Health insurance basics for a more informed buying – Best health insurance companies and plans in India, USA, UK, Australia, UAE for families and seniors. Commonly used terms, exclusions, portability and policy features explained
Health insurance basics for a more informed buying of plans !
Health insurance plan is an insurance that provides either direct payment or reimbursement for expenses associated with illness, injuries and hospitalization as detailed in the health policy.
The main objective of a health insurance policy is to protect against healthcare risks that one is exposed to.
Health insurance works as a financial protection tool against unforeseen medical expenses. Rising healthcare costs and growing lifestyle diseases have necessitated the need for health insurance plan as a vital financial tool to address healthcare needs.
The cost and range of protection provided by the health insurance policy depends on the health insurance company and the policy type purchased. Some policies also cover pre and post hospitalization expenses.
Important points relating to all health insurance plans
As long as the premiums are paid regularly and the policy is in force, the sum assured in a health insurance policy is guaranteed. However it is not inflation protected, which means that when the health care costs increase, you must buy additional health insurance.
Some of the features of the health plans:
The entry age is generally 18 to 60 years, while the maximum age till cover is offered is normally 75 years.
The premium paid by the policyholder depends on the policy type, sum assured, age and state of health of the person concerned.
There are generally three types of the policy holding
Individual, Group and family covers.
Family floater health insurance plans
These health insurance policies are an extension of the individual plan and they cover a family by spreading the risk across the family members. For example – a Rs 1 million cover is spread across four family members – 2 adults and 2 kids.
Group health insurance policies
These are meant for employees in an organization and come with certain additional benefits that individual plans do not offer like pregnancy cover. It is beneficial for the employee as long as he stays with the company.
Notes
There is no facility of pledging a health insurance policy to obtain loans.
You can exit the policy by surrendering the same during the free look period at no loss.
Premium rates may change on renewal. When it is an annual contract, the scope of the policy cover may also change depending on the insurer.
The health insurance policy can be bought from individual IRDA authorized health insurance agents, banks, insurance brokers or on the internet.
Tax benefits:
Premiums paid towards health insurance in india are tax deductible under section 80 D of the Income tax act . Also the claims made with respect to these plans are also tax free amounts.
Premium paid on the health of parent or parents of the assessee upto Rs 15000 is deductible, whereas for senior citizens the limit of deduction is Rs 20000.
More health insurance basics covered for buying health insurance online
Though buying online is a much happier process, it must be noted that there is need for offline intervention such as verification, signatures, proof of income and health checks, if required.
The best way to start is by checking out the company websites or third party websites that feature policies from several health insurance companies and then comparing different product features and price.
Also sometimes the pricing of policies is available at a discounted price, compared to buying from an agent.
Are the health insurance plans portable?
Yes. All policies are portable, which means that one can move from one insurer to another by transferring their existing policies to a new insurer.
Portability also enables transfer of the credit gained by the policyholder for pre existing conditions and time bound exclusions.
The policy holder has to inform the new insurer about the time regarding the choice of switching.
Also note that the insurer must be informed 45 days before the renewal of the existing policy. If done after 45 days, the insurer may reject the request.
How to buy a good health insurance plan?
Once you have evaluated the amount of insurance you need and the health insurance company offering the policy, you need to fill the proposal form provided by the insurer and also submit
1 Documents to prove the date of birth and identity proof such as PAN card, voters and ID or Aadhar card.
2 Depending on your age and cover sought, you may have to undergo medical tests
How to manage the policy?
A policy certificate is issued with details including your name, premium, policy tenure and terms and conditions.
Premium payments can be made by cash or cheque. You may also choose the ECS method for policy renewals.
The insurer issues the premium receipt confirming the payment made.
Tips on what to look for in a health insurance plan
Network of hospitals covered under the policy.
The policy must have a free look period – 10 days to a month.
Costs and charges on facilities offered to policyholders.
Check to see if there is any provision to make late premium payments with penalties.
In case of any existing ailment, wait for your health condition to improve before buying the policy. Be honest with your medical track record before buying the policy.
Medical checkups are waived for those less than the age of 35 or 40.
Always add more cover with increasing age and resist from taking a very high cover at a younger age.
Common exclusions:
Cooling off period: This is the 30 day period after policy issuance – when claims are not paid, on medical expenses incurred for any treatment. However hospitalization due to accident is covered.
Eye expenses on laser treatment of eyesight, cost of spectacles and contact lenses are also not covered.
Dental expenses incurred on dental treatment or cosmetic surgery done to get a good smile are excluded.
Treatment through non allopathic methods such as ayurveda is also excluded.
War injuries due to wars and invasions are not covered.
Besides, there are provisions that curb the facilities you can avail during hospitalization. Insurers restrict certain discretionary costs associated with hospitalization by introducing sub limits for reimbursement.
Hence it is important to read the fine print before finalizing the health insurance plan that you buy from the health insurer.
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