What is Health Insurance?

Know what a health insurance policy is, its benefits, and check how to buy.
Check Our Health Insurance Plans
3 min

The cost of medicines and hospitalisation charges are soaring high every year. A sudden healthcare emergency can put pressure on your pocket. By purchasing a health insurance policy, you can enjoy financial freedom from hefty medical bills.

Read on to know more about what health insurance is and how it can benefit you.

What is health insurance?

Health insurance is a product that provides coverage for medical expenses, offering a safety net for individuals or groups against the high costs of healthcare. Policyholders pay regular premiums, and in return, the insurance plan covers various medical services, including hospitalisation, surgeries, medications, and preventive care. Health insurance aims to alleviate the financial burden of medical treatments, promoting access to necessary healthcare services and contributing to overall well-being.

Therefore, you must know what is health insurance properly before buying it. Check the eligibility criteria, coverage amount, and inclusions/exclusions of the policy. It will help you make full use of the policy during medical emergencies.

Different types of health insurance policies

There are various types of health insurance policies designed specifically to cater to individual requirements. These policies cover a range of medical expenses. Here’s the list of the different health insurance policies in detail.

Individual health insurance

Individual health insurance covers the medical expenses of an individual. This type of health insurance policy covers the specific needs of the individual or the policyholder. It covers all kinds of medical expenses, including hospitalisation, medical tests, surgeries, and doctor visits. Additionally, it allows individuals to customise the policy as per their healthcare needs and budget.

Family health insurance

Family health insurance or a family floater health insurance designed for families work in group policy manner. It offers a single policy for the entire family, making it convenient to manage and save money compared to individual policies for each family member. The sum insured in the policy is distributed among all the enrolled members.

Senior citizens health insurance

Senior citizens health insurance specifically provides coverage for individuals above the age of 60 years. Health insurance for senior citizens covers pre-existing conditions and provides cashless hospitalisation benefits. It also offers higher coverage for specific medical conditions that may arise due to age. You also get coverage for critical illnesses.

Maternity health insurance

Maternity health insurance covers the medical expenses of childbirth and pregnancy-related complications. It offers coverage for prenatal and postnatal expenses, delivery charges, and newborn baby expenses. It also offers cashless hospitalisation and covers any unforeseen medical emergencies.

Critical illness health insurance

Critical illness health insurance, as the name suggests, covers medical expenses for critical illnesses such as cancer, stroke, heart attack, and other life-threatening illnesses. It provides a lump-sum amount to the policyholder if diagnosed with a critical illness for the treatment and diagnostic tests expenses.

Group health insurance

Group health insurance covers the medical expenses of a group of people, such as employees of a company or members of a society. Many employers offer group health insurance as one of the major employee benefits to the employees. This type of policy offers coverage for hospitalisation, medical tests, surgeries, and doctor visits, among others.

Top-up health insurance

Top-up health insurance provides additional coverage over and above the existing health insurance policy. It covers the medical expenses that exceed the sum insured in the existing policy.

How does health insurance work?

The process starts with the policyholder paying a premium to the insurance company based on factors such as age, health history, lifestyle habits, etc. Once the policy gets active, it covers the medical expenses such as hospitalisation, surgeries, medical tests, and consultations expenses.

You can choose a cashless hospitalisation or reimbursement of the medical expenses incurred. For cashless hospitalisation, you only need to visit the insurer’s network hospital to avail the treatment. The insurer will take care of the hospital bills directly, and you do not have to worry about any immediate payment to the hospital. For reimbursement claim, you need to first pay the hospital bills and submit the relevant documents to the insurance company for reimbursement.

However, it is important to note that every policy has certain limitations and exclusions, which the policyholder should know. Additionally, the policyholder should regularly review their policy to ensure that it caters to their evolving healthcare needs.

Benefits of a health insurance policy

You get the following benefits on a health insurance policy:

  • The policy covers your in-hospitalisation and pre-and post-hospitalisation expenses up to a pre-determined amount.
  • Apart from hospitalisation expenses, you also get coverage for treatments taken at home and daycare procedures.
  • You get tax benefit for the premium paid towards the health insurance policy.
  • You can enhance your health insurance policy with add-on covers. You can add critical illness cover, OPD care, hospital cash cover, and more to get complete financial security.
  • You can restore the sum insured with the sum reinstatement benefit. This benefit comes to help when you have exhausted the sum insured during a policy year.
  • Some health insurance policies also offer compensation in case of income loss due to accidental disability.

How to choose a health insurance plan?

With most health insurance companies offering insurance policies online, buying a health insurance policy has become easier. Also, choosing a health insurance policy has become convenient, as you do not have to screen through several policy documents or visit branches. You can compare and buy health insurance policies online.

  • Simply visit the preferred insurance company’s website and look for the plan that you want to buy.
  • Compare the coverages offered, premium amounts, terms and conditions of the different policies.
  • If you are looking for a family health insurance policy, check the age criteria. Basis the coverage offered; add your family members on to the plan. However, you must look for a separate health insurance plan for senior citizens.
  • Health insurance plans for senior citizens offer coverage specific to the medical needs of 60 and above age group.

Read on to know in detail the factors you must consider while buying one. Also, learn about the different health insurance benefits.

Mediclaim plan vs critical illness insurance plan

Mediclaim and critical illness insurance plans both offer health coverage but understanding the differences can help you choose the right plan. Here is a quick comparison between the two plans:

Scope of coverage

  • Mediclaim plans offer coverage for hospitalisation, pre-and post-hospitalisation expenses, medical tests, surgeries and more. It covers a wide range of illnesses and treatments.
  • Critical illness insurance plans provide coverage only for specific illnesses mentioned in the policy document. The coverage is limited to critical illnesses like cancer, heart attack, kidney failure, etc.

Coverage amount

  • The coverage amount in a mediclaim policy varies from plan to plan and depends on the insurance company.
  • In critical illness insurance plans, the sum insured depends on the diagnosis of a critical illness and its stages. The coverage amount may vary as per the policy terms and conditions.

Benefits offered

  • The benefits offered under mediclaim plans include cashless hospitalisation, tax benefits, customisable options, etc.
  • The benefits of critical illness insurance plans include lump sum benefit on diagnosis of the critical illness, tax benefits, and coverage against specific critical illnesses.

Which one to buy?

  • If you want basic coverage against day-to-day medical expenses, you can choose a mediclaim plan.
  • A critical illness insurance plan is a better option if you want coverage against critical illnesses that have high treatment expenses.

Factors you must consider before deciding to buy a health insurance plan

Here are some aspects that you must check while buying a health insurance policy:

  • Check the premium amount and whether it justifies the coverage offered on the policy.
  • Check the claim settlement ratio of the insurance provider. This gives an idea of their track record of settling claims in a year. It would help if you chose an insurance provider with a high claim settlement ratio.
  • Check the range of coverages offered. Consider opting for a policy that includes hospitalisation expenses, pre-and post-hospitalisation expenses, ambulance coverage, and accidental coverage.
  • Check the list of network hospitals for cashless treatment. Here you can get admitted or treated without paying any cash upfront. The insurer will take care of the bills and all the claim settlement formalities with the network hospital.
  • Check if the policy covers any pre-existing diseases or implies any waiting period to avail the benefits for pre-existing diseases.
  • Know all the terms and conditions of the policy to avoid any hassle at the time of claim settlement.
  • Read the terms and conditions of the policy properly.

Now that you know what a health insurance policy is and how it benefits you, choose the one that suits your requirements.

You can visit the Bajaj Finance Insurance Mall to choose from a variety of health insurance policies for yourself and your family. Bajaj Finance offers a 100% digital buy process, encouraging people to buy health insurance policies to stay financially secure during emergencies.

Check some of the related articles

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Waiting period of health insurance

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Mediclaim vs health insurance

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Lifestyle diseases

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Medical reimbursement

ABHA card

Medical reimbursement

Frequently asked questions

What is a health insurance in India?

Health insurance is a contract between the insurer and the insured. It offers coverage for expenses against medical and surgical treatments to the policyholder. You can either claim for cashless treatment or get reimbursement for the hospital and treatment bills. It covers hospitalisation, pre-and post-hospitalisation expenses. Health insurance also covers modern and traditional treatment methods. This includes AYUSH treatments, robotic surgeries, oral chemotherapy, and more. You also get coverage for daycare procedures that require less than 24 hours of hospitalisation.

What are the types of health insurance policies available in India?

You get various types of health insurance policies in India.
1. Individual health insurance
2. Family health insurance or family floater plans
3. Group health insurance
4. Senior citizen health insurance
5. Maternity health insurance
6. Top-up health insurance
7. Critical illness insurance

What does medical insurance mean?

Medical insurance, also known as health insurance, covers the medical expenses incurred for treatments. It covers hospitalisation and treatment expenses in case of any suffered any illnesses or accidental injuries. You also get coverage for other medical-related expenses like room rent, doctor’s fees, organ donor expenses and more.

What is a health insurance claim?

A health insurance claim is a request for reimbursement from an insurance company for medical expenses incurred by an individual who has a health insurance policy.

What is the aim of health insurance?

Health insurance aims to provide financial protection against the cost of medical expenses for individuals or groups. It allows individuals the ability to access healthcare services and treatments without having to bear the full financial burden of the expenses.

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