A Comprehensive Guide for Buying a Health Insurance Policy in India

Healthcare can be financially draining, be it for oneself or family that is dependent on them. With the additional margins of inflation that persist in medicine and hospitalization costs alongside the rise in various lifestyle-oriented diseases; one has to find the best health insurance policy and their ideal version of a health insurance coverage plan that can mitigate the possibilities of having to forego treatment because of high costs or pay from one’s future savings.

A health insurance policy is an insurance instrument that covers medical costs incurred in the course of a prolonged hospitalization, and costs post discharge as well. Health insurance in India is general policy that has many variations[1] offered by insurance providers according to age groups and family structure. One may choose from an individual health plan, a family plan, senior citizen coverage, with customisable riders and additional options such as covid cover and more.

Regular check-ups, maintained doctor consultations should be a recurrent activity in every person’s life. It is necessary to have clarity about one’s health, and in that pursuit a robust health insurance policy can be a good support in the event of medical expenditure that may be financially stressful for the person.

To find the best health insurance policy that completely caters and covers every foreseeable situation is one that can be replete with trial and error. Therefore, there are certain things one most know before purchasing health insurance plans.

There are mainly two types of health insurance in India:

  1. Indemnity Plans: These types of plans usually include mediclaims, individual coverage, family floater plans, senior citizen coverage and unit linked health plans. They come with the assurance of coverage of hospitalization costs and a sum assured benefit.
  2. Defined-Benefit Plan: These plans are meant for situations where the insured seeks a lump-sum benefit from the provider in the event of an accident or diagnosis of an illness. Critical illness plans, Personal accident plans, and hospitalization cash benefit plans fall under defined benefit plans.

The importance of opting for a health insurance policy is an established fact for most people, but there are certain supplementary perks of being insured. Let us look at the benefits of health insurance in India:

  1. Coverage:

A health insurance policy can offer complete end-to-end coverage against hospitalization costs, ambulance fees, including pre and post-op care. According to the necessities of the policyholder, they can avail a sum assured in the event that their income become irregular in the event that the policyholder meets with an accident.

  1. Tax Benefits:

The premiums paid for a term insurance plan and the payout sum thus received from the same at the time of maturity is exempted from taxation under Section 80C and 10(10D) of the Income Tax Act, 1961.

For health insurance in India, the premiums paid are deductible from the net taxable income earned by the policyholder as per Section 80D of the Income Tax Act, 1961.

  1. Flexibility:

The best health insurance policy can be expected to offer ample room for a policyholder to customize their plan as per their circumstances such as reduced premiums after a specified time period, or extending one’s tenure to avail insurance till retirement and after.

  1. Sum Assured:

The sum assured under a health insurance policy is capped at Rs 6 crore per annum. The sum all-round offers a financially robust and extensive cover for the policyholder.

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  1. Critical Illness:

One of the most important features of a health insurance policy is its Critical Illness benefit which provides coverage for more than 30 critical diseases such as cancer, kidney diseases, stroke and more.

  1. Claims:

For health insurance plans, one can avail claims according to their reason. For standard claims one can avail coverage till their sum assured isn’t exhausted. For situations such as disability or critical illness the policyholder can receive Cancer insurance benefits or lump-sum payment from the insurance provider. One must note that claims made under the aforementioned reasons are only one-time payouts.

  1. Add Ons:

One can add additional riders for critical illness, maternity, accident and accidental disability onto an existing health insurance policy.

Before opting for a health insurance in India, one should be aware of the following things and features to consider before buying:

  1. Claim Process:

Before investing in an insurance policy, one should independently look at the credentials of various insurance providers about their track records, claim payment promptness. From a mix, one should choose the plan and provider that has simple claim process and has good customer service.

  1. Adequate Coverage:The payments or reimbursements a policyholder may receive from insurance providers has to be adequate enough to cover high-cost treatments and even post-care for the policyholder. Hence one should go for plans that have a minimum 10 lac sum assured since medical costs have inflation margins that increase exponentially.
  2. Hospitals:At the time of zeroing in on a health insurance policy one should go for an insurance provider that has a strong list of reputed hospitals under their policy listing.
  3. Pre/ Post Hospital Expenses:Select a policy which allows one to have extensive cover over not just hospitalisations, but also tests, doctor consultations and medicines.

The process of choosing a policy can be a tedious and difficult process, but with the abundance of options and customisations available today one can streamline the process by using different metrics and online resources to make the best possible choice tailored to their needs for a financially secure future.



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