30 days from the date of purchase.

This means that if you are hospitalised and take treatment within 30 days of buying your policy, you will most likely have to pay the hospital bills out of your own pocket. But if this happens in case of an accident, even if this is well within the 30 days limit, your health insurance company will cover your medical bills.

Pre-existing diseases – Many people in India are already suffering from lifestyle illnesses such as hypertension or diabetes. If you are one among them and you buy a new health insurance plan, what would happen?

Most likely, your health insurance plan will not cover any hospitalisation which is caused due to this already existing illness. For most health insurance plans, this exclusion will apply for the first 2 to 4 policy years.

The good thing is if you continue paying the premium year on year for this initial waiting phase, your existing health insurance policy will automatically start covering these after the end of this waiting period. All you have to do is keep your policy running.

But we advise you to opt for a plan which has a shorter waiting period for pre-existing diseases. Or else you might have an option to make this waiting period shorter by buying an add-on and paying some extra premium.

Named illnesses – Certain named illnesses come with a waiting period of 2 years in almost all health insurance plans. These are listed illnesses which are mentioned in your policy document.

These are illnesses which are chronic and hence treatments can be planned well in advance. These include illnesses like hernia, kidney stone or piles. Treatments for these illnesses are covered only when the initial waiting period of 2 years under the policy is over.