Types of health insurance

Know about the different types of health insurance policies. Check their features, benefits and coverage details.
Types of health insurance
3 mins

The ever-increasing cost of healthcare services can drain your savings. To save yourself from that burden, health insurance can be a prudent investment. It helps you brace for any health emergencies in life by providing financial security at critical times.

By procuring the best health insurance policy, you can ensure that you or your family gets the best medical treatment without worrying about finances. There are several types of health insurance plans to cater to different health needs of individuals or groups of people. Let us know about the different kinds of health insurance policies in detail.

Types of health insurance policies in India

Here are the different types of health insurance policies available in India.

Individual health insurance

The individual health insurance covers only the individual/insured person under the plan. The person can utilise the entire sum insured for medical expenses specified under the policy.

Family health insurance

In a family health insurance policy, the chosen sum assured applies to all family members covered under a single plan. This means one plan for all members. The sum insured gets divided among all the members insured under the plan.

Group/employee health insurance

Group health insurance policies cover the expenses of the employees or a group of people/members against unforeseen medical emergencies. Group medical insurance comes at a lower premium, as it covers a larger group. Most employers or organisations buy this health insurance plan for the members/employees enrolled under them.

Senior citizens health insurance

Health insurance plans for senior citizens cover individuals above 60 years of age. Senior citizen health insurance caters to all medical-related expenses at that age. You may need to undergo a medical check-up before you buy the plan, as senior citizens usually develop several age-related health conditions. These health insurance policies usually come with higher premiums.

Critical illness health insurance

Critical illness health insurance provides coverage against life-threatening or serious diseases. You can buy this plan as a standalone or as an add-on cover on your basic health insurance policy. The critical illnesses plan covers diseases like cancer, kidney failure, heart attack, stroke, etc. These policies offer a huge amount as compensation to the policyholder for expenses that fall in the ambit of this plan.

Top-up health insurance

Top-up health insurance plan lets you scale up your insurance coverage at an affordable cost. This plan covers expenditures that are over and above the coverage of your regular health insurance policy.

Personal accident insurance

Personal accident insurance secures you and your family financially to tackle medical expenses arising out of an accident. It gives financial aid to take treatment in case of accidental injury or disability. You also get coverage in case of accidental death.

Indemnity health insurance

Indemnity health insurance reimburses the exact amount to the policyholder for the medical expenses incurred. These policies do not offer any additional benefits, such as the waiver of premiums in case of a critical illness.

Defined-benefit plan

Defined-benefit plan policies offer a predefined amount of coverage for specific medical expenses. For instance, the policy will offer a fixed amount of coverage for each day of hospitalisation, irrespective of the actual expenses incurred by the policyholder.

How does health insurance work?

Health insurance plans work on the concept of risk-sharing. When an individual purchases a health insurance policy, they transfer the financial risk of any medical emergency to the insurance company. In exchange, the insurance company offers coverage for the medical expenses incurred by the individual during the policy term. Government, employers, or private insurance companies offer health insurance plans.

Reasons why you need a health insurance policy

Here’s why having a health insurance policy important.

Rising healthcare costs

The cost of medical care is increasing every year. With medical inflation in India growing at 15%, it is essential to have health insurance to secure yourself against these rising healthcare expenses.

Protection against financial uncertainty

Medical emergencies come unannounced and can be financially draining. With a health insurance policy, you can secure yourself from any uncertainties without worrying about the financial burden of paying for medical expenses.

Comprehensive coverage

Health insurance policies cover various medical expenses, such as hospitalisation costs, doctor visits, ambulance services, pre-and post-hospitalisation expenses, and more. Such comprehensive coverage ensures that you receive the best medical care without any financial hindrances.

Tax benefits

Purchasing a health insurance policy also offers tax benefits. The premium paid towards your health insurance policy gets deducted under relevant sections of the Income Tax Act, which reduces your overall tax liability.

Long-term investment

Health insurance policies work as a long-term investment for your health. By paying a nominal premium, you secure yourself and your family against unforeseen medical emergencies for the long term.

Access to quality healthcare

With a health insurance policy, you have access to quality healthcare facilities and services. Most insurance providers offer cashless hospitalisation, where you can avail of medical treatment without paying anything upfront. This ensures that you receive the best medical care without worrying about the financial burden of paying for medical expenses.

Inflation-protected coverage

Health insurance policies provide inflation-protected coverage. This means that your health insurance policy coverage increases every year based on the inflation index. Such a feature ensures that you stay secure against rising healthcare costs.

Personalised coverage

Health insurance policies offer personalised coverage based on your age, lifestyle, and healthcare needs. This means that you can choose a policy that meets your specific requirements, and you only pay for the coverage you need.

Peace of mind

Finally, having a health insurance policy provides peace of mind and reduces stress levels. In case of a medical emergency, you can focus on recovering and getting the best medical care without worrying about the funds.

Things to consider when buying health insurance plans

Choosing a health insurance policy from a plethora of options available in the market can get difficult. Here are some points that you must consider when buying health insurance plans.

Evaluate the ideal insurance plan type and coverage for you/your family

Before choosing a health insurance plan, it is crucial to determine which type of policy suits you best. An individual policy implies insurance for a single person, while a family health insurance plan extends the insurance coverage to your immediate family members. Senior citizen plans, specifically designed for elderly individuals, provide adequate healthcare coverage to them. Knowing which type of health insurance policy to choose will help you make the right decision.

Check if the coverages offered cater to your health needs

The ideal insurance coverage for you and your family varies based on several factors, such as your current health status, lifestyle, and healthcare needs. Therefore, it is essential to assess your insurance requirements before deciding. A comprehensive insurance plan that provides coverage for hospitalisation, pre-and post-hospitalisation expenses, doctor visits, and ambulance services, among others, can be a good starting point.

Check the add-on features you can opt for

Apart from the basic insurance coverage offered, most insurers provide add-ons that provide additional benefits. For instance, some insurers provide critical illness cover that offers protection against life-threatening diseases. Maternity coverage is another add-on feature that covers pregnancy, childbirth, and postpartum care expenses. Knowing which add-on covers you want to opt for can help enhance the coverage of your health insurance policy.

Know the applicable sub-limits

Health insurance policies generally come with sub-limits or capping on specific expenses like room rent, consultation fees, medical tests, etc. Knowing these sub-limits will help you to avoid unpleasant surprises in the form of additional expenses that may not get covered under your policy.

Read all policy inclusions and exclusions

Reading all policy inclusions and exclusions is vital before purchasing a policy. Ensure to go through the terms and conditions of the policy carefully, including the waiting periods and deductibles. This will ensure complete transparency and no surprises later.

Know the claim settlement procedure

Claim settlement procedures differ among insurers. You can either make a cashless or reimbursement claim. Cashless settlement allows you to get medical treatment without paying anything upfront, while reimbursement requires you to pay the bills initially and seek reimbursement later. Knowing the claim settlement procedure help in availing health insurance policy benefits easily.

Know about the medical check-ups required before policy acceptance

Insurers generally require medical check-ups before accepting a policy. Based on the result, the insurer decides on the coverage offerings.

Choosing the right health insurance plan requires due diligence. Assess your medical requirements and budget before planning to buy a health insurance policy. Considering all the above points make the right decision and choose the best health insurance plan for yourself and your family.

Frequently asked questions

What is the importance of health insurance?

Health insurance is essential as it protects you and your family against unforeseen medical expenses, rising healthcare costs, and financial uncertainties. It offers comprehensive coverage for hospitalisation and treatment costs, ensuring you receive the best medical care without worrying about the funds.

Is a ULIP (Unit Linked Insurance Plan) a type of health insurance plan?

No, a ULIP is not a type of health insurance plan. It is a type of life insurance plan that offers both insurance and investment opportunities. Health insurance provides coverage for medical expenses incurred during a medical emergency and does not offer any investment opportunities.

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