Explore different types of health insurance plans in India: Choose the one that best fits your needs
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Health insurance acts as an excellent financial shield to protect your loved ones during medical emergencies and hospitalisation. There are multiple choices in the market, but you need to choose the type of plan that works for you. For that, you must first understand the different types of health insurance plans in India. This article provides deep insights into various types of medical insurance policies so that you can make an informed choice.
Refer to the following table for the popular types of health insurance in India.
Types of health insurance policies
Individual Health Insurance Plan
Family Floater Health Insurance Plan
Family, including spouse, children, and parents
Senior Citizen Health Insurance Plan
People above 65 years of age
Critical Illness Insurance Plan
Financial protection against expensive treatment for critical illness
Group Health Insurance Plan
Group of people, such as a company’s employees
Top-up Health Insurance Plan
Those looking for additional medical coverage up to a certain amount
Personal Accident Cover
Those looking to insure partial/total disability and death due to an accident
Maternity Health Insurance Plan
Covering expenses incurred in the prenatal stage, delivery and post-natal stage
Mediclaim Insurance Plan
Disease-specific (Corona Kavach, etc.)
Those seeking coverage for a specific health condition.
Hospital Daily Cash
Daily cash to manage expenses as long as the insured is hospitalised
Unit Linked Insurance Plan
Insurance and investment benefits both together.
Let us understand each of these plans in detail. Please note that the examples shared below are for explanation purposes only and the details can vary on a case-to-case basis. Also, details related to the plans are subject to changes and dependent on the insurer’s underwriting clauses.
The Individual Health Insurance Policy offers coverage on an individual basis. Under this type of health insurance plan, you are entitled to receive the incurred hospitalisation expenses. You can claim up to the sum insured.
For example, if you buy an Individual Health Insurance Policy with a sum insured amount of Rs. 5 lakhs, you can claim up to Rs. 5 lakhs.
Features of the Individual Health Insurance Policy
It covers a single person.
Individual sum insured amount for each beneficiary.
It offers coverage for hospitalisation expenses incurred due to injury/illness, surgeries, daycare treatment, room rent, etc.
People in the age group between 18 and 65 years are eligible for this plan.
The Family Floater Health Plan is for the entire family. Under this type of health insurance policy, your family is covered in a single policy. The sum insured is equally shared by the beneficiaries of the plan. The premium is comparatively lower compared to the Individual Health Insurance Policy (considering each family member buys one).
For example, consider you have purchased a Family Floater Health Insurance. It covers your two children, your spouse, and yourself with a sum insured of Rs. 20 lakhs. If you are hospitalised for a covered surgery costing Rs. 10 lakhs, the policy shall cover the cost as per the terms and conditions. The remaining Rs. 10 lakhs is available for future medical emergencies or planned hospitalisation for you or the covered family members.
Features of a Family Floater Health Insurance Policy
The entire family is covered under a single health insurance plan.
The sum insured is shared by the beneficiaries.
It offers financial coverage against hospitalisation, surgeries, treatment, daycare, etc.
The Senior Citizen Health Insurance Policy provides coverage for those above 65 years of age. If you want to buy a health insurance plan for your parents or other senior citizens, you should opt for this plan. Typically, the Senior Citizen Health Plan’s premium is slightly higher than the above two types of health insurance plans.
For example, suppose your parents are more than 65 years of age and do not hold a health insurance plan. In that case, you can consider opting for this plan.
Features of Senior Citizen Health Insurance Plan
It is appropriate for senior citizens above 65 years of age.
It offers coverage for pre and post-hospitalisation expenses incurred due to illness/accident, medical treatment, psychiatric treatment and domiciliary expenses.
The premium may be higher compared to Individual or Family Floater Health Insurance Plans, as elders tend to be more likely to face medical issues.
The Critical Illness plan is designed to provide financial protection if you are diagnosed with a critical illness or condition. This type of health insurance policy offers coverage against critical diseases such as heart attacks, kidney failure, paralysis, stroke, cancer, etc. Typically, if you raise a claim against the policy, the insurer pays a one-time lump-sum payment.
For example, if you are diagnosed with cancer that is covered under a Critical Illness Health Insurance Plan of Rs. 15 lakhs, the insurer shall pay Rs. 15 lakhs as a one-time lump-sum payment, and terminate the policy.
Features of Critical Illness Health Insurance Plan
It provides a one-time lump-sum payment (sum insured) if you are detected with a critical illness.
The policy has a lifetime renewability feature.
You should survive at least 30 days after the critical illness diagnosis.
Some plans even offer complimentary annual health checkups.
The policy terminates upon the one-time lump-sum payment of the sum insured.
The Group Health Insurance Plan is designed to cover a group of people. The most common type of group plan is the Group Medical Cover (GMC). Typically, an employer or a company offers the GMC to its employees.
The GMC policy can be for an individual employee, or it may allow you to include your family members in the same policy. You may have to pay an extra premium to include them, but that depends on your employer.
Features of a Group Health Insurance Plan
It offers medical coverage for the employee and, in some cases, even their dependents.
Generally, the basic coverage is free for the employee.
There may be zero waiting period to take advantage of the policy’s benefits.
It provides coverage for hospitalisation caused due to an injury/illness.
It may cover maternity, daycare treatment, and Out-patient Department (OPD).
It may offer a top-up of the sum insured amount.
It may offer value-added services such as annual health check-ups, online doctor consultations, diagnostic tests, etc.
Learn more about the waiting period in health insurance.
The Top-up Health Insurance Plan is ideal if you are looking for coverage that replenishes the sum insured up to a certain amount. The plan gets activated once you have utilised the maximum claim amount.
Features of the Top-up Health Insurance Plan
It offers the option for a higher sum insured amount over and above the basic plan.
Most plans may require you to pay a fixed deductible amount.
You can also opt for the Super Top-up Health Insurance Plan for a higher sum insured amount.
Medical expenses arising from the treatment due to an accident can wreck your finances. Availing the Personal Accident Cover (PA) offers benefits against events such as partial/total disability and death due to an accident.
Features of Personal Accident Insurance Policy
It covers accidental death and permanent/partial disability caused by accident.
It may offer weekly compensation in case of permanent or partial disability.
It offers lump-sum payments in case of death or permanent disability.
You can purchase the Maternity Health Insurance Plan as an add-on along with the basic plan. The add-on is designed to cover expenses incurred during the prenatal, delivery and postnatal stages.
If you are planning to start a family, you should consider buying this plan. It helps mitigate the expenses related to maternity.
Features of the Maternity Health Insurance Plan
It covers expenses arising from pre and post-natal stage and delivery of the baby.
Some insurers may cover maternity after a certain waiting period.
Some plans may cover the newborn baby for a certain period of time.
The Mediclaim Insurance Plan usually covers the cost of hospitalisation related to accidents or illnesses. If you are looking for health insurance to cover only the in-patient expenses, you can consider Mediclaim Insurance.
Features of Mediclaim Insurance Plan
It provides coverage for in-patient medical expenses such as doctor fees, surgery, nursing charges, oxygen, and anaesthesia.
Such a plan is usually available as Group Mediclaim, Individual Medical Insurance, Overseas Medical Insurance, etc.
The medical costs for certain treatments can leave you financially drained. For example, treatment for COVID-19. It is, therefore, wise to opt for a plan that has exclusive medical coverage for the treatment of such diseases. One such plan is the Corona Kavach Health Insurance Plan.
Features of disease-specific health insurance plan
Coverage for consumables such as PPE kits, masks, gloves, etc.
Flexible duration (105/195/285 days).
You can buy it as an Individual Health Insurance Plan or as a Family Floater Health Insurance Plan.
One time premium payment.
No option to renew the plan.
There is no room rent.
It offers daily hospital cash.
It covers pre and post-hospitalisation expenses.
It covers AYUSH treatment.
Hospital daily cash is a type of insurance policy that provides a fixed amount of cash benefit for each day of hospitalization due to an illness or injury. The benefit is paid to the policyholder regardless of the actual medical expenses incurred during the hospital stay. This type of insurance can help offset some of the non-medical expenses associated with a hospital stay, such as transportation, food, and lodging.
Health insurance is broadly classified into indemnity and fixed benefit plans. Let’s understand what these stand for.
The Indemnity Health Insurance Plan covers your medical expenses up to the specified sum insured. For example, if your policy comes with a sum insured of Rs. 10 lakhs, medical expenses only up to Rs. 10 lakhs shall be covered. Most health insurance plans belong to this category.
The Fixed Benefit Health Plan is a health insurance plan that pays a one-time lump-sum payment (sum insured) to cover the cost of a predetermined illness or medical condition. There are different types of fixed benefit health plans, such as Critical Illness Plan, Daily Hospital Cash Policy or Personal Accident Cover.
Here’s why you should consider purchasing health insurance.
Protection against high medical costs: Health insurance can help you cover the costs of medical treatments and procedures, which can be very expensive without insurance coverage. This can help protect you from financial strain due to unexpected medical expenses.
Access to preventative care: Many health insurance plans offer coverage for preventative care services, such as routine check-ups, screenings, and immunizations. These services can help you stay healthy and catch any health issues early, which can improve your overall well-being and quality of life.
Network of healthcare providers: Many health insurance plans have a network of healthcare providers that you can access for medical care. This can be beneficial because you can often receive care at a discounted rate within the network.
Peace of mind: Having health insurance can provide peace of mind, knowing that you have coverage for unexpected medical events. This can help reduce stress and anxiety, and allow you to focus on other areas of your life.
Here are some tips to consider while purchasing a health insurance plan.
Deductibles: Ensure you check the amount of deductible stated in the policy before you purchase the health insurance plan. A deductible is an amount you must contribute during the settlement of the claim while the insurer pays the rest.
Sum insured: Check if the coverage amount is enough for you and the policy's beneficiaries to avoid shocks during claim settlement.
Waiting period: There are waiting periods for coverage of certain pre-existing diseases. Opt for health insurance policies with zero waiting period or no waiting period, such as the 1 crore health insurance plan offered by ACKO.
Medical history of family members: Consider the medical history of the policy’s beneficiaries when purchasing the health insurance plan. If any beneficiaries have a medical history, then the premium can rise.
Age of the beneficiaries: You must understand the importance of the age factor while purchasing a health insurance plan. There are different types of health insurance coverage that depend upon the buyer's age. The premium, waiting period and renewability rely on the age factors of the beneficiaries.
Exclusions: One of the most important factors to consider while buying a health insurance plan is to check the exclusions or what is not covered. By learning about the exclusions, you can opt for a plan that suits your needs.
Claim Settlement Process: Ensure you go through the claim settlement process of the insurer. The more straightforward the process, the easier and the faster the claim settlement process.
Annual health checkups and value-added services: Opt for health insurance plans that offer yearly health checkups. Also, consider a plan that provides value-added services such as online doctor consultations, lab tests, discounts on medicines, etc.
Maternity cover: Not all health insurance plans cover maternity. Read the benefits and features of the plan before you purchase it. If you are planning to start a family, it is better to choose a plan that includes coverage for maternity or if you can include the cover as an add-on.
Lifetime renewability: Check the renewability options since different health insurance plans have various renewability features.
Network hospitals: The more extensive the network of hospitals, the easier the access to medical care. Ensure you opt for an insurance company that has a vast network of hospitals to choose from.
Now that you understand the different types of health insurance plans, you can easily choose the right health insurance plan for you and your family. Here are some key takeaways.
If you don't have dependents you can opt for the Individual Health Insurance Plan.
You can opt for the Family Floater Health Insurance Plan if you have dependents.
Opt for the Senior Citizen Health Insurance Plan for your elderly parents.
Additionally, you can choose to include the Critical Illness Plan along with the basic plan since medical costs are on the rise, especially for critical illnesses.
The cost of healthcare is skyrocketing with each passing day. A severe injury or illness can dent your savings. Health insurance acts as an excellent financial shield against medical expenses. Here are some of the reasons why health insurance is essential for you.
It offers financial protection during medical emergencies.
It helps you in tax deductions under Section 80D of the Income Tax Act.
It deals with medical inflation without burdening you financially.
It acts as an investment and also helps you save money during emergencies.
It provides coverage for alternative treatments such as Homoeopathy, Ayurveda, etc.
ULIP is an insurance product that is a combination of both financial investment and insurance under a single plan. A part of the premium you pay offers life insurance cover, and the rest of the premium is invested for higher returns. Hence, ULIP is not categorised under the types of health insurance.
The Hospital Daily Cash cover is an add-on to the health insurance plan. Hence, it cannot be categorised as a health insurance plan. You can include it as an add-on to your primary health insurance plan.