All You Need To Know About Health Insurance

All You Need To Know About Health Insurance 1

All You Need To Know About Health Insurance

All You Need To Know About Health Insurance 2 1CHAPTER 1: HEALTH INSURANCE OVERVIEW1.1 HEALTH INSURANCE1.2 Health Risks1.3 Importance of Health Insurance1.4 Health Insurance Policies in India1.5 DifferentFormsofHealthInsurancePoliciesinIndia1.6 MediclaimPolicy(group/familyfloaterandindividual) CHAPTER 2: THIRD PARTY ADMINISTRATOR (TPA)2.1 Definition2.2 BenefitsofTPAtopolicyholders2.3 BenefitsofTPAtotheinsurancecompanies2.4 HowdotheTPAsfunction CHAPTER 3: BUYING & MAINTAINING HEALTH INSURANCE3.1 Variousways/platformstobuyhealthinsurance3.2 Factorstoconsiderwhilebuyinghealthinsurancepolicy3.3 Online Policy Renewal3.4 HealthInsurancePortability3.5 BenefitsofHealthInsurancePortability CHAPTER 4: DIFFERENT TYPES OF HEALTH INSURANCE4.1 IndividualHealthInsurance4.2 FamilyFloaterInsurance4.3 CriticalIllnessInsurance4.4 Maternity Insurance4.5 SeniorCitizenInsurance

CHAPTER 5: IMPORTANT ASPECTS OF HEALTH INSURANCE5.1 Policy Inclusions5.2 Policy Exclusions5.3 What factors impact Health Insurance Premium?5.4 CashlessHospitalization5.5 Day Care Treatment5.6 Pre&PostHospitalization5.7 Grace Period5.8 ClaimSettlement5.9 FreeLookPeriod5.10 WaitingPeriod5.11 TaxBenefitsofHealthInsurance

Content

All You Need To Know About Health Insurance 3 1 Chapter 1:

HEALTH INSURANCE OVERVIEW

1.1 Health InsuranceEveryday,wecomeacrossinstancesofpeopledyingduetotheirinabilitytoget timely treatment. Not that there is a paucity of hospitals or treatment facilities in India, but because the hospitalisation expenses and costs ofmedicaltreatmenthaverisentoalevelthatveryfewcanafford.Inflationhashadanoverbearingeffectonmedical costs,whichexplains the increasingneedtobuyhealthinsurance.


What is health insurance?Simplysaid,itisakindofriskcoveragainstincreasingmedicalandsurgicalexpens-es.Ahealthinsurancepolicyisanagreementbetweentheinsurancecompanyandthe policyholder inwhich the former is liable to pay for the hospitalisation andtreatmentexpensesofthelatterinlieuofregularpaymentofpremiumsduringthepolicyterm.Withahealthinsurancepolicyinplace,thepolicyholdercanseekthebenefitsofeither cashless treatmentor reimbursementof theamount spentontreatment,ifandwhenrequired.However,theinsurerisliabletopayoffthemed-icalbillssubjecttotheconditionthatthetotalbillingamountdoesnotexceedtheamountofsumassuredandpremiumsarepaidontime.


Let’s understand the concept of health insurance with the following example.

JogeshKumar,aged34,isamarriedmanwithtwochildren.Inaddition,hisagedparentsarealsolivingwithhim.TheentirefamilyrunsonJogesh’sincome.ThismeansthatJogeshisnotonlyresponsiblefortheirfinancialsecuritybuthastoalsotakecareoftheirhospitalisationandtreatmentexpensesirrespectiveofwhetherthemedicaltreatmentisplannedorsudden.

SupposeJogesh’swifehasbeensuddenlyhospitalisedandneedstobetreatedforsomemedicaldisorder.ThetotalhospitalbillamountstoRs.3,69,000.JogeshwhoalreadyhadboughtahealthinsuranceplanwithasumassuredtotallingRs.4,00,000.SinceJogeshhadoptedforthecashlesstreatmentoption,hesimplysubmitsthehealth insurancecardatthe insurancedeskofthehospital.Theinsurancecompanyisnowliabletopayoffthemedicalbills,thus,relievingJogeshfromtheliabilityofhavingtopaysuchahugemedicalbillfromhisaccumulatedsavings.

ImportantpointsabouthealthinsuranceItisimportanttonotethatyourhealthinsurancepolicywillcoveronlythosemedicalexpensesthatarenotincurredontreatmentof illnessesnot coveredor excludedunder thepolicy.Almost everyhealth insuranceplan sold in India covershospitalisationexpenses, day care treatment, the amount expended on domiciliary care, organ transplantation, ambulance expenses, etc.Additionally,healthinsurancepoliciestakecareofpreandpost-hospitalisationexpensestoo.

ThoughmanyhealthinsurancepoliciesinIndiacoverbothpreandpost-hospitalisationexpenses,itisimportanttokeepinmindthefollowingpointsbeforeoptingforahealthinsuranceplan.Theseinclude:

• Theinsurancecompaniesdonotcoverpreandpost-hospitalisationexpensesforaninfiniteperiod.Mostinsurancecompaniescovertheexpensesincurredfor30daysor60daysbeforehospitalisation.Similarly,theycoverpost-hospitalisationexpensesfor60 days or 90 days after getting discharged from the hospital;

• Theactualnumberofdaysforwhichpre-hospitalisationandpost-hospitalisationexpenseswouldbecovereddiffersfromoneinsurancecompanytotheother,thus,makingitimportantforthepolicyholdertoreadthedetailsofthepolicybeforebuyingit;


• The insurance company is liable to pay for the pre-hospitalisation expenses subject to the condition that the expenseswere incurred for the illness ordisease forwhich the insuredwashospitalised. Similarly, the insurerwouldpayoff thepost-hospitalisationexpensesonlyiftheyareincurredontheailmentforwhichtheinsuredhadbeenadmittedtothehospital.

1.2 Health RisksUncertainty is theonlycertainelement inone’s life.Thisexplainswhysomepeoplearealways inahurrytoachieve,succeedandensurecompletefinancialsecurityfortheirlovedones.Sadly,healthgetsignoredinthedailygrindoflife.Whileweallhavebeentaughttheimportanceoftheage-oldadage“HealthisWealth”,peoplealwaystendtoignoreandunderminetheneedformaintaining good health in the pursuit of wealth.

CommonhealthproblemsaffectingIndiansThe Indian society is fraughtwith lifestyle problems stemming from smoking habits, drinking culture, sleeping late at nights,eatingjunkfood,dependenceonvehiclesevenfortravellingshortdistances,etc.Thosewithsmokinganddrinkinghabitshavetopaygreateramountsofpremiumsonnon-smokersandnon-drinkers.Thisexplainswhysomeinsurancecompaniesrequiretheircustomerstogothroughcertainessentialmedicaltestsbeforedecidingontheirhealthinsuranceproposal.

Forexample,AnmolJha,aresidentofBihar,isachainsmoker.Littledoesherealisethathissmokinghabitswillmakehimpronetoserioushealthproblems.AnmolJhaoptsforahealthinsuranceplansoldbyaprivateinsurancecompanyaftergoingthroughallthepoliciesbeingsoldinthemarketandcomparingtheirfeaturesandbenefits.Theinsurancecompanyhehaschosenagreestosellhealthcovertocustomerswithsmokinghabitstoosubjecttotheconditionthatthecustomershavetoundergoacompletemedicalcheckupasprescribedinthetermsandconditionsofthepolicy.Anmolwillhavetobeartheexpensesofthemedicalcheckupbeforebuyingthepolicy.

Now,Anmolhastwooptions.Eitherheassentstotheideaofgettingthroughathoroughhealthcheckupasprescribedbytheinsurancecompanyoroptsforadifferentinsurerthatdoesnotseekanymedicaltestbeforesellingthepolicy.However,ineithercase,Anmolbeingasmokerwillhavetopayhigherpremiumsifhewishestoavailthebenefitsofhavingahealthinsuranceplantoensurehealthcoverforhimselfandhislovedones.


Pollutionisanotherreasonthatmakesanincreasingnumberofpeoplesusceptibletohealthhazards.SedentarylifestyleaddstotheexistinglistofdisordersaffectingIndiansofallagegroupsunbiasedoftheireconomicconditions.SomecommonillnessesthatmostIndiansareafflictedwithinclude:

Respiratory Problems; Gastrointestinal Diseases; Obesity; Cancer; Cardiovascular Disorders; Hormonal Imbalance; Food Allergies; Mental Illnesses.

1.3 Importance of Health InsuranceThepenetrationofthehealthinsuranceconceptisrelativelylowinIndia,whichexplainswhymanypeoplearebereftoftimelymedicalaid.Therisingcostoftreatmentinthecountryhasledtoinequitableaccesstohealthcareservices.Accordingtodetailspublished in the National Health Profile 2018 unveiled in June 2018, only 27 per cent of the country’s total population hashealthcoverage.Thismeansthatthere isstillanardentneedto improveandexpandthe insurancecoveragethatcoversonlyapercentageofthecountry’svastpopulation.Outofthetotalnumberof Indianswhohaveboughthealth insurancetilldate,roughly79percentwerecoveredbythepublic insurancecompanieswhereastheresthadaccessedthenecessarycoverfromprivateinsurancecompanies.

WhiletheNationalHealthProgrammeshaveplayedaprominentroleintacklingthegrievoushealthdisordersinIndia,theshareofpublicexpenditureonhealthby theCentre is graduallydecreasing.Manypeople in their younger yearsdonot realise theneedforhavinganadequatemedicalcovertotackletheburdenofsuddenmedicalemergencies.Sincetheyoungarelesslikelytofallillorbediagnosedwithanyseriousdisorder,theyfailtorealisehowpayinganominalpremiumforhealthinsurancewillensurethemthefreedomtoseekthebestpossibletreatmentinthelongrun.Moreover,theinsuredcangetthemselvestreatedattheirchoiceofhospital,providedthatitislistedinthenetworkofhospitalsoftheinsurancecompanytheyhavechosentobeassociated with.


Why do you need health insurance?Lifestylehabits, increasingpollution levels,aggravatingstresslevelsandaugmentingpervasivenessofdiseaseshaveenhancedtheriskofsufferingfromunforeseenhealthproblems.Asuddenneed for treatmentmay leave thepatient’s family financiallydistressedastheyhavetodigdeepintotheirsavingstopayforthecostsoftreatment.Somefamiliesalsohavehadtoliquidatetheir investments toensure that the lovedonesget thebestpossible treatment. Health plans, on the other hand, keepthe policyholders and their loved ones protected by payingoff themedicalbills and, thus, relieving the families fromanunwarranted financial crisis.

Listedfollowingaresomefactorsthatshedlightonwhybuyinghealth insurance is important, but must be included as anessentialfinancialinstrument.Thesemayinclude:

➢ Financialsecurityistheultimateaimofeveryindividualorfamilybelongingtoanyincomegroup.However,theextentof financial security not only depends on how much you investbut to theextent you can saveonyour income levels.Ignoringtheneedtoinvestinahealthinsuranceplanresultsinmanypeoplehavingtopaytheirmedicalbillsbywithdrawing

from their savings account. Hefty bills may also cause themto postpone investing in important financial instruments thatprovide security in the long run. Health insurance plans notonlydefrayrisingcostsofmedicalexpensesbutensureaddedtax benefits too as the insured can claim a deduction on thepremiums under Section 80C of the Income Tax Act.

➢ A shift in lifestyle has may have many medicalcomplications. As opposed to earlier days when people used towalk for long hours or indulged inmanual labour,most ofthem live a sedentary lifestyle, thus, resulting in continuedhealth problems. Having a health insurance policy in placeensuresthatthepolicyholderavailsmedicalcheckupsregularly,getsthemuch-neededtreatmentatthebestavailablemedicaltreatment facilities.


1.4 Health Insurance Policies in IndiaHealth insurance plans are an essential element of one’s financial planning. A few thousands of premiums paid regularly in advancecan help offset the expenditure worth lakhs of rupees on medical treatment.Buyinghealth insurance isequivalenttopayingforone’ssecuritythatmustbedoneafteralotofconsideration.Someofthetop health insurance policies sold by insurance companies in Indiainclude:

National Health Insurance; Reliance Health Insurance; Bharti AXA Health Insurance; BajajAllianzHealthInsurance; Aditya Birla General Insurance; SBI Health Insurance; HDFCERGOHealthInsurance; Max Bupa Health Insurance; IFFCOTokioGeneralInsurance; FutureGeneraliHealthInsurance; Star Health Health Insurance; Apollo Munich Health Insurance; ACKO General Insurance; Royal Sundaram Health Insurance; Tata AIG Health Insurance.


1.5 Different Forms of Health Insurance Policies in India

Not all health insurance policies sold by the insurancecompanies in India are the same.More than ever before,the health insurance sector in India is undergoing a sea change as insurance companies are constantly innovatingand re-inventing their products in a bid to grab a largermarket share. Customization of health insurance plans isthebuzzwordasinsurersmodifytheirproductstosuittheircustomers’ needs.

Whether you are opting for cashless settlement or reimbursement of the claims made, you will always finda health insurance plan suited to your needs. While many people buy health insurance policies to cover medicalexpenses stemming from planned treatment in future,policiesthatmeetmedicalemergenciesarealsoavailable.Someofthepopularhealthinsurancepoliciesinclude:

Individual Health Insurance Policy: Planning a health cover for yourself? Fret not as a number of insurancecompanies sell health insurance plans that ensure a health cover to individuals against illnesses while covering the risk ofhospitalisation and medical treatment. These policies offer benefits like cashless hospitalisation, reimbursement of medicalexpenses,preandpost-hospitalisationchargesinadditiontoadd-oncoverbenefits.However,asthenamesuggests,thiscoverisavailableforanindividualonly,andhence,thesumassuredmustbechosenaccordingly.

Family floater health insurance: Nothing matters more than family. This is precisely what family health plans or familyfloaterinsuranceplansareallabout.Theideatoensurethatyourfamilyavailsthenecessarytreatmentattheirchoiceofahospitalwithoutworryingabouttheresultinghospitalcharges.Thiskindofcoverbringstheentirefamilyunderoneumbrella.Theseplansofferafixedamountofsumassured,whichmeansthattheinsurancecompanywillpayfortreatmentofthefamilymembers (oneormore thanone) subject to the condition that thehospital bill doesnotexceed theamountof sumassuredpredeterminedwhilebuyingthepolicy.

Senior citizen health cover: Seekingcoverforagedparentsusedtobedifficultonce.This isbecauseoldpeoplearemorelikelytofall illorseektreatmentformajorhealthdisorders.Sincetheriskassociatedwiththeirhealth ishigh,mostcompaniesrefrainedfromprovidingthemwithanykindofhealthcover.However,theinsurancescenariohasdrasticallychangedin the last few years with new players entering the market.


Maternity cover health insurance:Familyplanninghasitsownplaceinfinancialplanningtoo.Thatiswhymanyinsurancecompaniessellhealthinsurancepoliciesthatcovertheexpensesonpreandpost-natalcare,childdeliveryandvaccinationofthenewbornsinthefamily.However,theexpensesontreatmentofthenewbornchildaresupportedbytheinsurancecompanyonlyuntilthepolicyisactive.Thereareotherpoliciestoothatcoveradditionalexpensesincludingcoveringtheamountexpendedontransportingthemother-to-betothehospitalofyourchoice.

Top-up plans:Asthenamesuggests,theseplanshavetheadvantageoftop-uporthebenefitsofanaddedcoverageamount,i.e.,overandabovetheamountofcoveryouhadoptedforwhilebuyingtheplan.Theseplansareboughtassupplementaryplans, i.e.,aplaninadditiontothebasichealthcoverthatyouhadboughtinthefirstplace.Thetop-upplansoperateontheconceptof“deductiblelimit”.Thismeansthattheplanwillnotcomeintoforceuntilthehospitalexpensesexceedaparticularlimit also called the deductible limit. If the claimmade by the policyholder exceeds the deductible limit, then the insurancecompanyisliabletopaytheexcessamount.

Super top-up plans: Theseplansarewaybetter than the top-upplansandmustbeboughtby thosewhose lovedonesarepronetoseriousdisordersduetoafamilyhistoryofillnesses.Sincethetreatmentoftheseillnessesincursaveryhighexpenditure,itmakessensetopayfortheseplanssoastooffsettherisingmedicalexpensesinthelongrun.Asopposedtotop-upplanswhereeachclaimoverandabovethedeductiblelimitissaidthetriggertheplan,insupertop-upplanstheaggregateclaims incurred during any particular year are considered.

This can be explainedwith the help of an example. Take, for instance, ShyamSundar has bought a super top-up planwith athreshold limitofRs100,000.SupposeShyamhasmadetwohealth insuranceclaimsofRs80,000andRs70,000respectively.SincethetotalclaimmadeonthetwoplansamountstoRs1,50,000whichisinexcessofthethresholdlimitofthesupertop-uppolicy, thenthe insurancecompany is liabletocompensatetothetuneofRs50,000(aggregateofthetwoclaims–thresholdamountlimit).

Fixed benefit plans:Thesearealsocalleddefinedbenefitplans.Insteadofcompensatingfortheclaimmadebythepolicyholders,theseplanspromiseafixedbenefitpredeterminedwhilebuyingtheplan.Theplanbenefitsareirrespectiveoftheclaimsmadeonthemandmayexceedorbelessthantheclaimamounts.


There are differentkindsoffixedbenefit plans. These include:➢ Critical Illness Plans:Thesearealsoakindofhealthinsuranceplansthatoperatedifferentlyandprovideaspecificamountofcoverageonlyduringhospitalisationortreatmentofspecificcriticaldisordersonly.Everycriticalillnessplanisdifferentinthesensethateachplancoversalistofspecificcriticalillnessesonlyandisactivatedonlyifthepolicyholderreceivestreatmentforthatparticulargrievousdisorderonly.Insteadofpayingtheclaimsmadeonthehospitalisationcosts,theinsurancecompanyisliabletopayinalumpsumthepredeterminedcoverageamounttothepolicyholder.Amajorityoftheinsurancecompaniessellingcriticalinsuranceplanscoverthefollowingdisordersunderthepolicy:

- Major organ transplantation;- Cancer;- Pulmonary arterial hypertension;- Cardiovascular disorders;- Aorta graft surgery;- Coronary artery bypass surgery;- Multiple sclerosis;- Kidney failure;- Paralysis.

➢ Hospital Daily Cash Plans: Theseplansarealsocalledhospitalcashbenefitplansandpromiseafixedamountforeachdayofhospitalisationintheeventofany,irrespectiveofthenatureofthetreatmentoftheinsured.Theamountofmoneygivenoutbytheinsurancecompanyisunbiasedoftheamountspentonhospitalisationandtreatment.

➢ Personal Accident Cover: Thesearenotindividualhealthinsuranceplansbutofferedasriderstothehealthcoverbought.Opting for this riderbypayinganadditionalamountofpremiumbenefits thepolicyholderas the insurancecompany is liabletopayforhospitalisationandtreatmentincaseofanaccident.Thepayoutbytheinsurerisintheformofafixedbenefitandisindependent of the amount spent on treatment.


1.6 MEDICLAIM POLICY (Group / Family Floater And Individual)Goodhealthisanecessity.Thechallengeofbeingfitandremainingfitis,attimes,marredbygeneticdisorders,congenitalproblemsorillnessesstemmingfrom pollution and unhealthy lifestyle habits. Advancements in medicalscienceandinnovationintreatmentmethodshaveensuredthatpeopleareabletoseeknecessarytreatmentwithoutdelay.However,inflationhashaditseffectonmedicalexpensestoo,thus,resultinginmanypeopleremaininguntreated and suffering from their disorders. Health insurance fulfils the needbyavailingthenecessarymedicalcover in lieuofregularpaymentofnominal premiums.

Currently, health insurance plans are sold under two categories:

• Individualhealthinsurance;• Familyfloaterhealthplans.

In addition, companies today are availing thebenefits of health insurancecoveragetotheiremployeesundervariousGroupHealthInsuranceschemes.

Individual health plans are taken by policyholders to insure themselves.TheFamilyhealthplansareactuallyextendedversionsof individualhealthinsurancepolicies that customersbuy toensure that their lovedone(s)ordependent(s) are secure against unforeseen medical disorders and are,thus,abletoseektreatmentattheirchoiceofhospital.Underfamilyhealthinsurance,onecanseekcoverforspouse,childrenandagedparentsbesidethemselves.


Acorporateorgrouphealthinsurancepolicyislikeabenefitthatispassedonbyacompanytoitseligibleemployees.Thisisoneoftheperksthatmostcompaniesarecurrentlygivingtotheiremployeestoensure their loyaltyandprolongedservice.Somegrouphealthinsurance policies are structured to include the family membersof theemployeesunder theambitof thepolicies. The topgrouphealthplanssoldbyinsurancecompaniesthatsellhealthinsurancepoliciesinclude:

● StarHealthandAlliedInsurancePolicy;● HDFCERGOGroupHealthInsurance;● FutureGeneraliGroupHealthInsurance;● ICICILombardGroupHealthInsurance.

Let us understand the kinds of health insurance plans with the help of some examples:

Example of An Individual Health Insurance Plan

Shikha Dhawan, aged 28, works with the private sector and understands the need to buy health insurance. Shikha’s parents are retired Government employees. This means that any expenses incurred on their treatment are reimbursed by the government. Since Shikha is not covered under any health insurance policy, she decides to buy a health insurance plan that would secure her against any future hospitalisation and medical costs, if any. Since Shikha chooses to get only herself insured, she chooses to buy an Individual Health Insurance Plan.

Example of Family Floater Insurance Plan

Niladri Shekhar Dutta, aged 34, is a married man with two children and lives with his parents in the same house. Being the only earning member in his family, each member of the family is dependent on Niladri’s income. This also implies that Niladri has to bear every expense including the medical costs of his family members.


Niladri realises that hospitalisation expenses and treatment costs are gradually rising. He seeks a health insurance plan that would cover his entire family in lieu of nominal premiums. He logs on to the internet to read about various family floater plans and chooses one that promises an adequate amount of coverage at reasonable premium rates. Since the family floater health policy covers each member of his family, he is secure from the burden of bearing exorbitant medical costs incurred during the treatment of his family members at the hospital of his choice. Moreover, the insurance company he chooses promises him additional benefits like claim settlement of daycare treatment expenses in addition to the amount expended as pre and post-hospitalisation expenses.

Example of a Group Health Insurance Plan

Sakshi Mehra, aged 32, is employed with a company that promises perks and benefits as an effective employee retention method. The company has tied up with Kotak Insurance that covers all its employees under its Group Insurance Cover Plan. In lieu of the premiums paid by the company, each employee including Sakshi is guaranteed a cover, not exceeding Rs 4 lakhs, to secure against treatment costs in case of any sudden medical emergency stemming from illness or accident. Sakshi, who is currently not covered under any health insurance policy, finds it an effective financial instrument to manage future medical expenses, if and when arise.

However, Sakshi also realises that this cover is guaranteed only until she remains employed with the company. She will be bereft of this important cover once she resigns or is officially relieved from her services.


THIRD PARTY ADMINISTRATOR (TPA)

2.1 DefinitionTheinnovativeideaofintroducingtheconceptofThird-PartyAdministrators(TPA) was first introduced by the Insurance Regulatory DevelopmentAuthorityofIndia(IRDAI)in2001.OnecanfindthelistofTPAsontheIRDAIsite.Asevidentfromthename,theseTPAsarethird-partyentitieslicensedbytheIRDAItoensureaseamlessandhassle-freeclaimsettlementprocess.Theydo thisbyactingas the intermediarybetween thepolicyholder, thehealthinsurancecompanyandthehealthcareserviceprovider.Forexample,


NarayananKrishnamoorthy,aged35,needsurgentmedical treatmentasadvisedbyhisdoctor.Hegets in touchwith theTPAandinformsabouttheneedtoseekmedicaltreatment.TheTPAadvisesthepolicyholderaboutthenearesthospitallistedintheinsurer’snetworkandaidshimintheclaimprocesspost-dischargefromthehospital.TheTPAisliabletohelpthepolicyholderirrespective ofwhether he had opted for cashless claims or reimbursement of the amount expended on hospitalisation andsubsequenttreatment.

TheIRDAIhaslistedcertainguidelinesgoverningtheworkingoftheTPAsengagedinprovidingnecessarymanagementsolutionstothehealthinsurancecompanies.ThemyriadresponsibilitiesofTPAsincludetimelypremiumcollection,seekingdetailsofthetreatmentfromthepolicyholderandintimatingaboutthesametotheconcernedhealthinsurancecompany,findingdetailsofthenetworkhospitalnearesttothepolicyholder,approvingtheclaimsraisedbythehospitalortreatmentfacility,approvingthecashlessclaimsraisedbythepolicyholdersanddisbursementofthebillingamounttothehospital.

TheconceptofTPAscameintoeffectafterthegovernmentallowedprivateinsurancecompaniestosellhealthinsurancepolicies.The inception of TPAs since 2001 has greatly increased the efficiency of the claim settlement process, thus, enhancing theeffectivenessofbuyinghealthinsuranceinIndia.

2.2 Benefits of TPA to policyholdersAnessentialbenefit isthatthepolicyholdergetsanopportunitytogettreatedatanyofthehospitals intheTPA’sempanellednetworkandmakeuseoftheservicesasperneedandchoice.Moreover,foreveryrecurringhospitalisation,thepolicyholderwillhavetheadvantageofknowingwhetherthetreatmentheorshewishestoundergoiscoveredunderthehealthinsurancepolicybought.Similarly,duringemergencyhospitalisation,allthepolicyholderorthedependanthastodoistoshowthehealthinsurancecardandgetadmittedatanyofthenetworkhospitalsfortreatment.Noamountwouldbechargedfromthepolicyholderoranyoftheinsuredunderthepolicyatthetimeofdischargefromthehospital.SomeTPAsprovideaddedserviceslikeanambulancereferraloradvisingaboutanysurgeonorspecialistwhocanhelp.

Statistics highlight how a lot of Indians continue to be ignorant. Sincemost of the customers are unable to understand thetechnical termsand jargons included in the insuranceproposal, they face the riskof claim rejection.TPAsenableanefficientdeliverynetworkthatensuresthatthepolicyholdersdonotfeelcheatedandaretheultimatebeneficiariesoftheinsurancetheyhad paid for.


BeforetheTPAscame intothepicture, lotsofpolicyholderscomplainedabouthowtheyfound itdifficult togettheirmedicalexpensesreimbursedfromtheconcernedinsurancecompany.However,asnowreimbursementsareroutedthroughtheTPAs,itistheTPAswhomeetthehospitalexpensesbypayingthehealthcareproviderfromtheirfundandthengetreimbursedfromtheconcerned insurance company.

2.3 Benefits of TPA to the Insurance CompaniesTheTPAs,sincetheywerefirstintroduced,havegonealongwayincurtailingthecostsoftheinsurancecompanies.Thisisbecausethe insurance companies did not have to spendon increasing or spreading their network throughout the country, especially,to the remoteareas.TPAsactas themostvital linkbetween the threeelementsof thehealth insurance sector including thepolicyholders,thehealthserviceprovidersandtheinsurancecompanies.Astreatmentfacilitiesscrambletomakemoremoneytoruntheiroperationsandearnprofits,insurancecompanieslookatallmeanstocontroltheircosts.Asanincreasingnumberofpeopleprefertooptforthecashlessoption,itistheroleoftheTPAstoidentifytheactualexpensesthatmayhavebeenincurredandthecredibilityoftheamounttobepaidbytheinsurancecompany.

2.4 How Do the TPAs Function?The TPAs function as the intermediary between the insurance company and the policyholders by facilitating the claim andsettlementprocesses.Tocustomersoptingforcashlesshospitalisationservices,theTPAsissuetheIDCardstothepolicyholders.Thesepolicyholderscanshowthesecardswhilegainingadmissiontothehospitalfortreatmentduringanemergency.Also,theTPAsassistthepolicyholdersbygivingthemdetailsaboutthenearesthospital inthe insurer’snetworksothattheymayavailthebenefitsofcashlesssettlement.However,ifthecustomeroptsforsomeotherhospitaloutsidetheinsurer’snetwork,thentheTPAenablesreimbursementoftheclaimpayment.Foreasyandquickclaimsettlements,theTPAcollectsallthenecessarydocumentsincludingbillsandthecopyoftheclaimtotheinsurancecompany. 3


BUYING & MAINTAINING HEALTH INSURANCE3.1 Various Ways / Platforms to Buy Health InsuranceBuyingpatternshavelargelychangedinthepastfewyears.Fromthebrick-and-mortarshowrooms,peoplehavemovedontovirtualplatformsthatallowthemtoshopfromthecomfortoftheirhomes.Paymentmethodshavealsochanged,whichmeansthatthestrainofhavingtocarrycashandfearoflosingithasbeenreplacedwithonlinebankingmethods and payment gateways that ensure immediate paymentwith justtheclickofabutton.

Inadditiontobuyinginsuranceplansoffline,interestedcustomerscannowlogontothesitesofthe insurancecompaniesfromwhichtheywishtobuyorsearchforthevariousinsuranceplanslistedonthewebsitesofmultipleinsurancewebaggregatorsincludingPolicyBazaar,BankBazaar,CoverFox,PolicyX,etc.Withsomanyplatformsofferingmultiplebenefitstopeoplelookingtobuyinsuranceproducts,onecouldnothaveaskedformore.


3.2 Factors to Consider While Buying Health Insurance Policy

The uncertainties of life have always prompted people torelyontechnological innovationsandmedicaladvancementsfor better living. Along with expectations, expenses havealsogoneupas isevidentfromrisinghealthcarecosts,thus,explaining the relevanceand importanceof includinghealthinsuranceasanessentialfinancialtool.Anincreasingnumberof insurance companies have now come upwith innovativehealth insurance products that promisemultiple benefits inlieuofnominalpremiums. Those looking for addedbenefitsoverandabovewhattheyarealreadygettingcaneasilyapplyfor the same by agreeing to pay over and above the basicpremium rates.

“Insurance” is not a new concept, especially, in the Indiancontext. However, most customers continue to be ignorantaboutthevarioustermsusedininsuranceandtheirsignificanceintoday’sliving.Withamultitudeofhealthinsuranceplanstochoosefrom,customersaresometimesconfusedandunabletochoosethehealth insurancepolicythatwouldservetheirneedsanddefraytheirmedicalcostsinthelongrun.However,a careful look at certain essential factors can help to make choiceoftherighthealthinsurancepolicy.Theseinclude:


Price of the product: Most customers flood to insurance companies selling cheap health insurance plans. What they failtorealisethatthepriceofanyhealthinsuranceplanissubjectiveandhasalottodowiththequalityoftheproductthatisbeingsold.Therelationshipbetweenpriceandqualityisfineandintricateandmustbelookedintoentiretyinsteadofconsideringeach separately. For any insurance company selling health insurance cover, the price of theproduct has a lot to dowith theunderwritingefficiencyoftheinsurerinadditiontoitsoperationalefficacy.Similarly,thepriceofanindividualplanwillalwaysbedifferentfromthatofafamilyfloater.Thisisbecausethepriceofthelatterdependsonthenumberofmemberscoveredandthequantumofcoverselected.

Incurred Claims Ratio: Nowthatoneisawareofthevariousproductprices,it’stimetolookattheIncurredClaimsRatio(ICR)ofeachinsurancecompany.TheICRisnothingbuttheratioofthetotalamountpaidinclaimstothetotalamountcollectedaspremiumsbytheinsurancecompany.Ideally,thevalueofICRmustbebetween50percentand80percent.Whilehaving an ICR on the higher end does highlight the company’s efficiency in settling the claimsmade by their customers, anextremelyhighICRvaluealsoimpliesthatthecompanyisgivingawaymorethanithasearned.Thismaymeanthatthecompanymay introduce new rules to clamp down on the claim settlement to restrain its capital outflow. Ignore companies with an ICR below50percentasthismeansgreaterchancesofyourclaimsgettingrejectedwhenneeded.

➢ Co-payment Clause: The co-payment clausemeans thatpolicyholderswouldbe required to foot aportionof themedicalexpensesthemselves.Mostinsurancecompanieshaveintroducedthisclausetorefraintheircustomersfromoptingforunnecessarysurgicalproceduresorfancytreatmentseveniftheymaynotberequired.Policyholdersmayberequiredtooptforco-paymentthatmayvaryfromzeroto10percent.Whilethismayseemthatacceptingtheco-paymentclauseallowspolicyholderstopaylowpremiumrates,itisequivalenttobearingapartofthemedicalcostsinthelongrun.Refrainfromacceptingpolicieswith a co-payment clause.

➢ Policy Exclusions:Whilechoosingahealthinsuranceplan,mostcustomerslookatthepolicyinclusionsonly.However,acareful lookatthepolicyexclusionsissimilarlyimportant.Thisisbecausemosthealthinsuranceplansareembeddedwithawaitingperiod,thus,relievingthemfrompayingforclaimstowardsthetreatmentofpre-existingdisorders.Thiswaitingperiodmayvaryfrom30daystofouryearsdependingontheseriousnessofthedisorderandtheamountofmoneyexpendedintheirtreatment.Inadditiontotheexclusionsforthepre-existingillnesses,someinsurersmayexcludepayingforcertainhospitalisationexpenseswithinthefirstfewmonthsoftheircustomersbuyingthepolicies.Basichealth insuranceplans includesublimitsforspecifictreatmentsthatmustnotbeignored.AllYouNeedToKnowAboutHealthInsurance 21


CustomersoptingforfamilyfloaterplansthatwouldcovertheiragedparentstoomustfindoutiftheirchoiceofpolicypaysforOPDchargesandambulanceexpensestoo.

Waiting Period:Nohealthinsuranceplancomeswithoutawaitingperiodfordiseasesthatthecustomershadbeendiagnosedwithbeforebuyingthepolicy.Theideaistooptforaplanwithalesserwaitingperiodorthatplanwhichhasfewerexclusions corresponding to the waiting period clause.

Cashless Hospital Network: Statistics by the IRDAI in the past have revealed how the average claim payout inthecaseofreimbursementsettlementisonlyhalftheamountsettledbycashlessclaimsettlement.Prefertooptforacashlesssettlement claim. Scan through the insurer’s network of hospitals that offer the cashless settlement. One can find the list of networkhospitalsontheinsurancecompany’snetwork.Findoutifyourchoiceofhospitalfallswithintheinsurancecompany’scashless network.

Thoughthereisnoharminchoosingthereimbursementoption,cashlesssettlementfaresbetterasthepolicyholderssimplyhavetoshowthehealthcardissuedbytheinsurerandseeknecessarytreatment.Also, inthereimbursementoption,policyholderswouldberequiredtopayforthetreatmentfirstandseekclaimlater.Thismayputunduestrainontheirfinances,thus,affectingthequalityoftreatment.Also,optingforthecashlessroutesavesthepolicyholdersthetroubleofcollectingandcollatingthemedicalbillsanddocumentsforsubmissiontotheinsurancecompanybeforemakingtheclaim.

Insurer’s Track Record:Neveroptforaninsurancecompanythathasjustenteredintobusiness.Experiencematters,especially,acompanythatenjoysthereputationofasoundfinancialstrengthandhasagoodbusinesstrackrecord.Apartfromtheclaimsettlementratioofeachinsurancecompany,studyitssolvencyratioasthelatterhighlightsthecompany’sabilitytopayouttheclaims.Findout ifthecompanyhasearnedenoughinpremiumamountsduringthepastfinancialyear.Highpremiumgrowth registeredby the insurancecompaniesdepicts thegrowing faithof thepeople in this company.Expertisecomeswithexperience,whichmeansthatlongerthecompanyhasbeenintotheinsurancebusiness,greaterisitscredibility.Thisapart,anyinsurancecompanywithawiderrangeofinsuranceproductscateringtoeverysectionofthesocietyisalwayspreferable.

AllYouNeedToKnowAboutHealthInsurance 22


3.3 Online Policy RenewalTheinternethasinfluencedeveryaspectofourliving.Thisistrueofinsurancepoliciesthatcanberenewedonline,thereby,savingpolicyholdersthehassleofhavingtosubmitphysicaldocumentsandqueuingoutside insurancecompaniestosubmittheirrenewalproposals.Policyholdershavetosimply logon to their choice of insurance companies or register their details on insurance aggregator sites,typeouttheirpolicynumber,readthroughthebenefits,termsandconditionsbytheirinsurers and apply for renewal accordingly.

Irrespective of the kind of policy including life or general insurance policies,applicationforonlineinsurancerenewalandsubsequentpaymenttowardsthesameisnowpossible.

3.4 Health Insurance PortabilityBefore understanding the concept of health insurance portability, it is important to realisewhat the conceptof “Portability”means inthe context of health insurance and its significance to policyholders in the long run.


Everyhealthinsuranceplanthatyoubuyfromanyinsurancecompanymustinvolvealevelofsatisfactionregardingthebenefitspromisedbytheinsurerinadditiontothetermsandconditionslaiddownbyit.Intheeventofdissatisfaction,theinsuredlooksforwaystobuyasimilarpolicyfromanotherinsurancecompanythatpromisesgreaterbenefitsinlieuoflowpremiumcharges.

Portability isactuallytherightallowedbythecurrent insurancecompanytotheirpolicyholderstomovetoanother insurancecompanywhileretainingtheexistingcreditandbenefitsregardingpre-existingdisorders,waitingperiodandotherexclusionsthataretime-boundpursuanttotheoriginalpolicybought.Thebenefitofportabilitycanbeavailedbyhealthinsurancepolicyholdersirrespectiveofwhethertheyhadboughtanindividualhealthinsuranceplanorpaidforafamilycoverhealthpolicy.

Also,thepolicyholderscanchoosetomovefromoneinsurancecompanytotheotherorfromoneplantoanotherplansoldbythesameinsurer.However,policyholderscanseektheadvantageofhealthinsuranceportabilitysubjecttotheconditionthattheyhadtowardspremiumsofthepreviouspolicyregularlyandhadmaintainedthepolicysansanybreak.

Theconceptof“HealthInsurancePortability”wasfirst introducedbytheIRDAI in2011,thus,allowingpolicyholderstoswitchfromoneinsurertotheotherwhileretainingbenefitsincludingno-claimbonus(NCB)andfreemedicalcheckupspromisedbytheprevioushealthinsurancepolicy.

Caveat:“NothingGoodinLifeComesforFree”,whichmeansthatthepolicyholderscanavailthebenefitsofhealthinsuranceportabilitysubjecttocertainconditions.Tosecuretheinterestsoftheinsurancecompanies,theIRDAIallowsthemtherighttorejectanyport-inrequests.Also,alltherequestsmadebycustomersforportabilitywouldbetreatedasnew.Thismeansthatthehealthdetailsandpastinsuranceclaimdetailswouldbescrutinisedbytheunderwriterofthenewinsurer.Onlyafteradetailedevaluationoftheriskexposure,thenewinsurancecompanywoulddeterminethepremiumchargesthatwouldbeapplicabletothehealthinsurancecoversoughtbytheircustomers.Thehealthinsuranceproposalmayberejectedoracceptedposttheriskassessmentbythenewinsurer.Intheeventofrejection,thepolicyholderwouldberequiredtocontinuewiththeexistinginsuranceserviceprovider.


ImportantConsiderationsRegardingHealthInsurancePortability Manypeopledonotrealisethatagematterswhenitcomestoinsurance.Thisisbecausetheriskassociatedwithhealthconditionsgoupwithincreasingage.Asaresult,mostinsurancecompaniesarereluctanttoapprovehealthinsuranceportabilityapplicationsproposedbyseniorcitizens.Someinsurersmayacceptsubjecttopaymentofhighpremiumchargesinadditiontoaco-payment clause.

Highpremiumchargesisoneofthereasonsthatmostpolicyholdersapplyforportabilityoftheirhealthinsuranceportability.Yournewinsurermayagreetochargeyouless.However,thereisapossibilitythatthecoverageamountisreduced.Whilethismayseembeneficialinitially,youmayhavetospendmoreforyourtreatmentinthelongrunowingtothelowamountofinsurancecoverthatyouhadoptedfor.Thismeansthatlookingatpremiumratesisnotenough.Itisimportanttocheckthepremiumvis-a-vishealthinsurancecoverage.

Every insuranceapplication including thenewoneoptedposthealth insuranceportability isbasedon the “PrincipleofGoodFaith”.Thismeansthatfillinginwronginformation,incorrectdetailsaboutexistinghealthdisordersorinabilitytosubmitthepreviouspolicydocumentsmandatedduringportabilitymayresultinrejectionoftheportabilityapplication.

Increasingageandhealthdisordershaveadeterminingeffectontheportabilityrequestsmade.Thenewinsurancecompanymayseekdetailsofyourpre-existingdisordersortheclaimsthatyouhadmadeonyourpreviouspolicyinthepast.Someinsurersalsoasktheirprospectivecustomers,agedabove45years,toundergosomenecessarymedicaltests.Theinsurancecompanieshavetotherighttorejecttheportabilityapplicationifthepolicyholderisdiagnosedwithmedicalproblemsincludinghighbloodpressure,diabetes,etc.

Understandtheimportantwaitingperiodclauseduringhealthinsuranceportability.Anyandeverykindofhealthinsuranceagreementcontainsthewaitingperiodclausethatfallsintothreecategories.Freshpoliciescomewithawaitingperiodof30days.Forminordisorders likekidney stonesorappendicitis, thewaitingperioddoesnotexceed twoyears.However,policyholdersafflictedwithpre-existingdisorders likecardiovasculardisorders, cancerorType2diabetescanseekaclaim for treatmentofthediseasesonlyaftercompletionofthewaitingperiodequaltofouryears.Apolicyholderwhoappliesforportabilitytoanewinsureraftercontinuingtopayfortheirinsurancewiththeexistinginsurerforthreeyearsdonothavetoagaingothroughthewaitingperiodof30daysandtwoyearsrespectively.However,thefour-yearwaitingperiodclausewillcontinuetobeapplicableandtheinsuredwillhavetowaitforanotheroneyearbeforefilingclaimsforpre-existingillnesses.


3.5 Benefits of Health Insurance PortabilityIt isevidentthat ifyouaredissatisfiedwiththeservicesofthecurrent insurer, you will seek a change to another insurancecompanythatoffersyouthekindsofbenefitsyouarelookingfor.Dissatisfactionwithyourcurrenthealth insuranceplanmaybedue to myriad reasons. To ensure that policyholders feel secure underthecovertheywishtoavail,theIRDAIhadintroducedtheconceptof“HealthInsurancePortability”similaronthelinesof“MobileNumberPortability”.Thepolicyholdershavetosubmittheportabilityproposalform45dayspriortothedateofexistingpolicy renewal. The insurer would assess the proposal details and the risk factor associated with the policyholder post which it willacceptorrejecttheproposalwithin15daysofreceivingtheapplicationforportability.

Policyholderswhohavepaidthepremiumstowardstheirexistingpolicies without any break will continue to avail the benefitsand credits earned during the earlier policy despite switching toanotherinsureraspertheguidelinespublishedbytheIRDAIregardinghealthinsuranceportability. 4


DIFFERENT TYPES OF HEALTH INSURANCE4.1 Individual Health Insurance

Nothing in life matters more than good health. Simply said, good health is thebasis of all our future endeavours and lays down the groundwork for all themajoraccomplishmentswemake.However,lifestylehabits,thepervasivenessofpollution,stressduringworkand ignorance regardingcertainaspectsofhealthplanninghaveresulted in many people suffering from unforeseen health disorders. As medical costs increased owing to the impact of inflation and other factors, buying an adequatehealthinsurancepolicybecameimportant.


Key Featuresof Buying IndividualHealth InsuranceManypeoplearenowbuyingindividualhealthinsuranceplanstoensurethattheyareabletoavailthenecessarytreatmentattheirchoiceofhospital,ifandwhenrequired.Theessentialfeaturesofanyindividualhealthinsurancepolicyinclude:

Thiskindofhealthinsuranceaffordscovertoasingleindividualonly.Thismeansthatonlytheinsuredindividualcoveredunderthepolicygetsallthebenefitsofthesumassuredandotheraddedadvantagespursuanttothepolicyinlieuofnominalpremiums;

Theinsurancecompanycoversallthecostsofhospitalisationandsubsequentmedicaltreatmentsubjecttotheconditionthatthemedicalbillsdonotexceedthesumassured;

Thereisscopeforlifetimerenewabilityinmostindividualhealthinsurancepolicies.Thismeansthatthepolicyholdercanstartearlyandcontinuetobecoveredunderthesamepolicytilltheenddependingonchoiceandrequirements;

TaxbenefitsaspremiumspaidtowardsindividualhealthinsuranceplansareeligiblefortaxdeductionunderSection80Cofthe Income Tax Act;

Preandpost-hospitalisationcostsarealsocoveredunderindividualhealthinsuranceplans;

Dependingonthekindofinsurancecompanyonehasoptedforandtheageatwhichonebuystheplan,policyholdersmayhavetoagreetotheco-paymentclause.Agreeingtotheco-paymentclauseprovesbeneficialaspolicyholdersareguardedagainstagreeingtounnecessarytreatmentproposals,thereby,refrainingfromthetendencytoraiseexorbitantmedicalbills;

CriticalIllnessCoverisalsoavailable.


BenefitsofBuyingIndividualHealthInsurance Policies

Many people prefer to buy health insurance that ensuresan umbrella cover over the entire family; there are otherswhoprefertobuyahealthpolicyonly forthemselves.Thisisbecausepayingforanindividualhealthinsuranceplanhasitsownsetofbenefits.Thesemayinclude:

n Theindividualaloneenjoysallthebenefitsthatthe plan has to offer;n Thiskindofplanisbestsuitedforcustomersrunning high risks of health disorders;n Individualswhosefamilymembersarealready insuredcanbuythisplan;n Greater protection than that offered under family floater health insurance;n Dependentscanbelateraddedtotheplan,ifand whenrequired;n Cashlessclaimsettlementcanbeavailedwhilebuying this plan;n No age restriction during policy renewal.

ExclusionsUnderIndividualHealthInsuranceThough individual health insurance policies are morepreferredthanthefamilyhealthcoverplans,therearesomeexceptions to the policy that one must not ignore. These include:

-Mostindividualhealthinsurancepoliciescoverpre-existingdisorderssubjecttoawaitingperiodrangingfromtwotofouryears.Thiscanbeacauseofdiscomfortforthosenotwillingtowaitsolongbeforeavailingthebenefitsofthepolicy;

- Expenses on prescription glasses, lens and hearing aidscannotbecoveredunderthispolicy;

-Policyholderscannotclaimcoverforexpensesmetondentaltreatment or procedures;

- Naturopathy treatment is treated as an exclusion in most individualhealthinsurancepolicies;

- Customers prone to diseases including cataract, hernia,sinusitis, etc. must beware as they cannot claim cover forthe treatment of these disorders during the first year of the policy.


ExampleOfHowIndividualHealthInsuranceVsFamilyFloaterHealthCover

UditDesai,aged34,hadboughtanindividualhealthplanforRs2lakhs.HesuddenlymeetswithanaccidentandthehospitalbillsamounttoRs1,75,000.SinceUditiscoveredundertheplan,heoptsforthecashlesssettlementclaimbenefit.Theinsurancecompany,inthiscase,isliabletopaythehospitalbillamountingtoRs1,75,000.

NamanSingh, aged34,hadboughta family cover forRs2,50,000.Apart fromNaman, thisplan covershiswife, childrenandagedparents.Namanmeetswithanaccidentandhadtobehospitalised.Thehospitalexpensesaddtoa totalofRs180,000.Unfortunately,Naman’sfamilyhadalreadymadeaclaimonthepolicyduringthesameyeartopayforasurgeryamountingtoRs190,000.Thismeanswhilepayingforhismedicaltreatment,NamanhastopayRs120,000fromhisownpocketashecouldmakeaclaimonlytheremainingRs60,000fromthefamilyhealthcoverthathehadbought.

4.2 Family Floater InsuranceThe rising costs of hospitalisation, surgery and other treatment processes can cost a huge amount ofmoney. The impact oftreatmentexpensesisfeltmostbythosepeoplewhoaretheonlyearningmembersintheirfamily.Thisiswherebuyingfamilyfloaterbecomesimperativeandprovestobebeneficialinthelongrun.

Familyfloaterinsurance,alsocalledthefamilyhealthinsuranceplan,isakindofhealthinsurancethatcoversallthemembersofthefamilyagainstanyexpenditureontreatmentofunforeseenillnesses,disordersoremergencysituation.Itisthemostreliablemethodtocoveryourfamilybypayingnominalpremiumratesdependingontheageofthoseinsured.


Key Features of Buying Family Floater InsuranceWhyshould youbuya familyhealth insuranceplan?Underwhatcircumstanceswouldafamilyfloaterprovebeneficial.Akeen look at the following features will help understand how family health insurance can keep you and your loved onessecureintoday’stimes.Someoftheimportantfeaturesare:

The entire family including spouse, children anddependent parents can be covered under the same healthinsurance policy. Some insurance companies will also allow youtocoveryourparents-in-law;

Many insurance companiesoffer rebatesonpremiumrates when customers opt for a higher sum assured;

Customers can avail the benefit of No Claim Bonus(NCB). Thismeans that if the customers do not claim for aparticular year, they can avail the benefits of an increasedsumassuredinthesubsequentyear;

Customers can avail the benefit of cashless claimsettlement at a choice of their hospital;

Therearevaryingpolicytermscustomerscanoptfrom.Customers can opt for policy terms ranging from one to three years depending on their needs.

Benefits of Buying Family FloaterInsurance PoliciesEveryone prefers to keep their loved ones protected. Thisexplainstheincreasingpreferenceofcustomerstobuyfamilyfloaterinsurancepolicies.Letuswalkthroughcertainbenefitsof family health insurance policies before proceeding to payforone.Theseinclude:

First,ithelpstosavemoney.Insteadofbuyingindividualhealth insurance for each member for your family, you canalwayschoosetobuyafamilyhealthcoverwithahighersumassured in lieu of nominal premiums. Buying a single family floaterisindeedacheaperoptionthanpayingforanindividualhealthplanforeachmember;

Youcanavail taxbenefitsonpremiums towards familyfloater insurance plans. The premiums paid towards insurance areeligiblefordeductionunderSection80CoftheIncomeTaxAct;

Restoration benefit is available in many family floaterplans. This means that the insurance company will restore you with the full coverage amount if your claim gets exhaustedduring any policy term;

You can choose to add a new familymember easily inthe family floater plan.


Exclusions Under FamilyHealth Insurance plan While the benefits are known, there are certainexclusionstofamilyfloaterpoliciesthatonemustbeawareof.Theseinclude:

n Claimsraisedwithin30daysofbuyingthepolicy unlesstheclaimarisesbecauseofanaccident;n Claims raised against treatment of sexually transmitteddisease(s);n Claimsraisedagainsttreatmentoffertilityproblems;n Expenses incurred during routine medical checkups;n Expenditure on gender reassignment surgery;n Expenditureonplasticsurgery,aesthetictreatment or cosmetic surgery;n Claims raised against treatment of any psychological healthproblem(s);n Claims against expenses on OPD treatment;n Expenses on treatment or surgery on foreign soil;n Expenditure on treatment stemming from addiction problems;n Claimsagainsttreatmentofinjurysustainedduring suicidal attempt;n Maternity expenses.


4.3 Critical Illness Insurance

Anil Sharma was suddenly diagnosed with a serious disease called muscular dystrophy. The doctors told him that his treatment would lastmanyyears,thus,resulting inheavymedicalexpenditure.Anilhadboughtahealth insurancepolicyofRs10 lakhs.However, the insurancecompany informedhim that itwould takecareonlyof itshospitalisationexpenses,and therefore,hehimself would have to bear the cost of treatment.With such a heavy financial burden to bear, Anil was unable to seek thenecessarytreatment,thus,resultinginpermanentdisability.

Should Anil have bought a critical illness plan in addition to paying for a health insurance policy?

Criticaldisordersaredifferentfromcommonhealthproblems.Asopposedtothelatter,theformerhaveadamagingimpactonhealthresultingindeathordisability,thus,resultinginheavyexpensesonthepatient’smedicaltreatment.Elevatinghealthcarecostsandthepervasivenessofcriticalillnessespromptedmanyinsurancecompaniestosellcriticalillnesshealthinsuranceplansthat are different from health insurance policies.

WhyIsCriticalIllnessPolicyImportant?More people are now suffering from critical disorders than before owing to shifts in lifestyle habits, rising pollution levels,stressduetoworkpressureandmanyotherreasons.Commonexamplesofcriticalillnessesincludeheartattack,massivestroke,majororgantransplantation,kidneyfailure,dialysis,paralysis,multiplesclerosis,bacterialmeningitis,viralhepatitis,musculardystrophy,etc.Thisexplainswhypeoplemustconsiderbuyingacritical illnessinsuranceplanthatsecuresthemagainstheavymedical costs in the long run. Critical illness insurance is useful for people

- Who do not have enough savings to pay towards the treatment of serious health problems;- Who is not covered under any group health insurance scheme or do not receive employees benefit packages to look after them in the event of sudden illness.


Apart from the fact that critical illnesses policies defray the treatment costs of serious health problems, some of them alsoincludebenefitsoffreehealthcheckups.Thosebuyinghealthinsurancepoliciescaneitheroptforcashlessbenefitsorchoosetogetthehospitalisationexpensesreimbursedbysubmittingthehospitalbills.Policyholderspayingtowardscriticalillnessplansdonothavetobenecessarilyhospitalisedtoseekthecoveragebenefits.Itisenoughthatthepatienthasbeendiagnosedwithaparticularcriticaldisorderlistedintheplantoseekthecriticalillnessbenefitsinalumpsum.

Inaddition,alltheseplansoffertaxbenefitsasthepremiumspaidtowardsthesepoliciesaresubjecttodeductionfromunderSection 80C of the Income Tax Act 1961.

Insurance companiesmay coverdifferent kindsof critical illnesses in the critical illness insuranceplans that they sell. Beforebuyingacritical illnessplan, it is important togo throughthepolicydetailscarefullyandreadaboutall the illnesses thatarecoveredunderthepolicy.

ImportantConsiderationsWhileBuyingCriticalIllnessInsuranceEverycritical illnessplanhas itsownsetof featuresandbenefits,whichmeansthatnotallplanswouldcatertoyourspecificneedsinfuture.Apartfromreadingthelistofcriticalillnessesincludedinthepolicy,therearecertainnecessaryfactorsthatmustbeconsideredbeforepayingforyourchoiceoftheplan.Theseinclude:

= Theextentofthesurvivalperiod;= Waiting period clause;= Numberandkindsofillnessescovered;= Inbuiltcoveragebenefits;= Clause against pre-existing disorders;= Amount of Sum Assured;= Claim Settlement Ratio of the insurance companies.


TopCriticalIllnessPlansSoldByInsurance CompaniesNotallinsurancecompaniessellcriticalillnessplans.Also,each critical illness insurance policy differs from the other infeature,benefitsandpremiumprices.Someofthebestcriticalillnessplansinclude:

= Bharti AXA Smart Health Critical illness Policy;= Religare Care Insurance Policy;= Apollo Optima Vital Health Insurance Policy;= Max Bupa CRITICARE Policy;= HDFC ERGO Critical Illness Policy.

CriticalPolicyExclusionsThoughhavingacriticalillnesspolicyhelps,therearecertaindisordersthatnocriticalillnessinsuranceplancovers.Alsocalledpolicyexclusions,theseare:

= Any critical illness detected within the first three monthsofbuyingthepolicy;= Ifthepatientdieswithinamonthofbeingdiagnosedwith the critical illness;= Any disorder stemming from addiction problemsincludingdependenceoncigarettes,alcoholordrugs;= Anydiseaseresultingfromcongenitalproblems;

= Problemsstemmingfromcomplicationsduringchildbirth or caesarian infections;= Sexually transmitted diseases including HIV or AIDS;= Warorterroristactivities;= Cosmetic surgery;= Treatmentofinfertilityproblems;= Gender reassignment surgery;= Treatment carried out in any foreign country.

4.4 Maternity InsuranceMost Indians are unaware of the concept of Maternity Insurance. Not because it is a novel concept, but because people in thecountrydeem insuranceas a cover that securesagainstdeath,disabilityanddisease.Maternityinsuranceisjustlikeanyotherinsuranceproductandcoverstheexpensesonchildbirthuptoacertainlimit.Customersinterestedtobuyitcaneitherpayforitasastandalonepolicyorchoosethesameasanadd-oncovertotheexistinghealth insuranceplanbyagreeingtopayanaddedpremium amount.


To understand how Maternity Insurance works, let us look at the following example:

Vivek Singhal and his wife Ishita had been married for the past two years. They are now planning for a family and are looking at possible expenses that would have to be met during delivery and childbirth.

Vivek’s father Subodh recently shared the good news of becoming a father and how his wife had to undergo a caesarian to deliver the baby. The total hospital expenses had amounted to Rs 1,60,000. Vivek was concerned about the high maternity costs and subsequent medical care. It is then that Subodh informed Vivek about maternity insurance plans and how they serve to downplay the impact of inflation on medical costs. Subodh informed about how and he and his wife had made plans for the child’s delivery by choosing a maternity plan beforehand that also includes health insurance benefits for infants too.

Vivek and his wife, however, continued to be unsure about the concept of maternity insurance and decided to look for details on the web.

How Maternity Insurance Works?Medical expenses are increasing each year. This includes consultation fees, hospitalisation expenses, costs ofmedicines andexpensesonvarioussurgeries.Complicatedsurgeriescostmorethanothers.Thisholdstrueforhospitalisationexpensesduringchildbirth,especially,iftherearecomplicationsinvolvedduringchilddeliveries.MosthospitalschargebetweenRs50,000toRs2,00,000dependingon the facilities and thenatureof treatmentduring the childbirthprocess.Buyingamaternity insuranceplaninadvancehelpspayforthechildbirthexpensesinadditiontotheamountexpendedonthebaby’shealthcaresubjecttotheconditionthathospitalchargesdonotexceedthesumassuredamount.Thishelpsalleviatethefinancialburdenthatmanyfamiliesfacewhilemakingpaymentstowardsthehospitalbills.


WhatDoesMaternityInsuranceCover?MostmaternityplanssoldbyinsurancecompaniesinIndiacover:

= One month’s pre-hospitalisation expenses and two months’ post- hospitalisation costs;= Deliveryexpensesirrespectiveofnormalchildbirthordelivery through C-section;= Expensesonhospitalisationincludingdoctors’fees,nursing expenses,roomrent,surgerycostsandanaesthetist’sfees;= Charges of daycare treatment;= Vaccinationchargesofthenewborninfant;= Ambulancechargesforcarryingthemothertothehospitalfor delivery;= Cashless facility in network hospitals.

WhenShouldYouOptForMaternityInsurance?No insurance company will grant you maternity cover once you arepregnant. Ideally, thebest time to seekmaternitycover isbeforeyouconceive.Whilebuyinganymaternity insurancepolicy, it is importantthat you read thepolicydetails carefully, especially, those that relateto the waiting period before pregnancy. Many insurance companiesmandateawaitingperiodofthreetofouryearsbeforetheinsuredcanclaimthebenefitsofthepolicy.

It is rightly said that the principle underlying the maternity insurance concept is proper family planning as opposed to sudden and unexpected pregnancies.


MaternityInsuranceDoesNotCover...Thoughmaternityplanscoverpre-hospitalisationexpenses,itdoesnotpayfortreatmentofdisordersexistingpriortothepregnancyoftheinsured.Treatmentofinfantsbornwithcongenitaldefectsisnotcoveredunderanymaternityplan.Anyexpensesmadeonmedicinesorproceduresoutsidethepurviewoftreatmentwillnotbeconsideredavalidclaim.Routinevisitstothedoctorforcheckupsandconsultationfeesaftertwomonthsofthechild’sdeliverywillnotbeconsideredasapartofthematernityinsuranceclaim.

WhichMaternityPlansCanYouChooseFrom?Ifyouarelookingtobuymaternityinsurance,youmaychoosefromthefollowingplans.

• ReligareHealthInsuranceMaternityPlan–JOY;• StarWeddingGiftInsurance;• iHealthplan;• EasyHealthPlan;• HeartbeatPlan.

4.5 Senior Citizen InsuranceInsuranceisboughttosecureagainsttheriskofdeath,disabilityanddisease.Whileoldageissynonymouswithmemoriesandlifelongexperiences,increasingvulnerabilitytodiseasescannotberuledout.Thisexplainstheneedforhavingaseniorcitizenhealthinsurancepolicythatensuresfinancialsecuritytoallthoseaged60yearsandabove.

Followingarethenamesoftheseniorcitizenhealthinsuranceplanscorrespondingtotheinsurancecompaniesthatsellthem.


S. No. Senior Citizen Health Insurance Plans Insurance Companies

1 SeniorCitizenRedCarpet StarHealth2 VaristhaMediclaim NationalInsurance3 HOPE–HealthofPrivilegedElder OrientalInsurance4 SilverHealth BajajAllianz5 SeniorCitizenMediclaimPolicy NewIndiaAssurance Co.Ltd.

Some may argue about how ensuring enough savings can defer theneed forbuyinga SeniorCitizenHealth InsurancePlan.However, theessentialfeaturesandbenefitsoftheseplanshelptounderstandwhybuyingthemcanbebeneficialinthelongrun.Someoftheminclude:

= Thebenefitofagreateramountofsuminsured;= Premiumspaidtowardstheseplansareeligiblefortax deduction under Section 80C of the Income Tax Act 1961;= Daycarecostsontheuseofspecialequipmentduringtreatment ofcriticalillnesseslikekidneydisordersorcancerarecovered;= Expensesonyearlyhealthcheckupscovered;= Cashless treatment facility in hospital network;= Policyrenewabilityoptionavailable;= Ambulanceexpensestocarrytheinsuredalsocoveredunder the policy;= Treatmentofpre-existingdisorderssubjecttothetermsand conditionsofthepolicyarealsocovered;= Claimsettlementisquickandseamless,unlikemostotherplans.

SeniorCitizenHealthInsurancePolicy Exclusions= Policyholders cannot seek a claim for diseases diagnosedwithinamonthofbuyingthepolicy;= Any kind of treatment that is non-allopathic in nature;= Injuriessustainedduringasuicidalattempt;= Pre-existingdisordersbeforebuyingthepolicy.However,theseexclusionsaresubjecttothe termsandconditionsofthepolicybought;= Claimsonthetreatmentofaddictionproblems;= Treatment of sexually transmitted diseases;= Treatmentofold-ageproblemslikejoint replacementcanbeavailedaftertwoyearsof buyingthepolicy;= Amount spent on dental treatment;= Cosmetic surgery procedures;= Treatmentofinjuriessustainedduringwaror terrorist attacks.

Note that lifestyle habits are major determinants ofpremium rates,whichmeans that policyholderswhodo not smoke cigarettes or drink alcohol would becharged lower than those who drink or smoke. Since these plans are best suited for retired individuals oraged customers, they can be bought by either thesenior citizens themselves or young people for theiraged parents.


IMPORTANT ASPECTS OF HEALTH INSURANCE5.1 Policy Inclusions

Notall insurancepoliciespromiseyoueverything.Knowingwhichpolicyallowsyoucertainbenefits isequally importantasunderstandingtheexclusionsofeachpolicy.Forexample,policyholderscanseekclaimson30dayspre-hospitalisationand60dayspost-hospitalisation while treatment of sexually transmitted diseases does not fall underthepurviewofanyhealthinsuranceplan.

Otherpolicyinclusionsareprolongedcoverageforaslongastwoyearsfromthedateof policy inception, wide coverage, claims on expenses towards in-hospitalisationtreatment,theamountspentondaycareprocedures,costsofdomiciliarytreatment,restorationbenefitsandaseparatecoverforcriticalillnessesinlieuofaddedpremiumpaymentsonhealthadd-oncovers.


5.2 Policy ExclusionsDespite the growing importance of health insurance in today’s times,customersprefertocompareonlythepremiumratesandtheir coverage amount promised by each insurance company.While it is an understood fact that one buys health insurancetopayformedicalcostsinthelongrunand,thus,easepossiblefinancialburdenstemmingfromelevatedhealthcarecosts,thereare certain claims that no insurance company would entertain. Such claims made on various treatments for various reasonsareexcludedfromthepurviewofmosthealth insuranceplans,thoughthesameissubjecttothetermsandconditionsofeachinsurance company.

Common policy exclusions are:

= Waiting period exclusions: Waiting period is particular to eachinsurancecompany.However,oneexclusionconcerningthewaitingperiodcommontoeveryinsureristhatnocompanypaystowards claims made on treatment expenses carried out within the first 30 days of policy inception.

= Pre-existing disorder treatment: The waiting period for pre-existingdisordersrangesfrom30daystofouryears.However,there are certain diseases included in the list of pre-existing disorders of each insurer. The claims raised on the treatment of thesearecoveredonlyafterthreeyearsofpayingthefirstpolicypremium.

= Sexually transmitted diseases treatment: Any expenses incurredonthetreatmentofdiseaseslikeHIVorAIDScannotbe

claimedunderanyhealthpolicyschemesoldbyanyinsurancecompany.

= Injuries sustained during war or terrorism: Injuriesordisordersresultingfromanykindofwarorterroristactivitieswill not be covered under any health plan, thus, implyingthat policyholders are required to pay for such treatmentsthemselves.

= Treatment of addiction problems: Treatment of drug-induceddiseasesor any illnesses causedbydependenceoncigarettes,alcoholoranykindofnarcoticsubstancearenotcoveredunderanyhealthinsurancepolicy.Thisisanexclusioncommon to all health insurance plans sold in India.

= Dental care treatment expenses: The treatment of dentalcareisnotcoveredunderanyhealthplan.

= Cosmetic surgeries: Healthplansarebought to tacklesudden emergencies and not for defraying costs on surgeries carriedouttoenhancebeauty.Whiletherearemanyhealthplansthatcoverexpensesonplasticsurgeries,noneofthemcoversthecostsofcosmeticsurgeries.

= Investigative treatment: Some people tend to participateinmedicalsurveysorgivethemselvesupformedicalexperiments carried out by various research centres andpharmaceuticalcompanies.Sudden investigativeproceduresmay result in the policyholders afflicted with disorders of the bodyormind.Treatmentofsuchdiseasesisnotcoveredunderanyhealthinsuranceplansoldbyanyinsurerinthecountry.


5.3 What factors impact Health Insurance Premium?Nihar Pandya logged on to the sites of various insurance companies andinsurancewebaggregatorportalstofindoutthedetailsofvarioushealthplansand their corresponding premium rates. Nihar is currently looking for a health planthatchargesnominalpremiumsinlieuofahandsomecoverageamount.He finds that all the insurance companies charge premiums differently.

Nihar seeks to find answers to the following questions:

1. Are premiums charged randomly by insurance companies?2. What are the factors affecting health insurance premium rates?

Most people, likeNihar, compare the premium rates of every health insurance plan before choosing the one that suits theirbudget.However,notmanyareawareoffactorsthatinsurancecompaniestakeintoconsiderationwhiledeterminingthepremiumamountstheywouldchargefromtheircustomers.Whiletheremaybemultiplereasonsparticulartoeachinsurancecompany,thecommonfactorsaffectinghealthinsurancepremiumsinclude:


= Pre-existing disorders: Before agreeing to health insurance proposals, many companies require their customers to go throughsome mandatory medical tests. These health records help companies determine if their customers are already suffering from pre-existing disorders and the propensity to seek treatment within the waiting period.Dependingontheseriousnessofthediseaseandthequantumofriskassociatedwiththeirhealthconditions,insurersmaydecidetorejecttheproposalorcoverthecustomeratincreasedpremiumrates.

= Medical history: Customers with a history of ailments running in their families will be charged higher than those hailing from ahealthy background. This is because such people are more likely toseektreatmentfortheirgeneticdisorders,thus,posingahighriskoffinancialburdenforinsurancecompaniesinvolvedinclaimsettlement.

= Body Mass Index (BMI): When was the last time you had exercised?While thismay seem like a rhetoric question, the answerto it determines your premium payment throughout the policy period. This is because insurance companies charge more premiums fromcustomerswithahighBMIasthelatteraremorevulnerabletoserioushealth problems like heart diseases, joint problems, diabetes andothers.Also,femalepolicyholderswithahigherBMIaremorelikelytoseek claims on expenses incurred on treatments including pregnancy too.

= Addictive habits: Dependence on cigarettes, alcohol or snuffcan result in serious health disorders. Insurance companies realise that addicts are more likely to be hospitalised and seek treatment.This explains why insurance companies charge more premiums from customerswhosmoke,drinkorconsumetobaccoinsomeformortheother.


= Age:Ageisnotjustanumber,especially,forinsurancecompaniesthat charge premiums from their customers accordingly. Young people arerequiredtopaymuchlowerpremiumsthantheiragedcounterparts.Thisisbecauseyoungpeoplearelesslikelytosufferfromhealthproblemsorseektreatmentforcritical illnesses, thus,reducingthequantumofriskfacedbyinsurancecompanies.

= Marital status:InsurancecompaniesinIndia,tilldate,havebeenunabletosubmitanywell-validatedreasonforcharginglowpremiumsfrommarriedpeople.ThisimpliesthatbeingmarriedgivesIndianmenthebenefitofpayinglessthantheirunmarriedpeers.

= Residential status: Insurance companies are interested to know wheretheircustomersstayorlive.Thisisbecausetheirresidentiallocalityor region has a determining effect on the health of the policyholders that, in turn, affects premium charges. The place of residence has adirectbearingonthequalityoffoodandwaterconsumption.Climaticconditionsandculturalaversiontoexerciseareotherfactorsthatdecidethequalityofhealthofthepolicyholders.Thisexplainswhyinsurancecompanies are keen to know about the placewhere their customerscomefrombeforedecidingthepremiumrates.

= First-time policyholders:Insurancecompaniesseekdetailsabouttheir existing insurance status and the policies their customers havebought till date. Insurance companies charge higher premiums frompeoplewhoarebuyinghealthinsuranceforthefirsttimeintheirlives.Thisisbecausesuchpeopleareatagreaterlikelihoodtobehospitalisedand get the necessary treatment and claim, from the insurancecompanies,theexpensesincurredontheirmedicaltreatment.


5.4 Cashless Hospitalization

PrateekAgarwal’ssonneededemergencytreatmentandhadtobehospitalisedsuddenly.SincePrateekdidnothaveenoughcashwithhim,hewenttothenearestATMtowithdrawcash.Theexpensesonhisson’shospitalisationandsubsequenttreatmentweremorethanhehadexpected.Leftwithnootheroption,Prateekwenttohisfriendseekingfinancialhelp.

IfPrateekhadboughtahealthinsuranceplanthatincludedacashlessbenefitplan,hewouldhavebeeninabetterpositiontofacethismedicalemergency.However,unawareofcashlessmediclaimpolicies,manypeoplelikePrateekfallinadebttrapwhilepaying for necessary medical expenses.

Cashlesshospitalisationisjustoneofthebenefitsthathealthinsurancepolicyholdersenjoy.Thisfeaturehelpspolicyholderstoseek necessary medical attention and emergency treatment at their choice of hospital. The insurance companies issue a health insurancecardtotheircustomersthattheyhavetoshowtotheinsurancedeskatthehospitalduringadmission.Theinsurancecompany then settles the claimmade by the hospital subject to the condition that the amount raised does not exceed theinsurancecoverageamount.

InIndia,therearetwotypesofcashlesshealthinsuranceclaimsavailablethatpolicyholdersmaychoosefrom.Theseinclude:

= CashlessFamilyHealthInsurance;= CashlessHealthInsuranceforSeniorCitizen.

Policyholderscanavailthebenefitsofcashlesshospitalisationunbiasedofwhethertheyareoptingforplannedtreatmentorhaveto hospitalised to meet medical emergencies.


CashlessHospitalisationExclusionsWhilecashlessmediclaimplanshelptodefraytherisingmedicalcostsofhospitalisationandsubsequenttreatment,notallkindsofexpensesarecoveredunderthiskindoftreatment.Cashlessmediclaimplanbenefitsexcludeexpenseslike:

- Expenditure on attendants hired;- Ambulance charges;- Charges on toiletries used;- Additional service charges;- Additional expenditure on the oxygen mask, diapers, nebulizers, etc.;- Documentation charges.

YourMediclaimPolicyMayBeRejected.KnowWhy...However,somepolicyholdersfindtheclaimsmadeontheirmediclaimpoliciesgettingrejectedforcertainreasons.Theseinclude:

= Claim on expenses made on hospitalisation and treatment of an illness not covered under the policy;= Claim exceeding the amount of sum assured;= Incorrect details regarding pre-existing disorders or incomplete personal details filled in the policy form;= Delay in intimating about the hospitalisation to the TPA.

5.5 Daycare TreatmentVineetChandihok’smotherwasadvisedacataractoperationbytheophthalmologist.However,thedoctoralsosuggestedthatthetreatmentwouldbeminorand,hence,Vineet’smotherwouldbedischargedafewhoursafterthesurgery.ThoughVineetdidhaveahealthinsuranceplaninplace,hewasnotsureiftheplancoveredexpensesondaycareprocedures.


Vineetdecidedtotalktotheinsurancecompanyandseeknecessaryadvice.Hewasadvisedthathisplanincludesscopeforclaimsettlementofthetreatmentcostsasthesurgeryfallsunderthecategoryofdaycareprocedures.Vineet,thoughinitiallyunawareoftheconceptofdaycareproceduresanditsinclusionsinmosthealthinsuranceplans,feelsgreatlyrelieved.

ThepervasivenessofvariousdisordersandincreasingmedicalcostshavechangedthestructureandscopeofhealthinsurancepoliciesinIndia.Today,amajorityofthehealthinsuranceplansinIndiapayfordaycareproceduresasanadditionalbenefitotherthanpromisingtheusualcashlessmediclaimandreimbursementofclaimsontreatmentexpenses.

Understanding Daycare TreatmentsSimplysaid,Daycaretreatmentsarethosetreatmentprocedurescarriedoutunderthesupervisionofalocalorgeneralanaesthetistin a hospital or day care treatment centre. These treatments do not last more than 24 hours and are included under the scope of manyhealthplanssoldinIndia.Someofthehealthinsurancepoliciesthatpayfordaycareprocedurestooare:

= Apollo Munich’s Easy Health;= Religare’s Care;= Star Health’s Family Health Optima;= Max Bupa’s Heartbeat Plan;= New India’s Family Floater Mediclaim Policy;= National Parivar Mediclaim Plus.

HowToFileDaycareClaimsInHealthInsurance?Thedaycarecoverageisanin-builtfeatureinmanyhealthinsuranceplans,thus,implyingthattheprocessoffilingdaycareclaimsis thesameasthatofseekingclaimsontreatmentexpensesunderaregularhealthcover.Sincemostdaycareproceduresaretreatmentsplanned inadvance,policyholders canavail thebenefitof cashless claimprovided that the insurer is intimated inadvanceaboutthesame.

However,someinsurersasktheircustomerstosubmitthedocumentsnecessaryformakingtheclaimsandreimbursethetreatmentexpenses accordingly.


5.6 Pre & Post HospitalizationWeall talk about health insuranceplans andhow theyhelp to tackle risingmedical expenses.However, few realise how thevarioushealthpoliciescoverpreandpost-hospitalisationexpensestoo.

Before getting admitted to your choice of hospital for treatment, there are certain medical costs incurred by the policyholder. These are classified as pre-hospitalisation expenses. These may include the amount spent on various tests that are needed to diagnose the kind of disorder the incurred is suffering from before prescribing the correct nature of treatment. Such tests may include urine tests, blood tests, MRI scans, CT scans and X-rays to diagnose the exact medical condition of the insured.

Post discharge from the hospital, the incurred has to bear certain necessary medical costs. These are categorised as post-hospitalisation expenses. These expenses may include the amount spent on tests prescribed the doctor or healthcare provider to ascertain the health status and recovery progress of the insured. These may include the costs of medicines, consultation fees and charges on diagnostic tests. However, insurance companies do not cover therapies like naturopathy, acupuncture, homoeopathy, etc.

Mostinsurancecompaniespayforthepreandpost-hospitalisationexpensessubjecttocertainconditions.Thenumberofdaysofpreandpost-hospitalisationcoverdiffersfromonehealthinsurancecompanytotheother.However,mostinsurancecompaniescover30daysofpre-hospitalisationand60daysofpost-hospitalisationexpenses.

ImportantConsiderations= Policyholderscanseekaclaimforpreandpost-hospitalisationclaimsprovidedthattheclaimforexpensestowards hospitalisationisacceptedbytheinsurancecompany;= Expensesonpre-hospitalisationmustbeforthesameconditionforthepatienthadbeenhospitalisedandavailed necessary treatment;= Costsofpreandpost-hospitalisationwillbeallowedonlyforthenumberofdaysmentionedinthepolicy.Anyexpenses incurredbeforeorbeyondthetimelimitwillnotbeconsideredbytheinsurancecompany.


To understand the concept of pre and post-hospitalisation expenses better, let us understand the same with the help of the following example ...

AjayMehrotrahadbeenhospitalisedfortreatmentofmalariaonMarch01,2019.Beforebeingadmittedtothehospital,AjayhadbeenconsultingvariousdoctorsandunderwentdiagnostictestsfromFebruary12,2019toFebruary28,2019subsequenttowhichhegothospitalisedfornecessarytreatment.AjaywastreatedforaweekafterhewasdischargedonMarch08,2019.Post discharge, Ajay had to undergo certain tests so that doctors couldmonitor his health progress and prescribemedicinesaccordingly. The post-hospitalisation tests and medicine purchases continued for nearly 35 days.

In this case,Ajayhadclaimedpre-hospitalisationexpenses for17daysandpost-hospitalisationexpenses for35days.Hewashospitalised and treated for 8 days. Assuming that the hospital is within the network of the insurer or the insurer accepts to pay claimsforexpensesraisedbythishospital,Ajaywouldbereimbursedtheentireexpensesincurredincludingthepre-hospitalisationexpenses,in-treatmentcostsandtheamountspentduringthepost-hospitalisationperiod.

5.7 Grace PeriodShekharAhluwaliahadboughtahealth insuranceplan fromKotakGeneral Insurance.However,hehadforgottentomakethepaymenttowardsthepremiumbytheduedateandfearsthattheinsurancecompanywillcancelhispolicy.WillShekharlosehishealthcoverordocompaniesallowtheircustomerstopaythepremiumspasttheduedate?

Insurancecompaniesallowtheircustomerstopayfortheirinsuranceplanevenaftertheduedatehaspassed.However,thereisatimelimitforlatepaymentofpremiumstooalsocalledthegraceperiod.“GracePeriod”istheadditionaltimethattheinsurancecompany grants to its customers who had defaulted in making timely payment of their premiums. As per the guidelines shared bytheIRDAI,everyinsurancecompanyisrequiredtoofferagraceperiodof15daysforpaymentofhealthinsurancepremiums.However,someinsurersextendthegraceperiodto30daysalso.Thegraceperiodstartsfromthedateonwhichthelastpaymentwasdue.Iftheinsurancepremiumispaidafterthegraceperiod,thentheinsurancecompanyreservestherighttorefusethepolicyrenewaleventhoughthepolicyholdermaybewillingtomakethepayment.


5.8 Claim SettlementTheultimate aimof buying any kindof insurance, includinghealth insurance policy, is timely settlement of the policy.While there may be many factors based on which youdetermine the worth of any insurance company, one mustnot ignore to look into the claim settlement ratio (CSR) ofeachcompanyoverthepastfewyearsbeforezeroingonanyparticularpolicy.TheCSRistheratioofthenumberofclaimssettledbythecompanytothenumberofclaimsraisedbyitscustomers during any particular year.

Onemustoptforaninsurancecompanyreputedforitseasy,claim settlement process. This is because the purpose ofbuyinghealthinsuranceistoensurethatthemedicalexpensesincurred on the treatment of the insured are ultimately paid offbytheinsurancecompany.Rejectionoftheclaimowingtocertain unforeseen condition or some hidden clause written in fineprintwillnotonlyresultintheinsuredhavingtopaythebillsontheirownbutalsothelossontheamounthavingpaidas premiums to the insured company till the date of making the claim.

Before opting for any insurance company to buy healthinsurance, it is important to study the company’s CSR thatreflectstheabilityofthecompanytosettletheclaimsraisedby its customers. A higher value of the CSRmeans that thenumber of claims fulfilled by the company is on the higherside, which implies that there are greater chances of yourclaimsbeingpaidbytheinsurer,ifandwhenrequired.


5.9 Free Look PeriodUnderstand the following scenario ...

SubhashSharma,aresidentofMadhyaPradesh,wasadvisedtobuyahealthinsurancepolicythatwouldsecurehimandhislovedonesagainstpossiblemedicalexpensesinthelongrun.However,Subhashrealisedthatthepolicyhehadoptedforprovidesalimitedsumassuredamountthanhemightrequireashewastheonlyearningmemberinthefamily.Apart,thepremiumswerehigherthanhehadanticipated,whichmeansthathegotlimitedbenefitsevenafterpayingahigherprice.Subhashlooksthroughtheportalsofvariousinsurancewebaggregatorsandtheinsurancecompaniestooandstumblesuponabetteroption.Hefindsanotherpolicythatnotonlypromisesagreatersumassured in lieuofnominalpremiumsbutalsoassuresadditionalbenefitsthanwhathehadoriginallyoptedfor.Subhashisdeterminedtogethispresentpolicycancelledbutisunsureabouthowhemustproceed.

Thisisnotthefirstinstanceofanewinsurancepolicyholderlookingtocancelthepolicynorwoulditbethelast.Toensurethatthenewinsurancepolicyownercangetthepolicyterminatedwithouthavingtopaythepenaltyamount,theInsuranceRegulatoryDevelopmentAuthorityofIndia(IRDAI)hasincludedaprovisionthatallowspolicyholderstosurrendertheirpoliciesandseekarefund for the same. The policyholders are allowed a free look period,limitedto15days,duringwhichtheymustgothroughthetermsandconditionspublishedinthepolicyproposalandassesstheutilityofthepolicyaccordingly.

Important details regarding the free look period include:

= Thefreelookperiodstartsfromthedayonwhichthepolicyholderreceivesthepolicydocument.Thefreelookperiod,inmostcases, is limitedto15days.Duringthisperiod,thepolicyholdermayrequestforpolicymodificationsormovetogetthepolicy altogether.

= Policyholderswhowishtoavailthefreelookperiodmustbeabletoprovethedateofreceiptofthepolicydocument.Forthis,theymustwritearequesttothepolicyholder informingthemoftheir intenttoreturnthepolicy.Tosavetime, insurancecompanieshaveapolicycancellationformontheirwebsitesthatcustomerscandownloadfromtofillinthedetails.


= Requestforafreelookoptionforthehealthinsuranceplaninvolvessubmittingnecessarydetails includingthedateofpolicyreceipt,detailsoftheagentwhohelpedthembuythepolicyandthe reason for policy cancellation. In addition, the policyholdersmust submit bankdetails including the account number and theIFSCcodetowhichtheywould likethepremiumtoberefunded.Policyholders need to affix a revenue stamp of the mentioneddenomination on the policy cancellation form before submittingthe same.

= It is important that policyholdersmust submit the originalpolicydocumentissuedtothembytheinsurancecompanyalongwith the receipt of the first premium payment they had made and a cancelled cheque drawn from the bank account to whichthe premiummoneymust be refunded. Policyholders who havemisplacedtheoriginalpolicydocumentandareunabletoreplaceitmustsubmitanindemnitybond.

= Theinsurancecompanyliabletorefundthepremiumamountwill pay back after deducting the proportion of the premiumamounttowardsthecoverageperiod,stampdutychargesandtheexpensesbornebytheinsurertowardsthemedicalexaminationofthe policyholder if any.

The procedure of policy cancellation during the policy period is the same for all insurance policies. However, policyholders who have paid for health insurance can apply for cancellation subject to the condition that they have bought the same for a minimum policy of three years.


5.10 Waiting Period

Ayub Khan, aged 34, has recently bought a health insurance policy that promises health cover to the entire family. Before buying the policy, Ayub had been diagnosed with certain ailments for which he had undergone treatment in the past. Ayub discloses details about his health disorders while submitting the insurance proposal which the company accepts. Three months after buying the policy, Ayub is suddenly hospitalised and requires treatment for his pre-existing illnesses. Can Ayub seek claim from the health insurance company? Does the insurance company have the right to reject the claim made despite Ayub having paid all the premiums regularly? How do the insurance companies cover their customers already suffering from certain diseases before applying for the policy?

Themostimportantthingtonoteisthatonecannotmakeaclaimsoonafterbuyingthepolicy.Everyinsurancecompanysellinghealthcoverhasinplaceawaitingperiodthatmayrangefrom30daystofouryearsthatdiffersfromonecompanytotheother.Waiting period is the gap or period during which a policyholder cannot claim for certain expenses made on treatment. It is the periodthatthepolicyholderhastowaitbeforeseekinghealthcoverfromtheinsurancecompany.

Thewaitingperiodclausesforindividualhealthinsuranceandafamilyfloaterinsurancepolicyaredifferent.Theseinclude:

= Initial waiting period is 30 days – 90 days: Most health insurance companies including a waiting period of one month during whichtheywouldnotenteranyclaimsbarringtreatmentofinjuriesresultingfromaccidents.Thiswaitingperiodmayextendupto90daysforsomeinsurers.Thishasbeendonetoprotecttheinterestsoftheinsurancecompaniesagainstcustomerswhobuyhealthinsuranceplansimmediatelyafterbeingdetectedwithsomeseriousdisorderandattempttoseekclaimjustafterpayingthe first premium.

= Waiting period for pre-existing diseases: Many insurance companies ask their customers to undergo certain medical tests tocheckiftheyaresufferingfromanyailment(s)includingbloodpressureproblems,diabetes,thyroiddisorders,etc.Dependingonthemedicalreports,theinsurermaydecidetoacceptorrejectapolicyproposal.Someinsurancecompaniesagreetocoverthe customers subject to the condition that thehealth cover is either limitedor excluded for anypre-existingdisease. Someinsurersagreeafterprescribingawaitingperiodthatmaybelimitedayearorextenduptofouryears.Patientscanseekaclaimfor the medical expenses incurred for the treatment of the pre-existing disorders only after the passage of the waiting period as mentioned in the policy proposal form.


However,ifthecustomerhadbeensufferingfromanydisorderbeforebuyingthepolicybuthasbeendiagnosedwiththediseaseonlyafterhavingboughtthepolicy, thenthe insurancecompany is liabletopaytheexpenseson itstreatment.Also, ingrouphealthplansofferedbycompanies to theiremployees, the insurancecompaniesdonot insiston including thewaitingperiodclause for health insurance.

= Maternity waiting period:Someinsurancecompaniesalsoextendtheirbenefitstomaternityexpensestoo.However,manyofthemnecessitateawaitingperiodextendingfromninemonthstofouryears.Thismeansthatonemustconsiderbuyinghealthinsuranceearlysothatthematernityexpensescanbeclaimedafterconceptionpastthematernitywaitingperiod.

5.11 Tax Benefits of Health InsuranceBuyinghealthinsurancecanhelpyousaveontaxesonhealthinsurancepremiumstoo.Buyingahealthinsuranceplan,ononehand,ensuresahealthcovertothe insured incaseofanymedical treatment,plannedorsudden, ifanywhileontheother itavailsyoutaxationbenefits.InvestinginhealthinsuranceasanessentialmeasureoftaxplanningnotonlyensuresthatyouandyourlovedonescanaccessnecessarymedicaltreatmentatyourchoiceofhospitalwithoutspendingtoomuchonhospitalbillsbutalsoavailincometaxexemptionunderSection80DoftheIncomeTaxAct.

Healthinsurancepoliciesareboughttooffsettherisingmedicalcostseachyear.Theexpensesofhospitalisationandsubsequenttreatmentmaybemoreinthecaseofseniorcitizenswhoaremorepronetoold-ageproblemsorrecurringdisorders.Thisexplainswhymostpeoplepreferthefamilyfloaterhealthinsurancethatcoversallinthefamilyandtakescareoftheirmedicalexpensesinlieuofnominalpremiumcharges.Thereareotherswhobuyindividualplansforthemselvesandseparateseniorcitizenhealthinsurancepoliciesdependingontheirneedsandbudget.Thecurrentnormsstate:

= Apolicyholder,beitanindividualorbelongingtoaHinduUndividedFamily(HUF),canavailadeductionnotexceedingRs25,000onpremiumspaidonbehalfofself,spouse,dependentparentsandchildrenunderSection80DoftheIncomeTaxAct.


= Policyholderswhohavebought additional health insurancepolicies for their parents agedabove60 years can claimanadditionalamountofdeductionlimitedtoRs50,000foreachparent.However,theadditionalamountofdeductioncanbeclaimedsubjecttotheconditionthattheparentscoveredunderthepolicyareseniorcitizens.ThismeansthatthemaximumamountofdeductionpolicyholderscanclaimforhealthinsuranceplansboughtforparentsisequaltoRs100,000(Rs50,000forfather+Rs50,000formother).

= Manyhealth insurance companies are reluctant to sell health insuranceplans to senior citizensowing to the increasedquantumofhealthriskthattheysufferfrom.Thisrefrainsseniorcitizenstobuyhealthinsuranceplansforthemselves.However,policyholderswhoseseniorcitizenparentsarenoteligibletosecureahealthcoverforthemselvescanclaimdeductionuptoRs50,000towardspaymentoftheirmedicalbillsduringtheyear;

It is importanttonotethatpolicyholderscanclaimtaxdeductionsonhealth insurancepremiumsprovidedthatthepremiumshavebeenpaidinanymodeotherthancash.ThismeanspolicyholderswhopaytheirhealthinsurancepremiumsincashcannotclaimtaxbenefitsallowedundertheIncomeTaxAct.

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All You Need To Know About Health Insurance